News Corporation
News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content.
The company comprises businesses across a range of media, including digital real estate services, subscription video services in Australia, news and information services, and book publishing.
It operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide.
Employees: 25,500
Revenue: $10.39B for FY2022
HQ Location: Manhatten, New York City, U.S.
What they do:
They are a global, diversified media and information services company.
They strive to educate, enlighten and entertain people around the world.
They are dedicated to making a positive impact through the content they produce and services they provide, and through their diversity, equity, and inclusion practices, sustainability policies, and philanthropic contributions.
News Corp comprises industry-leading media and information services brands focused on creating authoritative and engaging content.
The business brands include Dow Jones, Harper Collins Publishers, Realtor.com, News Corp Australia, News Uk, Foxtel Group, Rea Group, New York Post, storyful.
Their vision and priorities:
Passionate.
Principled.
Purposeful.
They are dedicated to delivering value to their customers and their shareholders with premium products and services that inform and inspire.
Things to know right now
Withdrawal of Proposal to Explore Potential Combination with Fox Corporation (“Fox”)
In October 2022, the Company announced that its Board of Directors, following the receipt of letters from K. Rupert Murdoch and the Murdoch Family Trust, had formed a special committee of independent and disinterested members of the Board to begin exploring a potential combination with Fox. In January 2023, the Board of Directors received a letter from Mr. Murdoch withdrawing the proposal to explore the Potential Transaction. As a result of the letter, the Special Committee has been dissolved.
Historic shift in the UK in how people receive information
News UK, The Sun reported a historic shift, with digital advertising outpacing print as its online audience surged 33% in one quarter to 165 million monthly average unique globally, including 173% growth for TheSun.com, driven by the successful launch of The Sun US.
Potential Move Sale
Engaged in discussions with CoStar Group regarding a potential sale of Move. This transaction would be designed to create shareholder value and strengthen Realtor.com®’s competitive position.
Head count reduction imminent
It is expected that 5% headcount reduction, or around 1,250 positions is expected this calendar year, which will in turn create a robust platform for future growth.
Business Organisational Segments:
Digital Real Estate Services
They own 61.6% of REA Group Limited, which owns the leading digital portals for residential and commercial property in Australia based on monthly site visits.
REA Group
REA Group is a market-leading digital media business specializing in property, with operations focused on property and property-related advertising and services, as well as financial services.
Property and Property-Related Advertising and Services
REA Group advertises property and property-related services on its websites and mobile apps across Australia. REA Group’s Australian operations include leading residential, commercial, and share property websites realestate.com.au, realcommercial.com.au, and Flatmates.com.au, as well as property research site Property.com.au. Additionally, REA Group operates media display and data services businesses, serving the display media market and markets adjacent to property, respectively.
Financial Services
REA Group’s financial services business encompasses an end-to-end digital property search and financing experience and mortgage broking services primarily under its Mortgage Choice brand. REA Group has continued to execute its financial services strategy by growing its nationwide broker network and developing innovative products and partnerships, including a digital loan application with Ubank (a division of National Australia Bank Limited).
Move
Move is a leading provider of digital real estate services in the U.S. Move primarily operates Realtor.com®, a premier real estate information, advertising, and services platform. Realtor.com® also sources new construction and rental listing content from a variety of sources, including directly from homebuilders and landlords, as well as from listing aggregators.
The Company’s digital real estate services businesses operate in highly competitive markets that are evolving rapidly in response to new technologies, business models, product and service offerings, and changing consumer and customer preferences.
Subscription Video Services
The Company’s Subscription Video Services segment provides sports, entertainment, and news services to pay-TV and streaming subscribers and other commercial licensees, primarily via cable, satellite, and internet distribution. This segment consists of the Company’s 65% interest in NXE Australia Pty Limited, which, together with its subsidiaries, is referred to as the “Foxtel Group” (the remaining 35% interest in the Foxtel Group is held by Telstra Corporation Limited), and Australian News Channel (“ANC”).
The Foxtel Group
The Foxtel Group is the largest Australian-based subscription television provider, with a suite of offerings targeting a wide range of consumers.
The Foxtel Group generates revenue primarily through subscription revenue from its pay-TV and streaming services as well as advertising revenue. Its streaming services, including Kayo Sports, BINGE, Foxtel Now, and Flash, provide a diversified portfolio of subscription television services that allow the Foxtel Group to provide services targeted at a wide range of Australian consumers.
