Murdoch’s News Corp Australia prepares to slash costs by $20 million
Rupert Murdoch’s News Corporation will slash $20 million in costs from the business that owns The Australian, The Daily Telegraph, and The Herald Sun over the next two years, in a bid to make the newsrooms financially viable over the long term.
The project, which staff are referring to as ‘Audience 25’, is the latest move by the Murdoch-controlled media company to find efficiencies against the backdrop of rising inflation and broader global economic pressures. Media sources, who spoke on the condition of anonymity because the project is confidential, said senior executives are in the process of identifying where to reduce costs.
News Corp Australia owns a range of local assets, including The Australian, The Herald Sun and The Daily Telegraph.Credit:Rhett Wyman
The sources said the program was being led by national community masthead network editor, John McGourty, and Rowan Hunnam, head of digital, national regional and community network. News Corp declined to comment.
News Corp owns a range of local assets, including The Australian as well as cable TV operator Foxtel and streaming services Kayo and Binge. It is one of many media companies locally and globally that is facing financial pressure from rising costs. A weak and increasingly volatile advertising market has also exacerbated these pressures, and the publishing industry is also facing major increases in the cost of paper, caused by soaring electricity prices and shipping costs.
Managing costs is a common exercise for traditional media organisations, but the scale of this project is far bigger than usual and is currently the largest cost-cutting effort underway locally. However, it is smaller than Fairfax Media’s major cost-cutting exercise. Fairfax, now owned by Nine (the owner of this masthead), cut about $100 million from its cost base in 2018. News Corp’s project is also occurring despite News Corp benefitting from lucrative licensing deals with Google and Meta, which were struck in 2021.
There are already signs News Corp Australia is making changes to drive revenue growth. This masthead reported last week the company is planning to increase the price of its tabloids across the country and will redesign its print editions.
News Corp began to transform the local division about three years ago, hiring PwC and Deloitte to consult on cost cuts, centralising editorial and commercial functions, and conducting a review of regional newspaper business. News Corp then shut more than 100 print publications, a decision that affected about 1000 jobs. Jobs were also axed at the national masthead The Australian and metropolitan newspapers, including The Daily Telegraph and The Herald Sun.
In 2021, News Corp overhauled its commercial division as part of an attempt to reposition itself as a company that was more focused on attracting readers online than in print.
The details of the proposed $20 million cost cuts are unclear, but insiders suggest it could lead to more company-wide editorial teams (News Corp currently runs a company-wide sport and business network) or in centralising production resources. If that is the case, job losses are inevitable.
The last time News Corp tried to centralise its news operations was in 2012 under then-chief executive Kim Williams. The publisher’s east coast operations fell from 19 to five under the changes implemented after Williams hired Boston Consulting Group.
News Corp Australia’s parent company, News Corp, will this week release its quarter two results to the market, where it is likely to face questions about a failed tie-up with Fox Corp and plans to sell its 80 per cent stake in digital real-estate listings company, Move.
That deal, if successful, is expected to be worth more than $US3 billion ($4.3 billion) and was enough to have changed the prospect of a tie-up between Fox and News Corp.
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
Most Viewed in Business
From our partners
Source: Read Full Article