News Corp chief Robert Thomson says robust growth on the horizon
The recent sale of Foxtel to global sports streaming service DAZN has strengthened News Corp’s balance sheet and will increase return on invested capital, the media company’s CEO Robert Thomson says.
News Corporation chief executive Robert Thomson has expressed confidence that the current uncertainty gripping world markets will be short-lived, and forecast “robust growth when the heavens return to equilibrium”.
Speaking upon the release of News Corp’s third quarter results on Friday (AEST), Mr Thomson said the media company has “pursued digital growth, realigned our assets, focused relentlessly on cost discipline and asserted the essential value of our intellectual property in a changing, challenging content world.”
News Corp’s total segment earnings before interest tax, depreciation and amortisation (EBITDA) of $US290m compared favourably to the $US259m in the third quarter of 2023-24.
Third quarter revenues were $US2.01bn, a 1 per cent increase compared to $US1.99bn in the prior year, driven by the growth of Dow Jones, digital real estate services and book publishing.
Net income from continuing operations in the quarter was $US107m, a 67 per cent increase compared to $US64m in 2023-24.
“The sustained strength of News Corp’s third quarter results reflects the company’s strategic transformation,” Mr Thomson said.
“These potent results come despite political turbulence that has clearly affected some of our business partners and undermined their ability to plan coherently. We firmly believe that this disruption is ephemeral and that the US has the potential for robust growth when the heavens return to equilibrium.
“The Administration’s pursuit of sensible deregulation and a sound energy policy, combined with America’s economic prowess and innate creativity should surely produce favourable results.
“When (economist) Adam Smith spoke sagely of the power of the “invisible hand”, he did not envisage an economic slap in the face from the unruly introduction of exorbitant tariffs. “America’s “animal spirits” do need emancipation from the cage of uncertainty.”
The recent sale of Foxtel to global sports streaming service DAZN has “meaningfully strengthened” News Corp’s balance sheet and will increase return on invested capital, Mr Thomson said.
The sale, which netted $3.4bn, marked a “significant moment” for News Corp as the media company continues to focus on its core pillars, the CEO said.
“The Foxtel deal itself is a living, breathing example of our continuing willingness to make significant decisions about structure and focus in the interests of our shareholders,” Mr Thomson said.
“If you look at what we’ve done over the past few years, we are certainly not strategic somnambulists. We have a fairly clear vision of trends and challenges and opportunities and we are now in a prime position to take further advantage for … our shareholders.
“The assets we have retained and developed are world class, as are our teams, and they are in sectors prime for growth.
“We have never been complacent but we do have some reason to be confident.”
Mr Thomson noted growth in News Corp Australia’s digital subscriptions in the lead-up to last week’s federal election.
“News Corp Australia’s mastheads provided an important platform for informed reporting and debate during the recent election campaign, and we also saw continued growth in digital subscriptions, reaching 1.1 million,” he said.
“Meanwhile, News.com.au was the number one digital news brand in page views, achieving 292 million per month in March, according to Ipsos.
“And Sky News Australia was the country’s number one YouTube news channel with 5.5 million subscriptions, reflecting both local and global reach.”
Mr Thomson also spoke of the critical importance of quality journalism amid the surge of AI.
“The enduring importance of quality journalism cannot be underestimated in the midst of a political and economic maelstrom. The currency of credibility will become even more crucial as AI continues its exponential growth and inevitably blurs the lines between the actual and the anthropomorphic,” he said.
Mr Thomson singled out the performance of Dow Jones, which achieved revenues of $US575m in the three months to March 31.
“There is still much toil ahead but we saw digital circulation revenue expand 14 per cent, the fastest growth rate in almost three years, and recorded improvement in digital ARPU year-over-year and quarter-over-quarter, while total consumer subscriptions surpassed the six million milestone,” he said.
“Since our re-segmentation in 2020, not only has Dow Jones profitability more than doubled, but total subscriptions have risen over 60 per cent, with more than 90 per cent now fully digital. “The rather active news cycle has unsurprisingly contributed to further increases in audience traffic and subscriptions in recent days.”
News Corp is the publisher of The Australian.
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