Q3 2020 Earnings Call
[music].
[laughter] welcome to the news Corp's recount fiscal 2020 conference call. This conference it's being recorded.
Will be on a list and only basic at this time I would like to turn the conference over to make Florence Senior Vice President and head of Investor Relations. Please go ahead.
Thank you very much Chloe Hello, everyone and welcome to news course fiscal third quarter 2020 earnings call.
You are especially for about a a half an hour ago as now posted on our website at news Corp Dot com.
<unk>, Robert Thompson Chief Executive.
<unk> Chief Financial Officer.
Although it's I'm prepared remarks, and then we'll be happy to take questions from the investment community.
This call May include certain forward looking information with respect to newspapers business strategy actually sounds good different materially from what is said.
Newscorp's form 10, K.N. form 10, Q. filings identify risks and uncertainties that could cause <unk> and contained caution statements regarding forward looking information. Additionally, this call include certain non got financial measurements, such as total segment here, but.
Adjusted segment and adjusted D.B.S., the definitions and gap to Nongaap reconciliation to have such measures can be valid in our earnings release.
<unk> I'll pass over to Robert Thompson for some opening comments.
<unk>.
We are up riding in a different difficult time. So this will be a rather different distant experience.
Before the business of the day I sincerely hope that old on this cool each about investor's business partners and their families a safe during this exacting era.
Every business and families facing challenges and out thoughts in particular.
Those who are suffering under the <unk> 19.
I'd have had to deal with complications from this dreaded disease.
For our company the safety of our employees has obviously been Paramount and many about Jello's took displayed much courage in recent months.
Including reporting from <unk>.
During the intense first phase of watch has become a pandemic.
I would also like to on and Anthony Cozy, who passed at a relatively young age by which time he had already become a legendary sports photographer for the neo pets.
As noted in a I.K. filing with the S.C.C. last month, we expected abroad impact on a business from depend demicks inevitable economic consequences. We were affected somewhat in Q3, <unk> effects will likely be significantly more pronounced into fourth quarter.
As we expect these impact to continue in India to significant cost reduction sipping implemented across the company and additional steps would we take it in coming months. These cuts are designed to deal with the short term exists agencies and to reposition the company for low to growth.
Will obviously be an impact on executive compensation.
For many senior executives bonuses or the largest component of that cash compensation.
This will be produced by at least 20%.
Cats will be led by our executive Chairman, Rupert Murdoch, whose voluntarily full going he's entire cash bonus for the current fiscal year.
Does chief Executive I would forgo 75 per cent of my annual cash bonus. In addition, a board of directors have decided to reduce their cash compensation.
These significant cost reductions of all kinds across the company clearly have a positive impact on out titles segment, EBIT done and cash position and help mitigate some of the effects of the pandemic. We obviously leave open the possibility of further compensation cuts next fiscal year, depending on the.
Ongoing impact of the crisis.
Training now to the third quarter results for fiscal year 2020, Oh revenues declined died percent to $2.3 billion, including I. 78 million dollar or 3% impact from adverse currency movements total segment EBIT die was down although only 2% to $242 million.
It is worth highlighting that operationally adjusting for currencies acquisitions and disposals and other items mentioned you know release, a adjusted revenues would down 4%, but now adjusted total segment EBIT rose 1%.
Reported results also include a 1.1 billion dollar non cash right down mostly attributable to Fox, though.
I've been using information service to segment the sale of News America marketing has formally close.
This is a significant step in terms of enhancing shareholder value and part of the continuing simplification about company.
<unk> evaluation about assets continues and ice strategic review about community and regional pipe regional newspapers in Australia is advanced stage.
Yeah also reviewing ways to improve transparency now segment disclosure, which will enable investors to better appreciate the inherent value in and the gross potential of Dow Jones, which we believe is the best business News and analysis brand in the world.
We are working towards making that companies potential more obvious enter highlighting his various strengths are certainly relative to other business wrap brands and for example to the New York Times.
Speaking of demand for premium content as you know we have entered into valuable partnerships with Apple unfaithful for use about world class journalism.
Clearly there a hobby and Jews are positive change with Google, whether <unk> has shine a more enlightened just socially empathetic attitude to journalism.
In the past some in Silicon valley, so to create a system of petty patronage through photos philanthropic handouts and sententious solves seemingly design just to institutionalize A. mendicant media.
Enlightened executives at Google tightly seek more meaningful changes to a dysfunctional ecosystem.
The terms of trade into digital World I certainly changed.
The regulatory pressure is also intensifying as two weeks ago. The a strain government announced the introduction of it mandatory code that would require the larger digital companies to pay for content and <unk> to adjust their algorithms to get additional weight to original news. It is absolutely crucial that more be understood about the character the power.
Hello.
<unk> the potential manipulation of algorithms and data.
Are you recent Wall Street Journal report on Amazon's business practices showed the potential danger of companies, having a dominant horizontal marketplace.
Selling to an animal products in segment verticals in essence.
Exploiting proprietary marketplace digest, and competing with and potentially under mining they clients.
Into the courtroom news and information services improved unprofitability for the second stripe caught up with 15% growth in segments <unk>.
Dow Jones recorded particularly strong performance as usual paid subscriptions Raj, 20% year on year, two more than 2.5 million average dotty subs at quarter in.
The Wall Street Journal digital paid jobs were up 15% to more than 2 million also record.
In recent days digital has shown further acceleration with total subscriptions, reaching approximately 3 million for the first time, including 2.2 million digital.
Several at the end of April digital subscriptions rose above 20% year on year.
Casual advertising at Dow Jones rose, 25% year over year. Despite the challenges we face with AD sales lighter in March.
Is in strikingly marked contrast to the performance of the New York Times, where digital AD revenue actually declined I percent I should repeat those because for the purpose of clarity.
Digital advertising rose, 25% downturns and it fell I'd present at the New York Times.
<unk> contribution improved and was a significant contributors segment EBIT dog gross while he bit dust slumped, 15% up in New York Times.
[noise], we announced earlier this week that the head of the Barons Grubelich <unk> will replace will lose as c. or from the bit look this month.
We will certainly leaves Dow Jones in fine federal and with enormous capacity for future growth.
Speaking of parents subscriptions, <unk>, 14% <unk> and over the past four years under Elma US leadership, the digital audience at parents group brands has good dribbled.
During the caught up the Wall Street Journal Digital Network <unk> Records and hit 196 million unique uses in much up 155% versus the <unk>.
Traffic was particularly strong at market watching much when he uses more than tripled to 90 million compared to the pry Ya.
The professional information business reporter day, 5% increase in revenues with risk in compliance once again, demonstrating spring rising 18% <unk>.
Elsewhere in the segment newspaper digital subscriptions that news <unk> idea, we're up 24% year over year rising to more than 613000, a quarter and with two thirds of subscriptions at the Australian now digital.
News U.K. the Sun reached 164 million global unique visitors in much representing a 17% increase over December according to Google analytics, well at the times and Sunday Times digital subscriptions grew 21% you're of the year, two or 345000 and now account for nearly.
