Rupert Murdoch Gives Up Bonus, News Corp Loses $1B

News Corp said revenue declined 7.8% in its latest quarter as strong digital gains at Wall Street Journal parent Dow Jones were offset by weakness at its foreign-news and entertainment operations.

The New York-based media company, which also owns HarperCollins Publishers and many newspapers in the U.K. and Australia, swung to a loss of $730 million from a profit of $10 million a year earlier. Results were dragged down by $1.13 billion in impairment and restructuring charges primarily tied to its pay-TV service in Australia and a coupon company that has been sold.

Revenue fell to $2.27 billion from $2.46 billion for the quarter ended March 31. The slide stemmed in part from the depreciation of the Australian dollar and British pound against the U.S. dollar, a weak print-advertising market and lower subscription revenue at Foxtel, its Australian pay-TV service. The coronavirus pandemic weighed on results in the latter part of the quarter.

Robert Thomson

“We are operating in a different, difficult time,” said Chief Executive Robert Thomson. He said that despite the onset of the coronavirus and adverse currency movements, profitability was relatively stable at the company, thanks primarily to significant digital-advertising and subscriber growth at Dow Jones, whose properties include the Journal, Barron’s and MarketWatch.

Earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 2% to $242 million.

News Corp said the Journal experienced a sharp increase in subscriptions since the start of the pandemic. In the past week, the Journal reached approximately 3 million total subscribers, a record—over 2.2 million of which were digital-only subscribers.

As the impact of the coronavirus pandemic deepened, News Corp laid off hundreds of staffers in Australia and the U.S., including at News Corp headquarters in New York; at the New York Post; and at Move Inc., the operator of realtor.com, according to a News Corp spokesman.

Rupert Murdoch

Thomson said the crisis was also affecting executive compensation. He said he would forgo 75% of his cash bonus for the current fiscal year, and that Executive Chairman Rupert Murdoch would forgo his entire cash bonus. The bonuses of other senior executives will be reduced by at least 20%, and the board is reducing its cash compensation, Mr. Thomson said.

News Corp’s largest unit, the news and information-services business that includes Journal parent Dow Jones, the Times of London and New York Post, reported a 7.7% decline in revenue to $1.13 billion, reflecting a $25 million, or 2%, negative impact from foreign-currency fluctuations.

Advertising revenue for the news unit declined 14%, while circulation and subscription revenue rose 1% overall. At Dow Jones, circulation revenue was boosted in part by a 20% increase in digital subscribers, as well as subscription-price increases. Dow Jones’s advertising revenue fell 2% in the quarter due to an 18% decline in print advertising, which was partially offset by a 25% growth in digital advertising.