Australian News Channel
ANC operates nine channels and has carriage rights for two additional channels in Australia featuring the latest in news, politics, sports, entertainment, public affairs, business, and weather. ANC is licensed by Sky International AG to use Sky trademarks and domain names in connection with its operation and distribution of channels and services. ANC’s channels consist of Fox Sports News, Sky News Live, Sky News Weather, Sky News Extra, Sky News Extra 1, Sky News Extra 2, Sky News Extra 3, Sky News New Zealand, and Sky News Regional. ANC channels are distributed throughout Australia and New Zealand and available on Foxtel and Sky Network Television NZ.
Dow Jones
The Company's Dow Jones segment is a global provider of news and business information, which distributes its content and data through a variety of owned and off-platform media channels including newspapers, newswires, websites, mobile apps, newsletters, magazines, proprietary databases, live journalism, video, and podcasts. This segment consists of the Dow Jones business, whose products target individual consumers and enterprise customers and include The Wall Street Journal, Barron’s, MarketWatch, Investor’s Business Daily, Factiva, Dow Jones Risk & Compliance, Dow Jones Newswires, and OPIS.
The Dow Jones segment’s consumer products, including its newspapers, magazines, digital publications, podcasts, and video, compete for consumers, audience, and advertising with other local and national newspapers, web and app-based media, news aggregators, customized news feeds, search engines, blogs, magazines, investment tools, social media sources, podcasts, and event producers, as well as other media such as television, radio stations, and outdoor displays.
Book Publishing
The Company’s Book Publishing segment consists of HarperCollins, the second-largest consumer book publisher in the world based on global revenue, with operations in 17 countries. HarperCollins publishes and distributes consumer books globally through print, digital and audio formats. Its digital formats include e-books and downloadable audiobooks for a variety of mobile devices.
News Media
The Company’s News Media segment consists primarily of News Corp Australia, News UK, and the New York Post. This segment also includes Wireless Group, operator of talkSPORT, the leading sports radio network in the U.K., and Virgin Radio, the Company’s recently launched TalkTV, which is available on multiple platforms including linear television and streaming, and Storyful, a social media content agency that enables the Company to source real-time video content through social media platforms. The News Media segment generates revenue primarily through circulation and subscription sales of its print and digital
News Corp Australia
News Corp Australia is one of the leading news and information providers in Australia by readership, with both print and digital mastheads covering a national, regional, and suburban footprint.
News UK
News UK publishes The Sun, The Sun on Sunday, The Times, and The Sunday Times, which are leading newspapers in the U.K.
New York Post
NYP Holdings (“NYP”) is the publisher of the New York Post (the “Post”), NYPost.com, PageSix.com, Decider.com, and related mobile apps and social media channels. The Post is the oldest continuously published daily newspaper in the U.S., with a focus on coverage of the New York metropolitan area. The Post provides a variety of general interest content ranging from breaking news to business analysis and is known in particular for its comprehensive sports coverage, famous headlines, and iconic Page Six section, an authority on celebrity news.
Other
The Other segment includes the Company’s general corporate overhead expenses, costs related to the U.K. Newspaper Matters, and expenses associated with the Company’s cost reduction initiatives.
Their Competitors
Hearst
iHeartmedia
Facebook
Warner Media LLC
CBS Corp
Their financial calendar
Q1: August-October - Earnings 8th November 2022
Q2: November-January - Earnings 5th February 2023
Q3: February-April - Around 5th May 2023
Q4: May-July - Around 8th August 2023
Next Earnings Report:
5th May 2023
Positives from the last earnings report:
At the Dow Jones segment, revenues from its professional information business grew 45%, benefiting from the acquisitions of OPIS and CMA and the ongoing momentum in its Risk & Compliance products
Revenues at News UK continued to benefit from strong digital advertising revenue growth at The Sun, highlighting the brand’s successful expansion into the U.S. and increase in yield
Dow Jones Segment:
Revenues from its professional information business grew 45%, benefiting from the acquisitions of OPIS and CMA and the ongoing momentum in its Risk & Compliance products
Circulation and subscription revenues increased $61 million, or 17%, which includes the contributions from the acquisitions of OPIS and CMA.
Circulation revenue grew 3%, reflecting the continued growth in digital-only subscriptions, primarily at The Wall Street Journal.
Professional information business revenues grew 45%, primarily driven by the acquisitions of OPIS and CMA and growth in Risk & Compliance products, partially offset by negative foreign currency fluctuations.