60% of the base.
Meanwhile, the new old posts advertising revenues and the <unk>, 19% and the post digital network had 169 million average monthly unique visitors. According to Google analytics up from 170 million in Q. too.
[noise] turning out a book publishing revenue declines moderated Harper Collins in the courtroom compared to the first off well segment EBIT dog group year over year, despite very typical comparisons.
As more people have moved to work and study from home we've seen a revival in <unk>. We are particularly pleased with early styles with Joanna gains Magnolia type of volume two which already sits atop the U.S. bestseller lists.
Digital real estate was showing sold in progress through January and February but began experiencing pandemic related declines in March.
<unk> realtor dot com will depend on the <unk> of the Castrillon and U.S. economies, but traffic to both sides remains encouraging unreal to dot com is outperforming the traffic trends of its house flipping competitor. According to the March home School data.
[noise] industry pollution video services segment tires descriptions rose to 444000 in Q3, including trust, which was more than double <unk> and <unk> also showed strong growth over the <unk> caught up.
That figure has obviously been adversely affected in recent weeks by the suspension of sports in Australia, as we disclosed in the evenings release.
We are in serious negotiations with.
The major sports over a fundamental reset abroad costs, Susan we'll discuss the possible accounting impacts shortly.
In coming weeks, we plan to launch a entertainment streaming product and expect that there will be strong demand given the power of a media pull fathers mocking platform and the nicest amount in Australia.
Roles are very excited by the multi year deal with Warner Media announced this week that <unk> will be the exclusive home in Australia for <unk>, Max and other want a media hits.
Let me now tune to lingering Impactive, <unk>, which began to have an effect towards third quarters, and but clearly will be a major factor you know queue for results as we signaled <unk> eight k. falling last month.
I would first like to commend L. leaders and now employs around the globe as we rapidly unsuccessfully moved approximately 90% about workforce around 25000 people into I work from in home environment.
Looking at the longer term, we have cleared plans for addressing the immediate challenges, we face and for emerging vigorously on the other side of this crisis.
This will not be done by random crosscutting by by strategic decisions about the business, we need to fashion for a profitable future.
That strategies informed by I candid assessment about capabilities and deficiencies and a clear sense that the business environment will be very different when the world finally returns to the new no.
It is worth noting that this crucial <unk>.
Newschool continues to have a strong balance sheet.
31st we have $1.4 billion in cash and cash equivalents and in addition, we have access to I 750 million dollar corporate revolving credit facility, which remains on rule.
Bedrock of financial stability will help us with the category five storm as will the power of our brands and the energy and the creativity about people.
The headwinds will buffer the company in the short to but I'm extremely positive about our prospects for delivering long term gross and increasing shareholder value now.
Particulars on that results in his quota I tend to Susan pundit Ya.
Thank you about that.
Tending to the financial physical Twentytwenty third quarter potential renting Easter approximately $2.3 million down <unk> eat the top with <unk> $42 million <unk>.
Parents, he had wings negatively impacted ranting, he's intentional segment, 8.3% and 6% accurately.
Oh, you trusted basis, which excludes the impact of applications that has to choose and currency fluctuations <unk>, but I think he's helpful percent and title segment eight the dot increased 1%.
<unk> had lots of to share with $1.24 as compared to any to share too sensitive to pry here, but nothing cleats $1.1 billion no cashing payment charges, primarily in relation to Iraq had goodwill intangible assets <unk> and the reclassification if he's America marketing tacit held for sale.
[noise] adjusted adding <unk>.
Before going into the <unk> comments on the Cape at 1910 can't make which is expected to have a significant impact on me 10 uprising results.
Immediate cost actions are underway variable costs have obviously paid richie straight to heighten focus on the reduction of discretionary spending and non essential <unk> together with a fairer if you had cat reclining.
We are accelerating plants reduced costs across the business in the medium can't particularly.
<unk> sets a segment.
These initiatives include but are not limited to global shit services to centralize out back office functions.
Her of you that property in office footprints and reviewing up printing operations around Niccolite.
We have already announced the printing suspension of 60 communities <unk>.
Finally in relation to company wide for cricket T. anything taught him Tonight I only kinetic spacious we have alright hat no 100%.
<unk> and <unk>.
And these and non <unk>, we are not anticipating any covenant issues at Fox tell it for the next 12 month and we have night plans to provide any additional shareholder funding.
But that as a backdrop I will now discussed the quarterly results <unk> uprising segments.
Intonation set so it's rather used to the call to where I for $1.1 billion down, 8%, Texas to pry yet.
Just a dice it's revenues declined 5%.
Advertising revenue, how 14% decline nice nice Shipley at needs American marketing <unk>, My second I shouldn't subscription Rafiki green, 1%.
I haven't seen negatively impacted segment revenues by 2%.
<unk> also impacted by $14 million from the outbreak of case at 19.
Digital revenues attach I into the newspaper enough Ted's represented 42% <unk> up from 56% in the pry yeah.
<unk> $75 million, 15% from $65 million in the <unk> benefiting from increase contributions attach items improvements at the New York heist and the absence of losses from honorably, partially offset by level contribution from that.
[laughter] <unk> healthy, 4%, reflecting at 20% correcting digital paid subscribers across <unk> products, including a 50% crisis digital I only pipes describe as strict channel.
Hi, she'll go straight channel subscribe to succeed to 2.8 million in the court, 8% increase in the <unk>, which is an acceleration from the second court is quite trite.
[noise] professional intonation business racing is accounted for 29% <unk> growing five set $214 million, reflecting and I think tank cry thing risking compliance revenue.
Advertising revenues attach <unk> <unk> <unk>, so a shot acceleration in digital at the <unk>, Hi, stink, 25% <unk> digital advertising represented 47% attach I advertising ready.
<unk> had revenue Christ at 5% and another caught up positive contribution.
Doc Rice.
Elsewhere advertising revenues that knew she case l., 10% on a report it faces an 817 local currency we kept in the past two courses despite strengthening digital.
Trends that needs is trying to have remained very challenging we'd advertising I think he's got 20% on the report it faces and 30% data.
And see.
Finally at news American marketing revenue self 16%.
Tending to this it's it shouldn't be D. I say this is sickening revenues for the cost that were $462 million down 14%. This is $539 million in the <unk> without seven dissenting local currency.
The revenue decline was primarily chicken by law broadcast subscribe to broadcast subscribed the trends were relatively similar to the <unk>, we kind of at 19 restrictions in Australia coming into place in the last week at the course huh.
Tell all say hi, slow at the typing revenues reflect teeth, I think I for all T.V. marketplace.
Segment EBIT during the quarter with $68 million status says he wants to send from the <unk> driven by the revenue decline, partially offset by renegotiated license phase and the timing of sports rights and the production cost you to kind of that 19 related suspension.
Costs, the down 11 said trying to report it basis.
[noise] Foxtels closing paid subscribed the dice with approximately 2.93 million as if not Stacy fits reflecting a 1% <unk> driven by K.I. subscribers.
