Chris Mitchell admits The Australian has not been profitable since 2008

Chris MitchellThe Australian has struggled to be profitable since the global financial crisis of 2008 its editor-in-chief Chris Mitchell has conceded in a video interview, on the newspaper’s website this morning.

In the interview with newly installed Media editor Sharri Markson Mitchell took the ABC’s Media Watch host Paul Barry to task for last week declaring The Australian was losing between $40m to $50m a year, and said he plans to report the ABC to the Australian Communications and Media Authority (ACMA).

“It’s probably not a profitable business on The Australian,” said Mitchell, in response to a statement by Markson that print was still a “profitable business”. “As people have noticed we’ve had a hard time since the GFC but the idea that we are losing $50m is incorrect.”

“(It’s) completely incorrect and we’ve never gone even close to that,” he said.

Mitchell has generally insisted that News Corp Australia’s national broadsheet was profitable. As recently as 2012 he said The Australian made a “positive contribution” to News Corp’s bottom line, while in 2011 he declared that the newspaper had been profitable for most of the last 25 years. (*Mitchell has since clarified these remarks to Mumbrella see update below.)

“This question is bound up with print charges and divisional profits, but News (Corp’s) profit would fall very substantially without this paper,” Mitchell said, in 2012.

In today’s interview, Mitchell conceded the challenges the newspaper faces with the digital revenue model. He also spoke about the newspaper’s attempts to cut costs, which he said would see the newspaper halve its loss compared with last year.

“Like most newspapers we’ve lost classified advertising”, he said. “I think the aim of the game in paper is to lift your display advertising and lift your cover prices and then the balance that you lose from classified you need to try and make up with digital.

“Have we made that up? No we haven’t but we have cut costs pretty effectively and I would think we would go close to halving our loss from last year, this year.”

Mitchell did not declare the size of The Australian’s losses but, as Mumbrella reported back in August The Australian, like many News Corp papers has suffered double digit declines in print revenues.

The editor-in-chief of The Australian also said the newspaper would continue to “extract” money from print for as long as possible.

“I think there’s two ways of thinking about the future of our business”, he said. “There’s the people like Greg Hywood and our former CEO here Kim Williams who believe the task is to get to a digital future as quickly as possible.

“The other view is that print has some future and we are determined to extract dollars out of that for as long as we can on the way to building a digital future.”

“In our company, and certainly at The Australian, you’d find that more than 90 per cent of all our revenue comes from print. So even though we’ve built quite a growing digital business, and we have 65,000 paying subscribers, there’s a dime for every dollar we make in print.”

One of Australia’s most combative editors Mitchell also took aimed at Paul Barry and the ABC arguing that there was a “concerted effort” to paint The Australian as unprofitable.

“I think there is a concerted effort by media rivals and, particularly by people at the ABC, to paint The Australian as some loss making hole in the ocean,” he said.  “That’s not right and I wouldn’t think they would give us so much attention if they weren’t so perplexed by our journalism.”

Nic Christensen 

To read The Australian’s story on Chris Mitchell’s decision to lodge an ACMA complaint against Paul Barry click here.

UPDATE: Speaking to Mumbrella this afternoon Mitchell clarified his previous remarks explaining that rebates and recharges were an important part of The Australian’s contribution to News Corp Australia’s bottom line.

“The company as a whole would have $30m worse off without The Australian, i.e. various cost centres that recharge to us, would have been lost and the business as a whole would have made a lot less money,” said Mitchell.

“I wasn’t fudging when I said that a few years ago. The last profit we made was in 2008 and I’ve said a couple of times part of what has happened in the last two of years is a very large investment in digital.”

“Saying that you haven’t made a profit — that means that after all the retail print costs etc. it takes you into the red.”

“But that is very different from saying if The Oz didn’t exist News Corp would be better off without that loss. In fact it would be $30m worse off because people (other elements of the News Corp Australia business) charge us commercial rates for printers.”


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