News Corp ‘gaining momentum’

News Corp chief Robert Thomson has forecast strong growth for the media company, following its most profitable 12 months in nearly a decade.

News Corp chief executive Robert Thomson. (Photo by Jim WATSON / AFP)

News Corp chief executive Robert Thomson has forecast strong growth for the media company, following on from its most profitable 12 months since 2013.

Releasing News Corp’s annual report on Tuesday, Mr Thomson said he was bullish about the company’s future, noting that News Corp was “gaining momentum” despite the obvious “stresses and strains of a pandemic have stretched the social fabric and the commercial canvas.”

In the fiscal year 2021, the company’s overall revenues rose by four per cent, and by 30 per cent in the fourth quarter alone. Profitability improved by 26 per cent for the year.

“In short, we had the most profitable year since we created the new News Corp (in 2013); Dow Jones had its most profitable year since it was acquired in 2007; and HarperCollins and Move also recorded their most profitable years,” Mr Thomson said in his chief executive’s message in the annual report.

“And we believe there is clearly more growth ahead.”

The News Corp boss said the company, which owns The Australian and metropolitan mastheads The Daily Telegraph, Herald Sun, Courier Mail and The Advertiser was generating record profits and cash, “and that has given us the ability to make opportunistic acquisitions to bolster the company and generate even more momentum”.

Mr Thomson noted the continued success and “record subscriber growth” of News Corp’s Australian pay TV business Foxtel.

“The Foxtel narrative is particularly positive, as our early emphasis on streaming and on securing long-term sports and entertainment rights has put the company on a decidedly upward trajectory. Our paying subscribers were 40 per cent higher and fiscal year revenue rose 10 per cent.

“We are pleased with the exponential evolution of both Kayo, our sports streaming product, and BINGE, our entertainment streaming service, as they combine world-class technology, clever user interfaces and high-quality, compelling content.

“It is worth pausing for a moment to consider how the Foxtel narrative has changed decisively and positively. Where once we were being asked whether we would need to put extra funds into Foxtel, now we have attractive options for a growing, contemporary business that has a tangible upside.”

In the year to June 30 2021, Foxtel’s paid streaming subscribers exceeded two million, an increase year-on-year of 155 per cent.

“That success has naturally given us much optionality as we consider Foxtel’s rather favourable future,” Mr Thomson said.

There has been widespread industry speculation surrounding a potential Foxtel stock market listing early next year, which has been fuelled by the continued strength of Binge and Kayo, and the recent launch of live news streaming platform Flash.

Earlier this month, Foxtel chief executive Patrick Delany addressed the market talk about a possible float, telling The Australian: “That’s a matter for our shareholders”.

Writing in the company’s annual report, Mr Thomson also referenced the payment-for-content deals that the company has struck with Google and Facebook.

“The past year has seen the revaluing of our content through landmark news payment agreements with the major tech platforms. These deals, the financial terms of which are confidential, will add significant revenue annually – clearly into nine figures – and are a profoundly important part of the ongoing transformation of the content landscape,” he said.

“We are also watching the evolution of the digital ad market, which, historically, has lacked transparency – the active interest of regulators worldwide should reduce opacity and

provide higher yields for publishers.”