The cost-cutting at News Corp’s Australian operations continues without a break in the lead-up to its quarterly results next week.
Next Friday, we’ll find out how Rupert Murdoch’s company has performed in 2016-17. The interim and third-quarter figures did not make good reading, except for property website groups REA in Australia and Move in the US, and the HarperCollins book publishing business. We know that there is already US$537 million in impairment losses on News Corp Australia and its 50% stake in Foxtel. But judging by the increasing rate of cuts and deep cost reductions in News Corp Australia and Foxtel (plus the continuing hacking into the cost structure of The Wall Street Journal), we know there is more bad news around.
Foxtel, 50%-owned by News Corp Australia, has been cutting staff and costs. Yesterday it revealed two channels would be cut by consolidating program. From October, there will be scheduling changes to its linear channel line-up with Foxtel Arts and Foxtel Smooth channels sharing a broadcast signal and key Lifestyle YOU programming moving to Lifestyle and Arena. That means one of the two channels occupied by Smooth and Arts will be closed — the two will share the day, with Arts cut to six hours from 6pm to midnight and Smooth the remaining 18 hours. Lifestyle YOU will stop broadcasting altogether.
Foxtel Arts and the music channels, V Hits, Max, Foxtel Smooth and CMC were merged in July last year. This is a further round of consolidation and closures.
Brian Walsh, Foxtel executive director of television, said in a statement that the decision made sense “both in financial terms and audience optimisation”. “Yes, this is consolidation, however, as our television and video world continues to evolve, it is imperative we review every aspect of the business,” he said.
News Corp Australia also announced yesterday that two of its Sydney community newspaper titles would be “relaunched” under its “prestige” brand to be lifestyle-led, with more real estate and luxury content. The company used demographic research to come to the decision for the revamp, with prestige and lifestyle director Nick Smith saying the title reached the most affluent audiences in Australia:
“As part of the News Prestige Network, the Mosman Daily and North Shore Times provide fantastic cut-through for advertisers opening a new store, dealership or branch in an affluent area or can garner grassroots support for campaigns, be they retail or brand-focused.”
News Corp did not respond to Crikey‘s questions on whether the relaunch would mean fewer news pages to cover local council and community issues, but lifestyle and real estate content is cheaper to produce, easier to syndicate across titles, and more attractive to advertisers.
There have been widespread cuts to staffing levels among journalists and photographers at News Corp tabloids in the major cities, including the Gold Coast. In early May News announced that Fox Sports News would move from its current home to be produced by the recently-acquired Sky News (Australian News Channel) with more job losses.
Only a handful of photographers remain at the metropolitan newsrooms after cuts to the photography and production desks announced in April.
In June, 19 channels were cut from FoxtelPlay, and Foxtel/Seven West Media’s video streaming business, Presto, closed in January with losses for both partners of well over $100 million.
News Corp warned in its half-year and third-quarter filings with the US Securities and Exchange Commission that further impairments of US$2.4 billion were at risk in the News and Information business (US$1.9 billion) and the Cable Sports business (Fox Sports Australia, US$500 million).
Foxtel will have to write off the remaining US$22 million left on its now worthless 13.8% stake in the Ten Network.