News Corp’s job cuts cast a shadow over the future of its newspapers
Denis Muller, Senior Research Fellow, Centre for Advancing Journalism, The University of Melbourne News Corporation is cutting its staff by 5% globally, including in Australia, after its news media division recorded a second-quarter earnings decline of 47%. The decision inevitably reopens questions about the future of the company’s newspapers, particularly once Rupert Murdoch is gone. The company’s chief executive officer, Robert Thomson, said a surge in interest rates and inflation caused the earnings decline, and that these effects were “more ephemeral than eternal”. However, structural complications in the corporation suggest these “ephemeral” factors are only part of the problem. “Eternal” factors – such an interesting word where Murdoch is concerned – include the performance of the tabloid newspapers that have played a pivotal role in the development of the organisation. It casts a large shadow over the organisation’s future direction and structure. A glimpse of this has emerged since the public became aware in October 2022 of a proposal to reunite News Corp, which is the newspaper division of the empire, with Fox Corp, which focuses on television and streaming services. The two were split in 2013 to quarantine Fox from the taint of scandal arising from the phone-hacking in the UK, perpetrated by News International, a subsidiary of News Corp. The reunification proposal ran into strong resistance from the market for two reasons. First, there were misgivings among shareholders in News Corp about the business merits of Fox Corp, and vice-versa. Second, there were lingering reputational concerns hanging over from the hacking scandal. In January 2023 it was announced that reunification would not proceed, at least for now. As if to reinforce the relative strengths and weaknesses of the News and Fox divisions, in the same quarter that the newspapers showed such a dramatic earnings decline, Foxtel Group’s subscriber base grew 10%, and the subscriber […]