<unk> title subscribed the dice with including try less increase to 444500 99000 last year.
Fact, we reached I have a 470000 title K. I subscribe is by March 22nd stops at the winter sports season.
Scrivens have declined in recent weeks with the suspension of the N.R. out an I.F.L. seasons, as well as rugby nicer sports and other international Sporting case, but the N.B.I.
<unk> view is remained highly engage during the course <unk> and we expect an uptick unsubscribe is clearly depend on the quality and quantity of in our Allen I have held games once I appreciate.
As my second they want more than 272000 pain K. I subscribe.
[noise] whipping beta testing Fox Health, New trial run Entertainment string service and we expect to launch can actually in the coming lakes and we're very pleased to announce the Wanna media deal to support from launch.
In the third caught up broadcast chatting priest assess timing almost too used to 17.5%, which was 20 paces point flower. This is the <unk> broadcasts topic remained relatively stable at 79 Australian dollars.
No publishing Harper Collins had a strong quarter with revenues statute descent $412 million and segment <unk>, 4% $65 million to <unk> very tough comparison against <unk>, which had segment eight potok right of 20 not descent.
<unk>.
Moments in general books children's any in the UK digital <unk>, 23% of consumer revenue, which included improvements in downloadable 40 I books.
At the digital real estate services segment revenues decrease fault sent to $261 million to to the negative impacts from foreign currency fluctuations on an adjusted basis revenues were flat.
My name die raise 1% $74 million or 9% on an adjusted basis.
Already I agree Griffin, you spell, 5% how's that without the 12 million dollar foreign currency impact Ari I agree modestly in local currency.
This is an improvement from the first half performance benefiting from renewed crossing financial services.
Straying listing volume declines motor write it down 7%, which reflects need single teach a crisis in metro Melbourne and Sydney.
Oh, faisel strong traffic metrics, achieving record levels can visits and audience during the course huh.
However, kind of at 19 realize that government policies and restrictions, including bands on Hyping Hynek inspections and interesting options have led to reduce listing volumes in recent weeks in response to the impacts turn the pandemic area has implemented a number of relief packages to support its customers, including short 10 pricing concessions and changes to listing product to provide.
Crisis flexibility for customers.
Please refer to our <unk> and the conference call immediately following these coal from all day child.
[noise] leave revenues declined to sent to $180 million with real estate revenues relatively flat.
Traffic remains strong with unique using the caught up six to send to 68 million.
<unk>, if it's 19 tend to make me it was on a <unk> January and February weeding prescribing traffic and leads Amazon pasted to leave a strong second half refugees. However, I did not similar to Ari I and other digital real estate portal studies <unk>.
In response to the pandemic real tough institution, they lean relief and you should T.V. light not treats customers, which was subsequently extended in Tonight with some modification to the <unk>. The initiative together with other kinds of at 19 related impacts rich you stayed quarter revenues by an estimated $6 million.
I would now like to talk about some of the same in the upcoming course huh forecasting has been challenging so I will discuss what we have seen in April and framed their elephant risks.
At news and information services, we expect advertising and single copy sale revenues in the segment to be at definitely affected as a result of widespread business clashes and social distancing meshes.
<unk> advertising revenues, excluding use American <unk> represented approximately 34% of segment revenues in the course huh.
<unk> advertising revenues that dad Giants was down more than 20% with digital down modestly.
Tizing revenues at a stray and the U.K. with animals and 45% on a report it basis or around 40% in local currency.
As I mentioned earlier, we are taking aggressive cost action to mitigate these revenue declines within the segment at the same time. We have also I continue to say strong right in digital subscribe as across the key properties. The night cool, including I have a 20% year on year <unk> digital only subscribe is at the Wall Street channel.
Innocent caught up approximately 75% <unk> with subscription based providing much more visibility and stability digital revenues accounted for 68% of <unk> and digital paid subscribers accounted for 73% at the Wall Street Journal subscribed the dice.
In subscription video services, we anticipate an increasing broadcast Chen with the suspension of the N.R. out an I.S.L. seasons for April April cost Chan has been fairly stable, although we have seen lower sports t. at K. I subscribe as as you would expect.
Clashes of pubs and clubs and low occupancy at hotels throughout Australia are also expected to adversely impact commercial subscription revenues together with a downturn in advertising revenue.
<unk> has implemented several initiatives, including tightening up additional entertainment content to whole subscribers and providing folks tell broad band customers with unlimited thanks for allowances for streaming.
That's the sport tried to counting Fox, how amortizes event by sports like Formula, One, which have no dedicated channels upon their parents at the event.
Consequently, the <unk> included about 9 million U.S. dollars off that would just to do two events catsuit Oprah spines.
Channel by sport tried such as the I.F.L. and our L. and domestic cricket are expensive on a straight line by society Yeah.
The third quarter included a full amount that's right <unk> three at those sports in the event that the N.R.L. an I.S.L. do not Richoux next season in the fourth quarter, We would plan to just said ice cough until the sports regime.
All the sports dice contracts have different terms and conditions and we are currently in discussions with the lakes around the best way to move forward and to value the seasons that remains.
As a frame what the culturally costs between the I.F.L. an arrow prior to the suspensions when 95 million Australian dollars or approximately 60 million U.S. dollars.
In addition, we also expect in approximately 10 million dollar impact on the accelerated entertainment advertise action in the full Porsche.
Info publishing as the retail market adjusted to stay at home restrictions by closing a number of bricks and mortar stalls hop, calling so strong pricing on line styles with <unk>.
<unk> and as well, but mentioned what about top books for the Joanna gains Magnolia type of volume to selling very well.
[noise] digital real estate services as <unk>, Ari I anticipate to challenging listing environment, given the government social distancing meshes with April you buy listings falling Stacy, 3% real trees facing lower real estate transactions Encouragingly lead volume and unique uses have shown improvement in recent weeks.
By companies have taken <unk> to extend credit to their respective customers discount. So other similar measures, which will have an actress impact on revenues.
<unk> is expected to come down significantly to around $475 million compared to $572 million last year, which includes a 35% to 40% decline at Fox tell an update on our initial guidance up approximately 20% year on year reduction.
Finally, a word about our tax right.
Panel perspective, we expect an unusually high tax write for the for <unk> operating losses in foreign jurisdictions that we are unable to take deductions against these are paying all impacts not a cash impact.
As I mentioned these are unique times, but we believe without strong liquidity condition mock leading brands emphasis on digital transformation as well as a more aggressive fight this phone call smashes east Kobe, well positioned to whether the <unk> <unk>.
With that let me handed over to the operation for Q. and I.
Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure you mean function as turned off the line, you're saying not to reach our equipment.
Again press start one to ask a question well past, there's just a moment tell everyone an opportunity to signal for questions. Thank you.
Well take our first question time electronic what Johnnie from G.P. Mayan.
Oh, Thank you very much I can you elaborate on that string.
Advertising highlighted.
Quarter Wall Street Journal sounded like in.
The little bad, but still seems like it's coming and probably.
I'm wondering why.
[laughter] articles that continued to be striking or your product.
