News Corp Australia has posted a $306.7 million loss for the first quarter as it continues to refinance the struggling pay TV business Foxtel, of which it has a 65 per cent stake in.
This is in sharp contrast to its $186 million positive first quarter posting this time last year.
Foxtel continues to be a sore spot for News Corp, who tipped in $300m in May this year to prop-up the ailing TV provider. At the same time, the ASX revealed Foxtel lost $417 million in the 2018 calendar year, excluding a $120 million tax benefit.
News Corp’s first-quarter results last Friday revealed its loans to Foxtel had increased to $700 million.
Overall, Foxtel debts top $2.3 billion, with News expected to reach an agreement with external lenders to restructure the payment schedule for the debts in the coming weeks.
The refinancing will include a package of bank refinancing, third party financing and additional shareholding funding.
Foxtel has continued to struggle under the proliferation of video-on-demand services like Netflix and Stan, especially considering they are cheaper deals than what Foxtel currently offers. However, subscription drops are slightly offset by growing membership of Foxtel Now and its sports partner Kayo.
And, last month Foxtel announced the launch of Foxtel First, a new tenure-based loyalty program in an effort to retain customers after churn rose to 14.4 per cent of subscribers compared to 12.9 per cent last year.
News Corp Mastheads also suffer
News Corp mastheads have also suffered fall in revenue in the first quarter, with advertising-revenue down five per cent compared to a year earlier.
Its Australian papers such as The Daily Telegraph, Herald Sun, The Australian and Courier Mail, were down 11 per cent.
However, while print readership is falling, digital subscriptions are on the rise with 542,000 subscribers at September 30 compared to 442,000 this time last year.