Rupert Murdoch to forgo his FY20 bonus as revenues slide at News Corp
News Corp executive chairman Rupert Murdoch will skip his annual cash bonus this financial year as the media business struggles to weather the financial storm caused by the COVID-19 pandemic.
The company’s revenues were hit hard in the third quarter of the year, with total revenue dropping 8% from the previous year and advertising revenue slipping 45% at News Corp Australia in April.
Murdoch won’t take his cash bonus for FY20
CEO Robert Thomson will also voluntarily drop 75% of his bonus as the company warns the worst is yet to come.
“We are operating in a different, difficult time. Every business and family is facing challenges and our thoughts, in particular, are for those who are suffering deeply and personally from the impact of COVID-19,” said Thomson.
“Clearly the pandemic will have an impact on our results in the fourth quarter, but all of our businesses are embarking on cost-cutting programs intended to deal with short-term need but also to ensure that the Company is well-equipped to prosper in a decidedly different business environment after the crisis abates.
“Pay reductions will be led by our executive chairman, Rupert Murdoch, who is voluntarily forgoing his entire cash bonus for the current fiscal year, and as chief executive I will forgo 75% of my annual cash bonus. The collective cuts in bonuses and other cost initiatives will have a positive impact on profitability and our cash position.”
The business reported $US2.27bn from the three months to March, an 8% drop from the same period the year prior, but one News Corp chalked up to foreign currency fluctuations and a drop in print advertising. The quarter also saw the media giant take a $US1bn loss, comprising mainly of a $US931m non-cash impairment charge for Foxtel.
News Corp doesn’t think the worst has come for Foxtel, with Kayo reporting 444,000 subscribers, 408,000 of which are paying, for the quarter – a big jump from the previous year. However, as of May 2, that number has dropped to 272,000 paying subscribers and the lack of live sport is likely to see that figure reduce further. Foxtel subscribers overall increased 1% for the quarter, buoyed by Kayo. The business said Foxtel will not need further shareholder funding.
Kayo is struggling without live sport
News Corp Australia reported a rise in digital subscribers, jumping from 493,200 to 613,300 as of March 31, 2020. But the declining ad revenue across April is expected to continue in May and will be reflected in the company’s end of year reporting. News Corp Australia has taken a number of steps to offset this pain, with staff taking pay cuts and reduced hours and 60 community titles suspended.
These changes have also impacted Foxtel which has undergone a number of redundancy rounds, dropping its staff number significantly. The subscription TV company recently signed a new deal with HBO, which secures its premium content offering for an undisclosed duration, potentially delaying the launch of HBO Max in Australia.
News Corp Australia saw its revenue decline 14% overall for the period.
At REA Group, News Corp’s Australian-based real estate platform, the COVID-19 pandemic put an end to signs of recovery in the real estate market, resulting in a drop across residential listings of 33% nationally. The business is working to offset the anticipated revenue loss with cost-saving initiatives including reduced marketing expenditure and a review of its supplier agreements. Q4 operating experiences are expected to be 20% lower than the previous year.
REA Group has a cash balance of $135m as of 30 April 2020 and entered into an additional $149m loan facility which isn’t expected to be drawn in the short term. CEO Owen Wilson said he was incredibly proud of the way the business has handled the pandemic.
“Prior to the impact of COVID-19, the market recovery was in full flight with very strong listing in the weeks leading up to mid-March. In February we saw record audience numbers and strong buyer interest, reinforcing signs of the positive market momentum.
“Our priority has been to help our customers and consumers adapt to the new market conditions by providing the right support measures and new product features.”
Only a cut in bonuses!!
what about the huge salaries
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How is Robert Thomson still collecting 25% of his bonus? What are his bonus KPIs? Keep the printers running?
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So let me get this right, people lose their jobs or are are asked to reduce salary and yet the two most senior execs only cut their bonus?
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Thoughts and prayers are with Rupert at this difficult time
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