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Thread: Foxtel signals price hike, cuts to 'non marquee' sports after $417m loss

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    Foxtel signals price hike, cuts to 'non marquee' sports after $417m loss

    Foxtel signals price hike, cuts to 'non marquee' sports after $417m loss

    By Colin Kruger, Jennifer Duke and Georgina Robinson

    The Age: May 13, 2019 — 4.16pm


    Foxtel has flagged a cut to its spending on "non-marquee sporting content" and another price rise for customers after its controlling shareholder News Corp revealed the pay TV provider made a financial loss of $417 million in 2018.

    News Corp was forced to disclose the information to the ASX Monday morning as it had provided the information to potential lenders as it seeks refinancing for Foxtel debt totalling $US1.68 billion.

    The document did not specify what non-marquee sports could be affected by the reduced spending. Foxtel was awarded a $30 million grant in 2017 by the Turnbull government with the aim of boosting women's, niche and emerging sports.

    Last year, the Sydney Morning Herald and The Age revealed that 12 sporting codes benefited from the first instalment of the ad-hoc grant during the 2017-18 financial year: AFL, soccer, rugby union, rugby league, cycling, lawn bowls, surfing, Ironman, surf lifesaving, cricket, basketball and hockey.

    A number of sports within those codes – such as the AFL's women's league – have run on free-to-air networks with much larger audiences.

    A News Corp spokesperson said: "We are proud of our commitment to supporting women in sport - both on air and on the field - and will continue to do so."

    Opposition communications spokesperson Michelle Rowland questioned the $30 million grant in a recent interview with this newspaper.

    Foxtel's appetite for sport has driven record deals for top tier sports, including a $1.2 billion deal with Seven West Media last year for broadcast rights to domestic cricket.

    Media industry sources believe rights to Super Rugby and Wallabies tests, which expire in 2020, and soccer's A-League competition, could be among the sports affected by Foxtel's move to rein in spending. A Rugby Australia spokesman said: "We are in the very early stages of constructive discussions with Foxtel."

    The ASX announcement revealed that Foxtel's lost, excluding a $120 million income tax benefit, $417 million in the 2018 calendar year.

    The company highlighted other potential opportunities to cut costs including reducing marketing spending and headcount reductions at ad-selling unit MCN.

    The document revealed that Foxtel management is also "reviewing the pricing of its various programming packages, including potential price increases for certain tiers."

    Foxtel last raised prices in September last year.

    Last week, it emerged News Corp, which owns 65 per cent of Foxtel, handed the pay TV subsidiary a $300 million lifeline to cover debts maturing in April. Telstra, which owns the remaining 35 per cent, did not put any money in.

    Earlier this year, Foxtel said it has total borrowings of $US1.68 billion. It had a $US211 million credit facility that expired on April 7, and $US744 million in debt falling due this year.

    News Corp's chief financial officer, Susan Panuccio, said on Friday News Corp continued to look at "numerous options to provide Foxtel with more financial flexibility and an optimal capital structure".

    The ASX document revealed subscription revenue continues to slide, down to $2.75 billion for the calendar year, compared to $2.87 billion for the year ending June 30.

    Advertising revenue has also been on a steady decline while programming costs have risen to more than $1.6 billion for the 2018 calendar year. Around half of this programming cost relates to sports rights and production of this content, it said.

    https://www.theage.com.au/business/c...13-p51msx.html

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    Well.... Hammer, nail, coffin?

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    Quote Originally Posted by Kiap View Post
    Foxtel has flagged a cut to its spending on "non-marquee sporting content" and another price rise for customers after its controlling shareholder News Corp revealed the pay TV provider made a financial loss of $417 million in 2018.
    Mmmm. That could refashion the ARU/RA's cash flow projections for 2020 and beyond.

    One hopes that Ms Castle will not develop a persecution complex over things starting with the letter "F".

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    Entirely expected. Apart from anything else this shows that David Smith and then NRL chair John Grant were pretty visionary in maintaining sole control of digital rights. Be interesting to see what happens with them and the AFL in the next deals. Unfortunately (for the game) the current "custodians" of Australian Rugby have ended up with little bargaining leverage.

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    Glad I got rid of Foxtel

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    Champion SPaRTAN's Avatar
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    Media industry sources believe rights to Super Rugby and Wallabies tests, which expire in 2020, and soccer's A-League competition, could be among the sports affected by Foxtel's move to rein in spending. A Rugby Australia spokesman said: "We are in the very early stages of constructive discussions with Foxtel
    Could they be any more f#$ked?

    Couldn't have happened to a nicer bunch of people

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    Quote Originally Posted by SPaRTAN View Post
    Could they be any more f#$ked?

    Couldn't have happened to a nicer bunch of people
    Calling them people is very kind.

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    Yep, that’s the hammer blow right there. Bet there will be a lot more players following Adam Coleman and Curtis Rona to the NH from 2020. If I was managing a player I’d be pulling out all the stops to get them there ahead of the rush.

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    And I simply cannot believe that RA is “in the very early stages of discussions”. If it is, then WTF have they been doing until now?? The current broadcast deal runs out in just 18 months’ time and SANZAAR need to sort out scheduling, flights accommodate etc pretty damn soon if Super Rugby is to survive past season 2020.

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    Of course adervtising revenue is going to be down when people are quitting your product in droves. I remember when we first got Foxtel in 2000 and there were the only ad's were for other programming on Foxtel. A price rise isn't going to go down well with remaining subscribers especially with the continued rise of Netflix, Stan and Amazon Prime.

    Disney Plus launches in the US in November and it will only be a matter of time until it becomes available in Australia and with the range of content Disney now has access to through it's various buy outs and take overs is massive.

    Sport is the only thing keeping Foxtel in the game.

    Rugby Union rates worse than the Test pattern at the moment and the last major increase in the TV rights came from the UK. With Foxtel cost cutting it paints a very bleak picture for Rugby Australia.

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    Quote Originally Posted by shasta View Post
    Entirely expected. Apart from anything else this shows that David Smith and then NRL chair John Grant were pretty visionary in maintaining sole control of digital rights. Be interesting to see what happens with them and the AFL in the next deals. Unfortunately (for the game) the current "custodians" of Australian Rugby have ended up with little bargaining leverage.
    I;ve just read that the AFL met with a couple of people from Amazon Prime last week.

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    Last edited by jargan83; 14-05-19 at 11:21.

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    News Corp revealed 2.4 million Australians own a Foxtel broadcast and commercial subscriptions, which was down from 2.5 million in the previous quarter. Newly launched Kayo Sports had 209,000 paying subscribers as of May 8, while Foxtel Now had 505,000 paying subscribers.
    I wonder what the total subscribers for Foxtel would have looked like 10 years ago, even 5 years ago before streaming started to get big in Australia.

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    Quote Originally Posted by jargan83 View Post
    I wonder what the total subscribers for Foxtel would have looked like 10 years ago, even 5 years ago before streaming started to get big in Australia.
    or 8 years ago when rugby was worth watching.......

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    C'mon the

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    Quote Originally Posted by shasta View Post
    Apart from anything else this shows that David Smith and then NRL chair John Grant were pretty visionary in maintaining sole control of digital rights.
    Pretty sure they were advised to keep their digital rights but decided to bundle it all together in the then traditional way! Leather patches brigade vs the progressives!

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    I will be cutting foxtel as soon as game of thrones finishes next Monday. There will probably be a lot of others.

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