Internal operating accounts for the Australian arm of Rupert Murdoch’s News Corporation show alarming revenue and profit falls across the metropolitan newspapers in fiscal year 2013.
The accounts, leaked to InDaily’s sister publication Crikey, show almost 200 jobs went at News Corporation’s Adelaide operation in Waymouth Street.
The 200-page report was produced for management on July 5, 2013, just five days after the end of that financial year.
While job cuts, revenue and circulation falls at News have been well known, the detail of just how many jobs were lost and where has been heavily protected by the company.
The accounts show News lost 195 permanent staff members at its Advertiser and Sunday Mail operation in 2012-13 and another 23 in its suburban newspaper outlet, Messenger.
It leaves just under 300 employees at The Advertiser and Sunday Mail.
There have been more job losses since the date of the leaked accounts.
The figures do not distinguish between journalists and other roles, and they don’t show how many staff were made redundant versus how many left or were fired.
But the figures do reveal that the cost-cutting at most of News’ outlets was every bit as severe as that announced by Fairfax.
The operating accounts show Melbourne’s Herald Sun was the mainstay of News Corp in Australia, with the weekday paper generating revenues of $250 million in 2012-13, down 13.5 per cent on the year before, and operating income of $35 million, down 41 per cent.
The Adelaide’s Advertiser’s weekday editions generated gross revenues of $138 million (down 15 per cent) and operating income of $22 million (down 47 per cent).
Operating income (also called Earnings Before Interest and Taxes (EBIT) reflects a company’s profitability; it’s here that The Advertiser and Sunday Mail’s fortune’s flagged most in 2012-13.
The accounts show that The ‘Tiser’s budgeted EBIT for the year was $30 million – the actual result, however, came in at $22 million – almost half that of the previous year ($42 million).
The Sunday Mail’s EBIT was budgeted to be $12 million, came in at $9 million and was $14.6 million the previous year.
Combined with the sharp earnings drop already reported in 2013-14, and with circulation and advertising revenues continuing to decline, the accounts suggest News Corp’s Australian newspapers, including the national, metro and regional publications, will struggle to break even this financial year.
The confidential operating accounts for News Corp Australia have never been seen by investors and provide a detailed picture of a print business in rapid decline, with cost-cuts, cover price increases, while new digital subscriptions and digital advertising fail to make up for the loss of revenues from advertising and circulation.
Crikey received a copy of the last weekly financial statements for 2012-13, which provide line-by-line, year-on-year comparisons across the business, from a well-placed source concerned about misrepresentation of the profitability of News Corp’s Australian newspapers.
The accounts raise the question of how long the rest of the News Corp empire can carry the underperforming Australian newspapers business.
The accounts were produced last year just as Murdoch spun off his troubled print media assets worldwide from the profitable Fox film and cable television empire in the United States, in the wake of the UK phone-hacking scandal.
News Corp was spun out on June 28, 2013, from the renamed 21st Century Fox, and houses mastheads including The Wall Street Journal and New York Post in the US, the Times and Sun in the UK, News’ Australian newspapers, plus book publisher Harper Collins, Foxtel and Fox Sports in Australia, and a 62 per cent stake in ASX-listed REA Group, which operates the successful realestate.com.au website.
Read Paddy Manning’s full reports on the News Corp accounts at crikey.com.au
