News Corp chief executive Robert Thomson has delivered the company’s financial results for the three months ending March 31, 2022.
Thomson said: “News Corp revenues and profitability set new records for the third quarter, building on the momentum of preceding record quarters. We have now achieved more in profitability through the first three quarters of fiscal 2022 — at over $1.3 billion [all figures US$] and rising 27 per cent compared to the prior year — than in any entire fiscal year since our rebirth in 2013.
“Through the first three quarters of fiscal year 2022 News Corp is well on track for its most profitable year since separation. Clearly, besting last year’s record results.”
News Media was the biggest contributor to News Corp’s growth in profitability in Q3, with segment EBITDA approximately 388% higher in the quarter, explained Thomson.
“We saw continued strong performance in digital advertising across the segment alongside a notable rebound in print advertising at News UK. News Australia had a strong quarter with substantial improvement in profit contribution, thanks in part to our deals with the tech platforms, our continuing cost discipline and the development of our digital platforms.
Australian news mastheads add over 100,000 YOY
Closing digital subscribers at News Corp Australia as of March 31, 2022 were 946,000 (876,000 for news mastheads), compared to 807,000 (760,000 for news mastheads) in the prior year.
(Source: News Corp internal data)
Circulation and subscription revenues at Dow Jones increased $48 million, or 15%, which includes $18 million and $10 million contributions from the acquisitions of IBD and OPIS, respectively. Circulation revenue grew 16%, reflecting the acquisition of IBD and continued strong growth in digital-only subscriptions at The Wall Street Journal.
Total subscriptions to The Wall Street Journal grew 10% compared to the prior year, to over 3.7 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 16% to over 3 million average subscriptions in the quarter, and represented 82% of total Wall Street Journal subscriptions.
The New York Post renaissance continued with its big audience, strong advertising growth and improved profit contribution, said Thomson.
“The New York Post digital network now ranks among the top news sites in the US and has grown nearly eight-fold since fiscal 2014, to over 172 million average monthly unique users in the third quarter.
“News UK also had a healthy profit contribution with significant revenue improvement of The Sun where digital advertising outpaced print. It is also notable that thesun.com, the brand extension of The Sun in the US market increased page views in Q3 by over 260% year-over-year to 500 million with yields significantly improving.”
Thomson also mentioned the recently launched TalkTV channel and its star attraction: “Piers Morgan’s much-anticipated program launched on April 25. And it more than exceeded expectations in reach across the UK, the US and Australia, thanks to the power of our platforms, the pivotal partnership with Fox News and the quality of the programming. Not only does TalkTV plan to be a broad church of diverse views and lively discussion, it offers a new opportunity to leverage our strong brands, talented people, and premium video content in the UK and around the world.
“In Subscription Video Services, the third quarter saw continued progress in reshaping the Foxtel Group as a growth-oriented subscription business, with continued success in streaming, stable revenues and solid cash generation. Notably Kayo and BINGE, both surged in the quarter and are now reaching record numbers of subscribers, Kayo plans to implement a price increase as it benefits from its scale platform and high-quality production, which is driving record ratings at the start of the season for both the NRL and the AFL. Overall, total paying streaming subs reach nearly 2.6 million up 62%.”
See also: Foxtel Group third-quarter results reveal rise in streaming subscriber numbers
Tech platform payments grow News profits
News Media was the company’s biggest contributor to News Corp’s growth in profitability in Q3, with segment EBITDA approximately 388% higher in the quarter. “We saw continued strong performance in digital advertising across the segment alongside a notable rebound in print advertising at News UK. News Australia had a strong quarter with substantial improvement in profit contribution, thanks in part to our deals with the tech platforms, our continuing cost discipline and the development of our digital platforms.”
News Corp CFO Susan Panuccio added: “News Media momentum continued during the quarter revenues were $580 million up 5% versus the prior year. We again saw improvement in advertising as well as strong growth in circulation and subscription revenues, benefited by the contribution from our recent content licensing revenues.
“Within the segment revenues at NewsCorp Australia and News UK increased 2% and 4% respectively. Wireless Group and the New York Post also continue to show strong top line growth.
“Circulation and subscription revenues rose 5% benefiting from strong digital subscriber growth, incremental revenues from the platform agreements and cover price increases. Currency headwinds, negatively impacted circulation and subscription revenues by $12 million or four percentage points.
“Advertising revenues increased 9% compared to the prior year with strength in digital across all our key markets. Most notably at The Sun, which more than double digital advertising revenues versus the prior year. Currency negatively impacted advertising revenues by $10 million or five percentage points. Segment EBITDA of $39 million increased $31 million compared to the prior year, reflecting the higher revenues.
“Margins improved to almost 7% from 1% last year. Results were partially impacted by hiring investment related to TalkTV and marketing support for new digital product offerings at NewsCorp Australia.”
In answer to an analyst’s question, Thomson had some detail on the ad revenue growth: “Dow Jones advertising was up 20%; News UK, 32%; New York Post, 13%; and News Australia, 2%.”
