News Corp has written down its investment in Foxtel, the Australian cable business it its jointly owns with Telsra, by $US227 million ($A289 million), mainly because of the falling value of its investment in the Ten Network.
Ten went into administration in June. Currently the free-to-air network has at least temporary support from shareholder guarantors, with a $30 million finance package available until the end of August.
Foxtel holds about 14% of Ten. And Lachlan Murdoch, the News Corp co-chairman, has 7.7% of Ten through his private company Illyria Pty.
A short time ago, News Corp shares were down 5.4% to $17.40 on the ASX.
In a quarterly earnings report, the US-based News Corp says Foxtel revenues for the year to June increased in US dollar terms by 1% to $US2.41 billion ($A3 billion).
However, in Australian dollars Foxtel revenue fell 2% because of lower subscriber numbers, mainly due to the closure of its online streaming unit Presto.
The 50/50 Foxtel and Seven West Media business Presto launched in 2015 and closed in January 2017.
Foxtel had 2.8 million subscribers at the end of June. Total subscribers improved slightly compared to the third quarter due to the launch of Foxtel Now, the 100%-owned replacement for Presto.
In the fourth quarter, cable and satellite churn was 13.3% compared to 14% in the prior year.
Foxtel’s net income declined to $US59 million ($A75 million), compared to $US180 million ($A229 million).
News Corp says Foxtel and Fox Sports Australia are capitalising on the growing streaming video on demand market with the recent rollout of its rebranded Foxtel Now streaming service.
“Fox Sports Australia reinforced its leadership in Australia with the successful launch of the Fox League Channel and by extending its domestic soccer rights for another six years,” it said.
News Corp’s revenue for the full year was $US8.14 billion ($A10.3 billion) compared to $8.29 billion($A10.5 billion) in the prior year.
Overall, News Corp posted a loss of $US643 million ($A819 million) compared with a profit last year of $US235 million ($A299 million).