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.
Sydney Morning Herald andThe 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 lifelineto 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.brisbanetimes.com.au/bu...e-sports-after-417m-loss-20190513-p51msx.html
