Money News Corp writes down Foxtel's value by $1 billion, shows signs of strength in real estate and subscription businesses

00:56  12 may  2018
00:56  12 may  2018 Source:   businessinsider.com.au

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News Corp has written down the value of Foxtel as it merges with Fox Sports. Digital real estate services were the standout performer in the third quarter.

Exec Suite Reps INT'L Esq Real Estate AFCI Global Directory. Patrick Delany. Ahead of the June merger, News Corp said it has written down the value of its Foxtel and Fox Sports investment by $ 1 billion .


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News Corporation has booked asset write-downs of more than $1 billion to account for the merger of its Foxtel and Fox Sports operations.

The update formed part of the company's trading results for the March quarter released this morning.

Net revenues for the quarter rose by 6% to $2.1 billion, but the write-downs say News Corp post a net loss for the quarter of $1.1 billion.

News Corp said the bulk of its non-cash impairments related a $998 million write-down for the Foxtel merger. The company flagged in March that a write-down would be forthcoming.

Prior to the merger, News Corp owned 100% of Fox Sports and half of Foxtel in a 50-50 arrangement with Telstra.

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News Corp will not only rely on Foxtel subscription revenue, but it is also Revenue across the business grew 6 per cent to $US2. 1 billion in the three months to the end of March, driven by strong growth in digital real estate services, which includes majority-owned REA Group, and book publishing.

News Corporation (“ News Corp ” or the “Company”) (NWS)(NWSA)(NWS.AX)(NWSLV.AX) today reported financial results for the three months ended March 31, 2018. well as the 7 million non-cash write - down of the carrying value of Foxtel in the quarter.

News Corp now owns 65% of the combined entity while Telstra owns the remaining 35%. The company also booked a non-cash impairment charge of $165 million on its investment in News America Marketing.

"As a result of lower-than-expected revenues from certain new products and broadcast subscribers at Foxtel, the Company revised its outlook which resulted in a reduction in expected future cash flows," News Corp said.

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The loss includes non-cash impairment charges and write - downs of $ 1 .2 billion . From the fourth quarter, the combination of digital real estate services and pay-TV businesses will account for more than Contacts News Corp Investor Relations Michael Florin 212-416-3363 mflorin@ newscorp .com.

News Corp and Telstra in March agreed to combine Foxtel and FOX SPORTS Australia, with the U. S . company holding a 65 percent Net loss available to stockholders widened to $ 1 .13 billion , or $ 1 .94 per share, due to charges of $ 1 .2 billion , largely related to write - downs following the deal with Telstra.

"Based on the revised projections, the Company concluded that the fair value of its investment in Foxtel declined below its carrying value."

Revenue in Australia declined 3%, the company said. For the company as a whole, "advertising revenues declined 3% compared to the prior year," News Corp said. "The decline was driven by weakness in the print advertising market, mainly in Australia and the U.S.".

In its cable division, revenue was up $7 million, or 6%, for the quarter compared to last year. News said this was mainly due to the impact from foreign currency fluctuations and higher affiliate revenues at FOX SPORTS Australia and Australian News Channel.

a screenshot of a map© Provided by Business Insider Inc However, EBITDA for the cable segment tumbled 53%, primarily due to costs associated with NRL rights and the launch of a new dedicated NRL channel.

News Corp CEO Robert Thomson said that looking ahead, the company was focused on its pay TV and real estate platforms.

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Sign in. News Corp had inked a deal with Australian media company Telstra Corp Ltd in March to merge Fox Sports Australia and Foxtel in order to create a combined company. News Corp added that its revenue at the unit, which includes real estate websites such as realtor.com and

Foxtel ' s subscriber numbers have fallen, along with the value of its investment in the embattled Ten Network, wiping out its profit for the Meanwhile, News Corp 's revenue rose five per cent to $US 1 .98 billion ($A2.7 billion ), helped by another strong performance by its real estate classifieds business .

"From the fourth quarter, the combination of digital real estate services and pay-TV businesses will account for more than half of our profits and significantly increase recurring subscription-based revenues," Thomson said.

Elsewhere, News Corp reported strong growth in its digital real estate services -- including the REA Group and realtor.com -- which reported revenue growth of 27%.

News Corp said circulation and subscription revenues rose by 7% in the quarter and free operating cash flow increased to $184 million, up from -$19 million at the same time last year.

The trading results reflect "strong growth in the Digital Real Estate Services and Book Publishing segments and a $70 million positive impact from foreign currency fluctuations", News Corp said.

"The growth was partially offset by lower print advertising and News America Marketing revenues at the News and Information Services segment."

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