News Corp reveals multimillion dollar drop in newspaper revenues
News Corp’s Australian newspapers saw revenues plummet in the last financial year, numbers deep inside the company’s annual report have revealed.
The disclosure goes further than the figures released by the US-headquartered company in August, which did not break down Australian performance in as much detail.
The annual report was released yesterday and suggest that in the 12 months to June this year, News Corp’s Australian newspaper division saw revenues drop by US$238.72m (AUD$315m). However, the biggest factor in the fall was the weakening Australian dollar, which made the result look much worse when reported in US dollars, which is the format the annual report follows.
The disclosure contained on p.50 in the News Corp annual report
News Corp is Australia’s largest newspaper publisher with mastheads in including The Australian, The Daily Telegraph in Sydney, The Courier Mail in Brisbane and the Herald-Sun in Melbourne. The company which also owns a large portfolio of community titles is currently in the final stages of acquiring APN News & Media’s newspaper portfolio.
A breakdown in the report shows revenues from the Australian newspaper division dropped by 16% year-on-year, of which 13% or US$194m was attributable to the exchange rate issue. That would suggest annual revenues for the division were US$1.492bn, or $AUD1.97bn. Although difficult to make a precise caluclation, it would also suggest that the actual local drop in revenues when currency fluctuations are taken out of the equation was around $45m.
According to the report, ad revenue was down by US$203m (AUD$270m), which it blamed on the “weakness in the print advertising market in Australia”. Again, currency fluctuation would make the number look worse. And subscriber revenues dropped by a further US$43m ($AUD$57m).
However, one factor improving the numbers for News Corp, is that the financial year contained 53 weeks, compared to 52 in the year before.
News Corp’s 2016 annual report cover
In August, News Corp revealed its global profits had slid by almost 30% in the 2016 financial year, however there was no geographical breakdown on the company’s operations.
Rupert Murdoch, News Corp executive chairman, said in the annual report: “Our successes are tempered by the headwinds we face, from an uncertain global economy to the challenges in the advertising marketplace, which are affecting all publishers around the world.
“At the same time, we remain focused on fundamentals, including operating efficiencies, portfolio diversification and the aggressive sharing of data and best practices.
“As we continue to capitalise on new revenue streams, we invest in quality content and its digital distribution, including in video and on mobile, so that we give people what they want, how they want to use it.”
Robert Thomson, News Corp CEO, said in the report: “In Australia, the Company entered into an agreement to purchase APN Australian Regional Media, which reaches 1.6m people across print, online and mobile. We expect the purchase, subject to regulatory and APN shareholder approval, to help us grow in northern Australia and result in significant cost and efficiency synergies in our production and distribution operations.”
The end of August saw News Corp launched a dedicated network of the company’s food brands Food Corp.
2.45pm update: This article, including the headline and introduction, has been amended to give greater emphasis to the impact of currency fluctuations on the results.
There is no Sun-Herald in Melbourne. That would be the Herald-Sun, the biggest-selling paper in the country.
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You’ve got the story totally wrong. Revenues declined by 16% of which 13% was due to foreign exchange A$ depreciation. So advertising and circulation only fell around 3%. After adjusting for FX, circulation revenue actually went up
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Apologies Bill – not the first time we’ve made that mistake. Now fixed
Cheers,
Tim – Mumbrella
Hi Rob,
Thanks for the comment. You are most right, we have amended the story to put more emphasis on the currency fluctuations.
Cheers,
Miranda – Mumbrella
Sounds like someone was trying to give news a kick but can’t read the financials. Any multinational reporting in USD is getting smashed by fx right now. Must. Remain. Impartial.
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