Revenues from the Risk & Compliance products grew 13%, which includes a 7% negative impact from foreign currency fluctuations.
Digital circulation revenues accounted for 69% of circulation revenues for the quarter, compared to 67% in the prior year.
Total subscriptions to The Wall Street Journal grew 4% compared to the prior year, to nearly 3.8 million average subscriptions in the quarter.
Digital-only subscriptions to The Wall Street Journal grew 9% to over 3.1 million average subscriptions in the quarter, and represented 84% of total Wall Street Journal subscriptions.
Subcription Video Services:
Higher revenues from Kayo and BINGE, driven by increases in both volume and pricing, and higher commercial revenues were partially offset by the impact from fewer residential broadcast subscribers and lower advertising revenues.
Foxtel Group streaming subscription revenues represented approximately 26% of total circulation and subscription revenues in the quarter, as compared to 19% in the prior year
Challenges from the last earnings report:
A surge in interest rates and acute inflation had a tangible impact on all of their businesses.
Revenues in the quarter were $2.52 billion, a 7% decrease compared to $2.72 billion in the prior year, reflecting a $171 million, or 6%, negative impact from foreign currency fluctuations. Declines also due to lower revenues at the Book Publishing segment primarily due to lower book sales and lower revenues at the Digital Real Estate Services segment due to challenging housing market conditions in Australia and the U.S.
Adjusted Revenues decreased 3%
Net income in the quarter was $94 million compared to $262 million in the prior year. Primarily due to lower Total Segment EBITDA
Total Segment EBITDA in the quarter was $409 million compared to $586 million in the prior year
News Media
Revenues in the quarter decreased $59 million, or 9%, as compared to the prior year, driven by a $65 million, or 10%, negative impact from foreign currency fluctuations and lower advertising revenues in constant currency
Revenues at News Corp Australia and News UK decreased 13% and 10%, respectively, as both were impacted by negative foreign currency fluctuations.
Circulation and subscription revenues decreased $20 million, or 7%, compared to the prior year, primarily due to a $31 million, or 11%, negative impact from foreign currency fluctuations and lower print volume. The decline was partially offset by cover price increases and digital subscriber growth.
Advertising revenues decreased $37 million, or 13%, compared to the prior year, primarily due to a $27 million, or 10%, negative impact from foreign currency fluctuations and lower print advertising at News UK and News Corp Australia.
Book Publishing
Revenues in the quarter decreased $86 million, or 14%, compared to the prior year, primarily driven by lower book sales due to slowing consumer demand industry-wide, difficult frontlist comparisons and some logistical constraints at Amazon.
The decline also reflects a $22 million, or 4%, negative impact from foreign currency fluctuations.
Digital sales declined 7% compared to the prior year due to lower e-book sales
Dow Jones Segment
Advertising revenues decreased $10 million, or 7%, primarily due to a 13% decline in print advertising revenues and a 3% decline in digital advertising revenues.
Digital advertising accounted for 59% of total advertising revenues in the quarter, compared to 56% in the prior year.
Subscription Video Services
Revenues of $462 million in the quarter decreased $36 million, or 7%, compared with the prior year, due to a $52 million, or 10%
Digital Real Estate Services:
Move’s revenues in the quarter decreased $23 million, or 14%, to $146 million, primarily as a result of lower real estate revenues. Real estate revenues, which represented 83% of total Move revenues, decreased $25 million, or 17%, driven by the impact of the macroeconomic environment on the housing market, including higher household interest rates, which has led to lower lead and transaction volumes.
Revenues from the referral model, which includes the ReadyConnect Concierge℠ product, and the traditional lead generation product decreased due to these factors.
The referral model generated 27% of total Move revenues in the quarter compared to 32% in the prior year. Based on Move’s internal data, average monthly unique users of Realtor.com® ’s web and mobile sites for the fiscal second quarter declined 23% year-over-year to 66 million.
Lead volume declined 37%.
Revenues at REA Group decreased $47 million, or 16%, to $240 million, driven by a $26 million, or 9%, negative impact from foreign currency fluctuations, lower financial services revenues due to declines in settlement activity and lower Australian residential revenues due to the decline in national listings, most notably in Sydney and Melbourne.
Australian national residential buy listing volumes in the quarter declined 21% compared to the prior year, with listings in Sydney and Melbourne down 34% and 31%, respectively.