And then just a follow up on the make up a strong growth digital subscriber.
National domestic anything different.
The younger are they pretty much just mark.
Oh Wow.
[noise] Oh effects, let's yoga in terms of Ooh this subscribers or obviously, we have had strong growth and U.S. subscriptions and I think the thing to remember about Wall Street Journal subscriptions is once you have a subscriber you also have an opportunity to upset.
So which includes saying growth for example in subscriptions coming from uncle wants to the journal <unk> watched two bedrooms and as well as that from the journal do better and then for the more specialist Wall Street Journal subscribers, there's an opportunity to sell them 12 sell them to out premium business.
Well, that's what you obviously have a high yield in terms of advertising clearly traffic is being particularly strong.
There has been as you may well be aware of some concerns early in the code. The cross is about.
Blocking of ads related to coded crosses coverage.
Gradually that's a problem has diminished and so we all noticing that.
The amount of advertising way getting is matching not quite but to some extent the significant increases in traffic we've heard across the wall Street Journal and Marketwatch. We notice a tick advertising is increased the custom advertising is is also on the raw was a friend to a certain extent progress.
<unk> grunting from business quite frankly, it's an extraordinary opportunity because big clients are coming straight to the wall Street journal onto other publishing houses around the world and they want to deal directly with the <unk> rather than the necessarily through an advertising agency.
Well. This is at the moment of short term for <unk>. There are indications that this may very well become a long term Trent.
I think like C.D. on the other thing that I would add to that is the other placing thing that we're seeing as the average age.
So we did have an average age of around 60, and it's an hour around 47.
<unk>.
Wow.
If I can further called Susan by saying that what we've noticed for example of a Wall Street Journal leaders Apple News gloss is that historically been shall we started disproportionate number of men reading the Wall Street journal right around 75% mild 25% female.
Just a this long island the readership of the Wall Street Journal on the.
The couple news plus.
So it is <unk> majority women minority man.
Thank you Alexia call able to pick on X. question. Please [noise].
Absolutely.
The next question comes from.
And shall right costs keep from could you. Please. Please go ahead.
Oh hog all the heart so.
For me just one.
Makes you Miss bolts rods deal that you've given that's a good five work on what happens on on the spices, but just interested with you sleepy.
<unk> sportsblog skills longer yeah. If you think they can't get used to be 80, lumberton deciding you I'll make you think that's that's warranted given some of the family <unk> interested you. So <unk> on that issue and secondly, you happen to quantify.
Potential impact.
<unk>.
<unk> keep cool <unk> and cute big without <unk>, you too bye bye bye. Thank you.
[noise] ensure the first of all on sports rugby obviously, it's inappropriate to go into detail at this stage, but the obviously needs to be a fundamental research. The idea that things will suddenly returned to normal this season or is absurd. It's not just the quantity of games. It's the quality of the experience and that has obviously been done.
Finished and that research has to apply longer term <unk>.
In essence, there is when you reset reality.
And ensure interest in relation to your question on me, we haven't given that the key for but well I can say if we implemented the nation is I'm a 19th March in relation to me and the impact of Fat <unk> three with 6 million. So you can use that as a proxy feel run right and we haven't made any announcement as to any further extension in nice yet.
Thank you and show.
They're going to ask questions. Please.
Absolutely.
The next question comes from Greg Hubert from Hieber Research partners.
Oh, Thank you high on the newspaper side in Australia, I'm I'm a cost cutting inside.
He's not been written out there.
About your newspapers some of them down there shutting down the hard copy version and go into two only and stuff can you just.
Talk a little bit further about that and it's just.
What percentage of your.
Print subs down there would have you have shut down there on my normally it's as a business model. For example, my more because I mean, just like only 10 15, 20% of the subs down there I mean, how significant as it was my first question.
My second question is I guess I'll newspaper side as well just generally.
Do you think you have a lot more costs you can take out of the U.S. for.
<unk> give a lot more costs you can take out in reaction to this virus situation. Thank you.
Oh the contact the second question first Craig, but <unk> constantly reviewing cause and that those costs and headquarters where the <unk> significant reductions in recent days.
<unk>, we're looking for efficiencies in text then we're looking for the efficiencies that come from the close the coordination that the <unk> been under way in in recent years, it's not a new phenomenon, but it gives us an opportunity to look across businesses very very closely measure different costs levels and and respond appropriately what we're not going to do.
It was cut costs in a way that undermines the editorial integrity of the looting news organization in the world.
And <unk> just in relation to the Mafia studying Australia to the mountains that with these printing it the Lyman like community enough tips, which you know subscription relations today advertising relation products and as well, but mentioned we are to taking a detail strategic you with the entire regional community <unk> data in Australia. So the regional.
<unk>, we'll have stopped attached to them.
Jeez I think just a supplement on the costs side, I mean I agree <unk>.
Point, but we do believe that across full out businesses on a global scale, particularly when we think about out backup functions that we do have some significant opportunities that we can walk we has been actively working on nice nations I for the call for the law 12 mom, particularly looking at tech, but we do believe that days a lot more opportunities we can do with.
Gold in the Sky as meaningful thank you agree on what they're going to ask questions. Please.
<unk>.
Absolutely and as a reminder, participants you may pressed star one to ask a question.
Our next question comes from Brian Hung from morning Star.
[laughter].
Oh that.
The the current environment to help simplification program, but Gee, that's going for news coop and what does it make it any more complicated especially for.
[noise] sales and also Susan <unk> taken it looks so.
What's that more driven by changes assumptions related to the.
<unk> okay.
[laughter] and folks till now okay.
[noise] O'bryan clearly the certification was a preexisting program, but to a certain extent you might well be correct in the various things are big expedited Ah. During this period of crosses what what I would like to say specifically around simplification is that.
Where we are pleased that the nah I'm transaction has progressed.
Actually we had to fight the Charlesbank, who have a preexisting specialist expertise in in that area will be able to make a six new because the success of the business.
Can tell from the 10 or about quantum comments about Australia that there is obviously a strategic review about print holding as well under way. So a simplification processes stuff unfinished as part of that is that when they came to her a lot the value inherent in for example to John is a wizard of Oz reported last week.
Area numbers to those of the New York Times about who's figures are not fully albeit it's in the current news and information services segment.
If you you think of the journey in recent years, but this out with amplify the early style of the local media group It <unk> and all the other started religion.
Position of real to the person's Apollo when we are a rather different more specialized company than we were a few years ago.
And try and just in relation to your question on Fox, telling me and payment Yeah. We do look at these from it takes you have to stick to the middle sexual knock at multiple perspective, and clearly they named Pat That's that's definitely affected at trends, resulting in low expected fulltime sizes and the impact of <unk> to have clean out to see.
Well at the time advertising I take take customers that unconventional subscription revenues in the need 10. So when we combine all dies, we thought it was appropriate to take any payment.
Okay.
That's a a call your are there any more questions.
There are no further questions at this time and I'd like to turn the conference back over to you think you.
