Chris Mitchell (the former editor-in-chief of The Australian) has lashed out at Fairfax and its CEO Greg Hywood in his weekly column in the Oz’s media section, while defending the Oz‘s commitment to print news.
In his column, Mitchell reveals that The Australian’s revenue is up $40 million a year “largely on the back of increased consumer revenue (newspaper cover prices and paid digital subscriptions) and strong increased display advertisers flock to the last full size metro broadsheet”. But there is no mention of costs, and we can presume that the paper is still a loss-maker because Mitchell would not have been backward in informing readers of that fact.
Another thing that stuck out was Mitchell’s claim that Fairfax’s share price when Hywood took over was $5 and now “languishes below $1″. That’s been changed to “before Greg Hywood took over” in the online copy this morning, and just as well — the share price the day of Hywood’s 2011 appointment as CEO was $1.38. In fact, the last time the share price was over $5 was in 2007, four years before Hywood took the reins.
“Yes, as with Fairfax, The Australian was very badly hurt by collapsing employment advertising for mainly federal and state government jobs on Saturdays and IT jobs on Tuesdays,” Mitchell pointed out. And he included a dig at “Crikey dweebs” for daring to point out that discounted paper sales of the Oz to various groups such as teachers, hotels and airlines were used to inflate circulation figures. Mitchell said even these papers were sold “at profitable prices for the publisher”.
But there was no mention of the latest round of cost cutting at News that wants $40 million in savings from core costs at the newspapers this year (half that figure was obtained by June 30, with the rest to come this year). Nor did he mention that News Corp warned it its recent annual report that US$1 billion of goodwill in the news and information and cable TV (Fox Sports) face possible impairment this year, plus any restructuring costs.
Nor was there any mention of the latest News Corp filing with the US Securities and Exchange Commission, which also confirms the Australian operations remain under pressure. Buried deep in the notes to the accounts, News reveals that revenues from its Australian operations were “approximately” US$2.3 billion for “fiscal 2016”. That was unchanged from 2014-15, down from US$2.6 billion in 2013-14 and 17%, or around US$500 million under the US$2.8 billion in 2012-13, when the Murdoch empire was split in two.
The Australian business includes revenues from 100%-owned Fox Sports and the 62%-controlled subsidiary REA Group, both of which have risen, disguising the full extent of the revenue fall for the newspapers. And News Corp papers (especially the Oz) failed to report what the annual report said about the performance of Australian news papers in 2015-16:
“Revenues at the Australian newspapers for the fiscal year ended June 30, 2016 decreased 16% compared to fiscal 2015, with the impact of foreign currency fluctuations of the U.S. dollar against the Australian dollar resulting in a revenue decrease of $194 million, or 13%. Advertising revenues declined $203 million, primarily as a result of the negative impact of foreign currency fluctuations and weakness in the print advertising market in Australia. Circulation and subscription revenues declined $43 million due to the negative impact of foreign currency fluctuations, as price increases, digital subscriber growth and the positive impact of the 53rd week more than offset print volume declines.”
Bwah, take that you ‘dweebs’.
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