News Corp has warned the COVID-19 outbreak has “created significant volatility, uncertainty and economic disruption” for the media conglomerate.
In a statement issued to the US Securities Exchange Commission, News Corp outlined how the disease and relevant safety protocols has impacted the business so far.
The global halt of live sport has negatively impacted News’ sports streaming service Kayo, with economic uncertainty also believed to be harming the service.
Additionally, the closure of pubs, clubs and the majority of hotels through Australia has affected Foxtel subscriptions.
Conversely, News’ has experienced an increase in subscriptions to its news services around the world, in particular the Wall Street Journal, The Times and The Sunday Times, as well as digital audience gains at online versions of its news properties.
However, News still expects to see advertising and single-copy sales revenues decline as a result of COVID-19.
Both its digital real estate and book publishing businesses are also expected to fall into decline.
“The evolving and uncertain nature of this situation makes it challenging for management to estimate the future performance of the Company’s businesses, including the supply and demand for the Company’s products and services, its cash flows, its advertising revenues and the impact on rights payments, which are subject to negotiation,” News Corp said.
“However, the COVID-19 pandemic is expected to adversely affect the Company’s business and results of operations, as described above, and could have a material adverse impact on the Company’s business, results of operations and financial condition, particularly over the near to medium term.”
The statement also points to “cost-savings initiatives” that have been introduced throughout the business to offset revenue losses.
Last week it was revealed Foxtel has made 200 employees redundant with 140 staff members set to be stood down until the end of June.
“We need to be prepared for a scenario in sport where season starts are delayed further,” said Foxtel CEO Patrick Delaney.
“It is clear all codes are struggling with significant financial challenges and we should anticipate that the future shape of sport in Australia will be very different.”
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