A year after being acquired by News Corp, Business Spectator cost the company $2.5 million despite pulling in revenues of $3.4 million. Its stablemate Eureka Report added only $671,000 in operating income.
News Corp bought Business Spectator and Eureka Report from Australian Independent Business Media in June 2012 for $30 million.
The deal was speculated at the time to have overpriced the company, an impression aided when journalism megastar Alan Kohler, one of AIBM’s owners and chief commentators, told The Age that News Corp had made him an offer he “couldn’t refuse”.
Leaked figures published today by Crikey add strength to the argument that News overpaid, showing in June 2013 Business Spectator was burning a hole in News Corp’s pockets not filled by the surprisingly modest revenues brought in by the Eureka Report.
A year after the purchase, AIBM was both part of The Australian and still considered separately when it came to operating revenues and expenses.
The analysis for the business unit shows subscription revenues were running behind budget, pulling in just $4.4 million, while the budget had planned for $5.1 million. Advertising revenue was also behind targets — $3.9 million instead of $4.2 million.
Meanwhile, total wages for the division’s 52 staff — 27 at Business Spectator and 21 at Eureka Report — ran to $6.7 million. Total expenses for the division before depreciation were $10.3 million.
Despite Eureka Report being widely seen as the jewel in the crown of AIBM, it couldn’t counteract the losses at the rest of the division. Total operating income was -$1.9 million. That amounts to the $2.5 million lost in Business Spectator, offset by the $670,000 made at the Eureka Report.
Intriguingly, Eureka Report had only 14,294 subscribers on June 30, 2013. Many had assumed News bought the group to take the business media fight to The Australian Financial Review and its lucrative subscription base. But subscriber numbers at the personal investment newsletter either went backwards or stayed the same in the first year of News ownership. When Eureka Report was sold, it was reported as having 15,000 subscribers by Fairfax, and 16,000 by Crikey.
The figures, however, did show AIBM remained one of the leanest parts of the News Corp operation. Average wages at AIBM were just $127,000 a year. The equivalent figure at The Australian is $178,000 a year.
Crikey owner and chairman Eric Beecher was one of the owners of AIBM before it was sold.
The AIBM stable was not unusual in its financial position. Most of News Corp’s digital efforts appeared to be losing propositions in 2012-13. For example, although True Local beat expectations and made a small profit of $1 million, News Ticketing doubled its losses to $3 million, and Sporting Pulse almost tripled its losses to $4 million. Carsguide and Get Price both recorded small losses. Overall, News’ digital media investments lost $3 million in 2012-13, though that was better than the $12 million loss reported the year before.
I was one of those who signed up to two of the Spectators while it was still associated with Crikey. I noticed the comment threads become increasingly rancid when they were exposed to a Murdoch audience. Environment Spectator had the temerity to accept the science of global warming, and Technology Spectator, was, on the whole, supportive on the NBN. This does not fit the average Murdoch reader’s world view.
I got annoyed when they merged the distinct web sites into one “Business Spectator” site – the newsletter I had never signed up for. I actually saw some poor Murdoch victim complaining about a “business” site taking global warming seriously! After a while, they brought in a paywall, but only for the “business” journalists who had never attracted my interest. Commentary become restricted to paying subscribers, and the comment thread dwindled to almost nothing. Perhaps this was preferable to the flame wars of the past, but on the whole I enjoy other readers comments, and sometimes even the flame wars.
Eventually I stopped subscribing. I cannot remember the exact reason. Part of it was the loss of the distinct web sites. I detest the very idea that, somehow, “business” is more important than the environment. Tristan Edis remains a very fine journalist. But I found Giles Parkinson and now I read his newletter, even if it does have that dreaded word “economy” in its title. And I no longer have to worry about that icky, skin crawling feeling that accompanies the viewing of any content from Murdoch world.
Remember how Murdoch destroyed MySpace? Doesn’t understand digital media.
Correction: Climate Spectator, not Environment Spectator.