Foxtel Smashed, Layoffs, Profit Slump, But News Corp Fails To Report Downturn
Foxtel who has dead iQ3 boxes piling up in Sydney warehouses, has reported an $11M loss for the quarter, they have also started laying off staff as competitors such as Fetch TV, Stan and Netflix strip share away from the pay TV Company.
It’s also been revealed that the killing off Presto has cost the Company $21M.
News Corporation who own 50% of Foxtel have today failed to mention the massive loss in the Australian Media section despite it being a major story about a content streaming Company. What they did report was that Fox Sports finished fiscal 2016 with increased revenues and record ratings driven by sports rights including NRL, AFL and V8 Supercars. The launch of a dedicated NRL channel in fiscal 2017 is expected to further strengthen ratings. Pay-TV provider Foxtel now has more than 2.9 million subscribers.
They not only failed to mention the Foxtel and Presto losses they also failed to mention that their all new iQ3 box which was rolled out to take on Netflix was a “lemon” with over 200,000 iQ3 boxes now lying idle in a Homebush warehouse.
Yesterday’s financial results also revealed that new CEO Peter Tonagh is desperately struggling to restructure the pay TV Company who for many years’ price gouged consumers with high priced content.
The loss included write-downs by News in the value of “finite-lived tangible assets” of the company.
“Foxtel’s strategy is to focus its resources on acquiring the best content from Australia and around the world, delivering an exceptional customer experience, and investing in great technology and products,” said Tonagh.
“To help achieve this strategy we have conducted a review of aspects of our business to ensure that Foxtel is as efficient and agile as possible. We have looked to simplify structures, clarify reporting lines, remove areas of duplication and overlap, and cease activities that do not assist in advancing our strategy.
“As a result of this review, we have determined that a number of structural changes need to be made in the business and this has resulted in some employees being informed this week that their positions will be made redundant.
“It is always difficult when friends and colleagues leave a business in this way. We are talking to all affected employees and where there are redeployment possibilities we will explore them, otherwise we will provide career transition advice and support.”
Mumbrella said that the news of the job cuts follows on from News Corp Australia seeking to make $40m in cuts from its Australia operation as advertising continues to shrink, with modest redundancies to form part of the cuts.