Foxtel CEO Patrick Delany
Foxtel CEO Patrick Delany (Image: AAP/Tracey Nearmy)

How much has pay TV operator Foxtel received in one-off government handouts over the past three years? $40 million? $50 million? Or is it closer to $67 million? No one quite knows.

What we do know, after an extensive freedom of information (FOI) request reported by the ABC on Friday, is that the struggling News Corp-controlled television company gets concierge treatment from the federal government on a scale unavailable to almost any other Australian media organisation.

The report reveals that Foxtel has been given “a blank sheet for choosing how to spend a $10 million federal government grant and does not need to submit anything about it until next year”. The FOI documents “show the federal communications department gave Foxtel free rein to allocate millions of dollars of taxpayer money granted to broadcast under-represented sports”.

That’s the department headed by former Optus CEO Paul Fletcher.

“The $10 million grant is an extension of a $30 million program that has been controversial since it was announced through a single line in the 2017 budget,” the ABC reported.

And it seems Foxtel really needs every dollar it can get. The begging bowl is out. News Corp CEO Robert Thomson announced in August that the company has cut its sports rights bill by $180 million. That’s after sacking hundreds of staff and contractors in the June half year. That’s improved the finances enormously, as has the success of its new streaming service Binge and the Kayo sports service.

The News Corp September quarter financial report reveals that Binge is now generating revenues at an annual rate of more than $36 million. Binge had 321,000 subscribers in the quarter. Subscriber number for Kayo were also higher — 681,000 in total, up from 430,000.

The Foxtel Now service saw a fall to 205,000 from 267,000 and looks like it may be shut early next year. Foxtel’s household subscribers fell 200,000 over the year to 1.85 million while commercial subscriber numbers totalled 205,000 — up from well under 200,000 at June, but still down on the 267,000 a year ago as pubs and clubs slowly recover from the lockdowns.

The bottom line is that by News Corp’s non-standard accounting method “Segment EBITDA” (earnings before interest, tax depreciation and amortisation), Foxtel saw a US$3 million fall in the quarter. That $10 million from the government department could have been whisked into the profit-and-loss account without a trace and, balancing the books without anyone noticing.

Then again, Foxtel is all about haggling for money. On its website, subscribers are informed that if they’re having trouble meeting their monthly payments, Foxtel can help with “options”: “We believe that financial hardship should not exclude a customer from continuing to receive a Foxtel service if they are willing to pay their bills but require some payment flexibility in particular circumstances or periods.”

Negotiating debt is something Foxtel knows all too well.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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