Foxtel under review as News Corp posts profit growth

News Corporation boss Robert Thomson has signalled the Rupert Murdoch-controlled media giant is edging closer to a float of its pay TV business Foxtel, attributing a rise in first quarter profits to the pay TV company and Dow Jones.

The Rupert Murdoch-controlled media company said its subscription services segment – which includes Foxtel – reported a 46 per cent increase in earnings [before interest, tax, depreciation and amortisation] for the first quarter, due to a $US24 million ($32.4 million) reduction in sports programming and production costs. Foxtel’s streaming products Kayo Sports and Binge now have about 2.1 million paid subscribers.

News Corp chief executive Robert Thomson says the company is undergoing a review of Foxtel. Credit:AP

“We are primed to capitalise on the patent success of the Foxtel streaming strategy, which was highlighted during the Foxtel Strategy Day, and are reviewing potential permutations to maximise shareholder value and growth,” Mr Thomson said.

As of September 30, Foxtel’s total closing paid subscribers were around 3.9 million. About 1.8 million were residential and commercial broadcast subscribers, while 2.1 million consisted of Kayo, Binge and Foxtel Now) subscribers.

Foxtel Group’s streaming revenues make up 19 per cent of total subscription revenues in the quarter, which increased $US14 million due to currency foreign fluctuations. Adjusted revenue was flat year-on-year.

News Corp revenue grew 18 per cent to $US2.5 billion ($3.4 billion) in the first quarter, while net income grew from $US47 million to $US267 million. EBITDA was $US410 million, up from $US268 million the year prior, driven by higher revenues, lower costs at Foxtel and a $US11 million positive impact from foreign currency fluctuations.

The growth was also helped by Dow Jones, which grew revenue and profit to its highest point since it was acquired by News Corp.

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