Right well. Thank you <unk>. Thank you for all participating how great day, and most importantly, say say what time do so.
[laughter].
[noise] <unk>. Thank you for your participation human I disconnect.
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Good day and welcome to the news Corp's <unk> fiscal 2020 conference call Today's conference is being recorded.
Well the analyst and only basis at this time I would like to turn the conference over to Mike Florin Senior Vice President and head of Investor Relations. Please go ahead.
Thank you very much Chloe Hello, everyone and welcome to news Corp's fiscal third quarter 2020 earnings call Where's Your earnings press release about half an hour ago has now posted on our website at news Corp Dot com.
The goal to Robert Thompson, Chief Executive and Susan <unk> Cho Chief Financial Officer, We all do with some prepared remarks, and then we'll be happy to take questions from the investment community.
This call May include certain forward looking information with respect to news course business strategy actual results could differ materially from what is sad.
News Corp's form 10-K, and form 10-K filings identify risks and uncertainties that could cause actual results or whatever and contain cautionary statements regarding forward looking information. Additionally, this call will include certain non-GAAP financial measures such as total segment EBITDA adjusted segment, EBITDA and adjusted EPS, the definitions and GAAP to non-GAAP brick.
Conciliation of such measures can be found in our earnings release.
With that I'll pass over to Robert Thompson for some opening comments.
Thanks, Mike.
We are operating in a different difficult time, so this will be a rather different distant experience.
Before the business of the died I sincerely hope that all on this call each of our investors how business partners and their families a safe during this exacting era.
Every business and family is facing challenges and outdoors in particular.
Those who are suffering under the cost of cobot 19.
I have had to deal with complications from this strata disease.
For our company the safety of our employees has obviously been Paramount.
Many of our journalists took display much courage in recent months.
Including reporting from Wolfe.
During the intense first phase of water has become a pandemic.
I would also like to on a and Anthony Cozy, who passed at a relatively young age by which time he had already become a legendary sports photographer for the new cars.
As noted in an 8-K filing with the FCC last month.
We expected a broad impact on our business from the Pandemics inevitable economic consequences.
We were affected somewhat in Q3, and those effects will likely be significantly more pronounced in the fourth quarter.
As we expect this impact to continue in the near term significant cost reductions have been implemented across the company and additional steps will be taken in coming months.
These cuts are designed to deal with the short term exigencies.
And to reposition the company for long term growth.
There will obviously be an impact on executive compensation.
For many senior executives bonuses are the largest component of that cash compensation and these will be reduced by at least 20%.
The cuts will be led by our executive Chairman Rupert Murdoch, who is voluntarily foregoing his entire cash bonus for the current fiscal year.
As Chief Executive I will forego, 75% of my annual cash bonus.
And our board of directors have decided to reduce their cash compensation.
These significant cost reductions of all kinds across the company will clearly have a positive impact on our total segment EBITDA and our cash position and help mitigate some of the effects of the pandemic. We obviously leave open the possibility of further compensation cuts next fiscal year depending.
On the ongoing impacted the crisis.
Turning now to the third quarter results for fiscal year, Twentytwenty revenues declined 8% to $2.3 billion, including a $78 million or 3% impact from adverse currency movements total segment EBITDA was down although only 2% to $242 million. It is worth higher.
A lot that operationally adjusting for currency acquisitions and disposals and other items mentioned in our release adjusted revenues were down 4%, but our adjusted total segment EBITDA rose 1%.
Reported results also include a 1.1 billion dollar noncash write down mostly attributable to foxtel.
At the news and information services segment. The sale of News America marketing has formally close this is a significant step in terms of enhancing shareholder value and part of the continuing simplification of our company.
Hi, Sabra reevaluation of assets continues and I strategic review about community and regional type regional newspapers in Australia is at an advance stage.
We're also reviewing ways to improve transparency in our segment disclosure, which will enable investors to better appreciate the inherent value in and the growth potential of Dow Jones, which we believe is the best business News and analysis brand in the world.
We are working towards making that companies potential more obvious enter highlighting as various strengths.
Certainly relative to other business were up brands and for example to the New York Times.
Speaking of demand for premium content.
As you know we have entered into valuable partnerships with Apple and Facebook for use of our world class journalism.
Currently there are a harbinger as a positive change with Google where the CEO summed up in China has shown a more enlightened socially empathetic attitude to journalism.
In the past some in Silicon valley, so to create a system of petty patronage through foes philanthropic handouts and sententious sops seemingly design to to institutionalize a mendicant media.
Enlighten executives at Google tightly seek more meaningful changes to a dysfunctional ecosystem.
The terms.
Of trade in the digital World Us It may change.
The regulatory pressure is also intensifying as two weeks ago, the Australian government announced the introduction of a mandatory code that would require the larger digital companies to pay for content.
To adjust their algorithms to give additional white original news. It is absolutely crucial that more be understood about the character the power and the potential manipulation of algorithms and data.
A recent Wall Street Journal report on Amazon's business practices showed the potential danger of companies, having a dominant horizontal marketplace and selling their own products in segment verticals in essence.
Exploiting proprietary marketplace data and competing with and potentially under mining they clients.
In the third quarter news and information services improved profitability for the second straight quarter with 15% growth in segment EBITDA.
Dow Jones recorded a particularly strong performance as usual paid subscriptions rose 20% year on year to more than 2.5 million average study subs at quarter end.
The Wall Street Journal digital paid subs were up 15% to more than 2 million also Rick.
In recent days the journal has shown further acceleration with total subscriptions, reaching approximately 3 million to the first time, including 2.2 million digital lonely over.
Overall at the end of April digital subscriptions rose over 20% year on year.
Digital advertising at Dow Jones Rose, 25% year over year. Despite the challenges we faced with AD sales later in March. This is in strikingly Mark to contrast to the performance of the New York Times with digital AD revenue actually declined 8% I should repeat dose because for the purpose of clarity.
Digital advertising rose, 25% discount Johns and it fell 8% at the New York Times.
Dow Jones profit contribution improved and was a significant contributors segment EBITDA growth, while ebitdas slump, 15% of in New York Times.
We announced earlier this week the head of the Barron's group Belmond Latour will replace will Lewis as CEO from the middle of this month.
We will certainly leaves Dow Jones in fine federal and with enormous capacity for future growth.
Speaking of Barron's subscriptions rose, 14% year over year and over the past four years under Elbaz leadership that digital audience at Barnes group brands has quadrupled.
During the quarter the Wall Street Journal Digital Network broke records and hit 196 million unique users in March up 155% versus prior year.
Traffic was particularly strong market watching mileage way uses more than tripled to 90 million compared to the prior year.
The professional information business reported a 5% increase in revenues with risk and compliance once again, demonstrating strength rising 18% year over year.
Elsewhere in the segment newspaper digital subscriptions at News Corps, Australia were up 24% year over year rising to more than 613000 at quarter end with two thirds of subscriptions at the Australian now digitally.
News UK. The some reached 164 million global unique visitors in much representing a 17% increase over December according to Google analytics, while at the times and Sunday Times digital subscriptions grew 21% year over year to 345000, a now account for nearly six.
80% of the base.
Meanwhile, the new post advertising revenues in the quarter rose, 19% and the post digital network had 169 million average monthly unique visitors. According to Google analytics up from 107 million in Q2.
Turning now to book publishing revenue declines moderated harpercollins in the quarter compared to the first half while segment EBITDA grew year over year, despite very difficult comparisons.
As more people have moved to work and study from home we've seen a revival in ebook signs, we're particularly pleased with early sales with Joanna guidance Magnolia type of volume to which already sits atop the us bestseller lists.
Digital real estate, we're showing solid progress through January and February but began experiencing pandemic related declines in March.
Business at ARIA and real to Dot com will depend on the reopening of the Australian and us economies, but traffic to both sides remains encouraging unrelated dot com is outperforming the traffic trends of its house flipping competitor.
According to the March Comscore data.
In the subscription video services segment tire subscriptions rose to 444000 in Q3, including trust, which was more than doubled the prior year and carrier also showed strong growth over the prior quarter.
That figure has obviously been adversely affected in recent weeks by the suspension of sports in Australia as we disclosed in the earnings release.
We are in serious negotiations with the major sports over a fundamental reset of rights costs, Susan will discuss the possible accounting impacts shortly.
In coming weeks, we plan to launch our entertainment streaming product and expect that there will be strong demand given the power of our media portfolios marketing platform and the nascent demand in Australia.
We're also very excited by the multiyear deal with Warner Media announced this week that means foxtel will be the exclusive harm in Australia for hedge BR soon to launch hydro Max and other water media hits.
Let me now turn to lingering impact of covered non tech, which began to has an effect towards third quarter's end, but clearly will be a major factor in our Q4 results as we signaled in an 8-K filing last month.
I would first like to commend our leaders and our employees around the globe as we rapidly and successfully moved approximately 90% of that workforce around 25000 people into a work from in home environment.
Looking at the longer term, we have clear plans for addressing the immediate challenges, we face and for emerging vigorously on the other side of this crisis.
This will not be done by random crosscutting bought by strategic decisions about the business, we need to fashion for profitable future.
That strategy is informed by candid assessment of our capabilities and deficiencies and a clear sense that the business environment will be very different when the world finally returns to the new abnormal.
It is worth noting that this crucial Tom.
Newschool continues to have a strong balance sheet as of March 31st we have $1.4 billion in cash and cash equivalents and in addition, we have access to 750 million dollar corporate revolving credit facility, which remains on rule.
That bedrock of financial stability will help us with the category five stores.
As will the power of our brands and the energy and the creativity about people.
The headwinds will benefit the company in the short term, but I am extremely positive about our prospects for delivering long term growth and increasing shareholder value.
Now.
The more particulars on our results in this quarter I tend to Susan furniture.
Thank you Robert.
Turning to the financials fiscal Twentytwenty third quarter potential revenues were approximately $2.3 billion down 8% versus the prior year and total segment EBITDA was $242 million step 2% versus the prior year.
Currency headwind negatively impacted revenues and title segment, EBITDA by 3% and 6% respectively.
On an adjusted basis, which excludes the impact of acquisitions divestitures and currency fluctuations and the other options disclosed generically revenues fell 4% and title segment EBITDA increased 1%.
For the quarter, we reported losses per share of $1.24 as compared to earnings per share two cents in the prior year.
Includes $1.1 billion of noncash impairment charges, primarily related to write down of goodwill intangible assets at Foxtel and the reclassification of news America marketing to assets held for sale.
Adjusted earnings per share with three cents in the quarter compared to full sensing the prior year.
Before going into the quarterly detail ill add to Robert's comments on the K that 19 pandemic, which is expected to have a significant impact on me 10 operating result.
Immediate cost actions are underway variable cost, obviously being reduced with a heightened focus on the reduction of discretionary spend and non essential capex together with a thorough review of all head count requirements.
We are accelerating plans to reduce costs across the business in the medium 10, particularly at our news and information services segment.
These initiatives include but are not limited to global shared services to centralize our back office functions.
Our view that property in office footprint and reviewing our printing operations around the glide whereby we have already announced the printing suspension of 60 communities tightness in Australia.
Finally in relation to companywide liquidity. It is important to nice the only ketek spaces, we had already had non 100% subsidiaries foxtel and ARIA.
And these are non recourse to news Corp, we're not anticipating any covenant issues at Foxtel over the next 12 months and we have no plans to provide any additional shareholder funding.
With that as a backdrop I will now discuss the quarterly results the individual operating segments.
In news and information services revenues for the quarter, where I for $1.1 billion down 8% versus the prior year.
And adjusted basis revenues declined 5%.
Advertising revenue fell 14% with declines most notably at News America marketing any news, Australia west circulation and subscription revenue grew 1%.
Currency negatively impacted segment revenues by 2%.
Helpful also impacted by $14 million from the outbreak of claims at 19.
Digital revenues attaching to the newspaper markets represented 42% if they combined revenue up from 66% in the prior year.
Segment, EBITDA for the quarter with $75 million up 15% from $65 million in the prior year benefiting from increased contributions at Dow Jones improvements at the New York priced and the absence of losses from unruly, partially offset by lower contribution from that.
At Dow Jones consumers circulation revenues grew a healthy 4%, reflecting a 20% growth in digital paid subscribers across Dow Jones consumer products, including a 15% growth in digital only paid subscribers at the Wall Street channel.
Total Wall Street Journal subscribers exceeded 2.8 million in the quarter, an 8% increase from the prior year, which is an acceleration from the second quarter is quite right.
Professional information business revenues accounted for 29% at Dow Jones revenues, this quarter growing 5% to $114 million, reflecting an aging pricing risk and compliance revenue.
Advertising revenues attach on fell 2% this quarter, but as Robert mentioned, we saw sharp acceleration in digital advertising revenues, posting 25% year over year Gray.
Total advertising represented 47% attach advertising revenue.
Gotcha had revenue growth of 5% and another quarter of positive contribution segment EBITDA right.
Elsewhere advertising revenues at news UK sell 10% on reported basis and 8% in local currency weaker than the past two quarters, despite strengthening digital.
Trends that you just have remains very challenging advertising revenues that 20% on a reported basis and 30% Danny local currency.
Finally at News America marketing revenues fell 16%.
Turning to the subscription video services segment revenues for the quarter were $462 million down 14%. This is $539 million in the prior year, well down 7% in local currency.
The revenue decline was primarily driven by lower broadcast subscribers broadcast subscriber trends were relatively similar to the prior quarter, we kind of at 19 restrictions in Australia coming into place in the last week the Coursa.
I will say slow advertising revenues reflective of the overall TV marketplace.
Segment EBITDA during the quarter was $68 million down 31% from the prior year driven by the revenue decline, partially offset by renegotiated license fees and the timing of sports rights and the production cost you to kind of at 19 related suspensions.
Several costs were down 11% on a reported basis.
Foxtels closing paid subscriber base was approximately 2.93 million as of March 30 cents, reflecting a 1% year over year growth driven by cable subscribers.
Three quarter end Ks title subscriber base with including childless increased 444000 up from 199000 last year.
In fact, we reached over 470000 total subscribers by March 22nd the startup the winter sports season.
Subscribers have declined in recent weeks with the suspension of the NRL NFL season, as well as rugby Moshe sports and other international 14 case, but the.
If you view is remained highly engaged during the quarter and we expect an uptick in subscribers that clearly depend on the quality and quantity of NRL NFL games once I appreciate it.
My second they will more than 272000 pain tires subscribers.
We have been beta testing Foxtels, new travel and entertainment streaming service and we expect to launched commercially in the coming weeks and we're very pleased to announce that want to media deal to support launch.
In the third quarter broadcast churn increase assess timing almost two years to 17.5%, which was 20 basis points lower versus the prior year.
Broadcast ARPU remained relatively stable at 79 Australian dollars.
At the publishing Harpercollins had a strong quarter with revenues down 2% to $412 million and segment EBITDA up 4% $55 million. Despite a very tough comparison against the prior year, which had segment EBITDA growth of 29%.
So increase mill performance in general children's and in the UK digital sales grew 3% year IP to 23% of consumer revenue, which included increased mincing downloadable audio books.
At the digital real estate services segment revenues decreased 4% to $261 million due to the negative impact from foreign currency fluctuations on an adjusted basis revenues were flat.
Segment, EBITDA rose, 1% to $74 million or 9% on an adjusted basis.
Alright, great revenue fell 5%, however, without the 12 million dollar foreign currency impact Ari I agree modestly in local currency. This is an improvement from the first half performance benefiting from renewed growth in financial services.
Strain listing volume declines moderated to down 7%, which reflects mid single digit pricing Metro Melbourne and Sydney.
All faisel strong traffic metrics, achieving record levels can visits and audience during the course huh.
However, kibet 19 related government policies and restrictions, including bands on iPad time inspections, and interest and options have led to reduced listing volumes in recent weeks in response to the impacts from the pandemic area has implemented a number of relief packages to support its customers, including short term pricing concessions and changes to listing products to provide.
Greater flexibility for customers.
Please refer to our earnings release and the conference call immediately following this call for more details.
Move revenues declined 2% to $118 million with real estate revenues relatively flat traffic remains strong with unique users in the quarter up 6% to $68 million prior to the type of 19 tend to make made was on a solid growth trajectory in January and February with increased growth in traffic and leads Amazon pace to deliver strong second.
Operator please.
I did not similar to ours and other digital real estate portals those trends for the rest.
In response to the pandemic real tough institution really release initiative in late March for its customers, which was subsequently extended into may we send modification to the alpha the initiatives together with other kinds of at 19 related impacts reduced third quarter revenues by an estimated $6 million.
I would now like to talk about some of the same in the upcoming quarter forecasting has been challenging so I will discuss what we have seen in April and framed the relevant risks.
At news and information services, we expect advertising and single copy sale revenues in the segment to be adversely affected as a result of widespread business closures and social distancing measures.
Our framework advertising revenues, excluding news America marketing represented approximately 34% of segment revenues in the quarter.
In April advertising revenues at Dow Jones was down more than 20% with digital down modestly.
Advertising revenues and try and the UK was down more than 45% on a reported basis or around 40% in local currency.
As I mentioned earlier, we are taking aggressive cost actions to mitigate these revenue declines within the segment at the same time. We have also continued to see strong growth in digital subscribers across the key properties in April including over 20% year on year growth in digital only subscribers at the Wall Street channel.
In the third quarter, approximately 75% Dow Jones revenues with subscription based providing much more visibility instability.
Digital revenues accounted for 68% attachments revenues and digital paid subscribers accounted for 73% the Wall Street Journal subscriber base.
In subscription video services, we anticipate an increasing broadcast Chen with the suspension of the NRL NFL season.
For April broadcast shared has been fairly stable, although we have seen lowest sports TNK subscribers as you would expect.
Clashes of pubs and clubs and lower occupancy at hotels throughout history are also expected to adversely impact commercial subscription revenues together with a downturn advertising revenue.
Attainment Foxtel has implemented several initiatives, including tightening up additional entertainment content to pull subscribers at providing foxtel broadband customers with unlimited data allowances the streaming.
As the sports rights accounting Foxtel Amortizes events, I sports like Formula, one, which have no dedicated channels upon the appearance at the event.
Consequently, the third quarter included about 9 million us dollars off that with the said Q2 events canceled opus find.
Channel by sport truck, such as the ISO NRL and domestic cricket our expense on a straight line basis equity.
The third quarter included a full amount of Razzies for all three of those sports in the event that the NRL NFL do not ratio next season in the fourth quarter, we would plan to said those costs until the sports regime.
All the sports based contracts have different terms and conditions and we have currently in discussions with the leaks around the best way to move forward and to value to season that remains.
As a framework the quarterly costs between the ISO and arrow prior to the suspension with 95 million Australian dollars or approximately 60 million us dollars.
In addition, we also expect and approximately 10 million dollar impact from the accelerated into time and amortization in the fourth quarter.
In book publishing as the retail market adjusted to stay at high restrictions by closing a number of bricks and mortar stores have collinsville strong grossing online sales with E books returning to growth.
Our release slate is largely intact and as Robert mentioned, one of our top for the Joanna gains Magnolia type of volume to be selling very well.
At digital real estate services as noted in their release ARIA anticipates, a challenging listing environment given the government's social distancing meshes with April.
Hi, listings fully Stacy, 3% realtors facing lower real estate transactions, but encouragingly lead volume and unique users have shown improvement seen recently.
Both companies have taken proactive release meshes to extend credit to their respective customers with discounts or other similar measures, which will have an adverse impact on revenue.
Capex for the is expected to come down significantly to around $475 million compared to $572 million last year, which include the 35% to 40% decline at Foxtel and update on our initial guidance, that's approximately 20% year on year reduction.
Finally, a word about our tax rate.
Panelled perspective, we expect an unusually high tax rate for the full year two decision operating losses in foreign jurisdictions that we are unable to take deductions against this is a pay and I'll impacts not a cash impact.
As I mentioned phase our unique times, but we believe with our strong liquidity position market, leading brands now emphasis on digital transformation as well as a more aggressive focus on cost measures these copies well position to weather the contract.
With that let me hand, it over to the operations acuity.
Thank you if you ask your question. Please signal by pressing star one on your telephone keypad, if you're using speakerphone. Please make sure your mute function is turned off.
Reach our equipment.
Again press Star one to ask a question, we'll pause for just a moment everyone an opportunity to signal for questions. Thank you.
Well take our first question Alexia Quadrani from Jpmorgan.
Hi, Thank you very much can you elaborate on the strength that digital advertising highlights.
Quarter Wall Street Journal.
I can talk a little bit, but still seems like it's coming in.
In the industry I'm wondering.
Specific to insert verticals that continue to be strength product Matt.
And then just a follow up.
The makeup of the strong growth in digital subscribers also journalists.
National domestic anything different.
Is it pretty much just mark.
Wow.
Oh, Thanks, Alexia good in terms of through the subscribers.
Obviously, we have had strong growth in.
Use subscriptions.
I think the thing to remember about Wall Street Journal subscriptions is it.
But once you have a subscriber you also have an opportunity to up sell and we so.
Leasing growth for example in.
Subscription is coming from Mako wants to the journal and from Marketwatch Tibetans.
As well as that from the journal Tibetans and then for the more specialist Wall Street Journal subscribers as an opportunity to sell them to up sell them to our premium business products, which obviously have.
Yes.
In terms of advertising clearly traffic has been particularly strong.
Headwind as you may well be aware some concerns early in the kind of the crisis.
[music].
Blocking as adds related to cobot crosses coverage.
Gradually that's a problem has diminished and so we are noticing that.
The amount of advertising were getting is matching loquat, but to some extent the significant increases in traffic we've had across the wall Street Journal and Marketwatch, we notice a tick advertising has increased the custom advertising is is also on the roz.
And to a certain extent programmatic crossing for our business quite frankly, it's an extraordinary opportunity because big clients are coming straight.
Through the Wall Street Journal.
Onto other publishing houses around the world as they want to deal directly with us rather than necessarily through an advertising agency.
And.
While this is at the moment of short term phenomenal throughout indications that this may very well become a long term trend.
Thank you will exceed the other thing that I would add to that is the other placing thing that we're seeing is the average age is looking at options. So we did have an average age of around 60.
Now around 47.
Spot is coming.
If I can further color Susan.
By saying with what we've noticed for example of on Wall Street Journal leaders on Apple News Clos is historically, there's been shall we say a disproportionate number of men rating the Wall Street journal, the breakdowns around 75% mile 25% CMO.
Just at this moment the readership of.
The Street Journal on.
The federal news plus.
Size is.
Majority women minority men.
Thank you Alexia.
Well, we will take our next question. Please.
Absolutely.
The next question comes from.
All right cost key from Citi. Please. Please go ahead.
Hi, Robert Hi, Susan.
Capital from May just this one.
Thank you Mr. thoughts rod.
That you've given us a good Friday work on what happens on quarterly basis.
With that you see.
This is an opportunity to renegotiate several dollars sports rights deals longer Tim.
I think they can get you can be lumpy Ted sidings and.
That's that's warranted given some of the family.
Hi costs interested you sold on that issue and secondly, you happen to quantify the potential impact of the Lake Michigan.
Key goal.
And do you expect without continue to bye bye. Thank you.
Sure first of all on sports rights, obviously, it's inappropriate to go into detail at this stage, but.
Obviously needs to be a fundamental reserves the idea that things will suddenly returned to normal this season.
It's not just the quantity of games is the quality of the experience and that has.
Obviously been diminished and that reset and us to apply longer term to Rogers drug.
In essence, there is a new reset reality.
And then Chuck just in relation to your question on me, we Havent given that Q4, but what I can say we implemented the nations common 19 since March in relation to made any impact of back in Q3 with 6 million. So you can use that as a proxy for your run rate.
And we Havent made any announcement is to any further extension in Asia.
Thank you and show.
We'll take our next question please.
Absolutely.
The next question comes from Greg Hubert from Huber Research partners.
Thank you hi.
On the newspaper side in Australia on cost cutting side, a lot piece and that's been written up there.
Most out your newspapers some of them down there you're shutting down the hard copies version and go into future normally and stuff can you just.
Just talk a little bit further about that.
But curious what percentage of your.
Subs down there what do you have shut down there with the on more normally this is a business model for example that mortgage let me just like only 10 15, 20% of the subs down there I mean, how significant is Thats. My first question and then my second question is I guess on these super side as well just generally.
Thank you have a lot more costs you can take out.
The us for.
Dropped out Jones, UK, Australia speaking of a lot more costs you can take out.
Action to this virus situation. Thank you.
I'll take the second question.
Craig.
Constantly reviewing costs and that those costs in headquarters, where they've been seeing significant reductions in recent days and ride through.
Looking for efficiencies in tech spend we're looking for the efficiencies that come from the closer coordination that really has been underway in recent years, it's not a new phenomenon, but it gives us an opportunity to look across businesses.
Very very closely measure different cost levels and respond appropriately while we're not going to do is cut cost in the way that on the monsey the editorial integrity of the leading news organization in the world.
And Craig just in relation to the math to starting a straight to the markets that with Ses printing at the alignment what can be institutional subscription related to the advertising relation products and as Robert mentioned, we are undertaking a detailed strategic view of the entire regional and community portfolio that industry. So the regional.
Last month, we will have sops attached to them, but not the communities and then just to supplement on the cost side I mean I agree.
At this point, but we do believe that across.
Pull out businesses on a global scale, particularly when we think that backup functions that we do have some significant opportunities that we can walk we have seen actively working on nice missions over the course last 12 months.
Looking at.
But we do believe Theres a lot more opportunities we can do with Goldman Sachs is that as meaningful thank you Greg.
Our next question please.
Absolutely and as a reminder, participants you May press star one to ask a question.
Our next question comes from Brian Hoffman from Morningstar.
Oh, Hi, Robert.
Does the current environment help simplification program.
Has gone.
And what does it make it more complicated essentially for.
Sales and Susan.
Charge taken in flux till.
Well that more driven by changes in assumptions related to the.
Traditional folks to business.
Yields useful.
Folks till now also changed.
Brian clearly the simplification was a preexisting program, but theres certain extent you might well be correct in the various things moving expedited. During this period of crosses what I would like to say specifically around simplification is clearly where we're pleased that the Nam transaction.
Has progressed.
Actually we had to fight the charlesbank pre existing specialist expertise in that area will be able to make a significant success of the business you can tell from the tenor of our content comments about Australia that there is obviously.
As you review of our print holdings well underway. So our simplification process is often finished and part of that is that we're very keen to highlight the.
The value inherent in for example, Dow Jones, which involve reported vastly superior numbers to those of the New York Times.
These figures are not fully obvious in the current news and information services segment.
If you think of the journey in recent years.
With amplify.
The early sale of the local media group with the.
The Nam Seo and all the others.
Got it ledger the acquisition of real to the purchase of Harlequin, we are around the different more specialized company than we were a few years ago.
And then Brian just in relation to your question on Fox television payment.
We do look at these from at Tcf sustainable section on lockup multiple perspective, and clearly is being taxed at definitely affected at trends, resulting in lower expected.
Rises and the impact of kind of at 19 is expected to have clearly that this impact on appetite advertising ITC.
Customers and commissions subscription revenues in the 10.
So when we combine all sites, we thought it was appropriate to take any payment.
Okay.
That's it clearly are there any more questions.
There are no further questions at this time and I'd like to turn the conference back over to you. Thank you.
Great. Thank you.
Thank you for all participating have a great day and most importantly stay safe, we'll talk to you said.
This concludes today's call. Thank you for your participation you may now disconnect.