Consultants to restructure News Corp's Australian newspapers

News Corp Australia, the parent of major newspapers and Fox Sports Australia, has hired consultants from Deloitte Consulting to help the company restructure its newspaper division. 

With national newspapers such as The Australian, The Daily Telegraph and Herald Sun, and regional titles such as The Advertiser (Adelaide), Mercury (Hobart) and The Cairns Post, News Corp Australia is by a distance the country’s largest publisher of newspapers. The Sydney-headquartered company publishes eight of the top ten newspapers read across the country.

Like many other media businesses, News Corp is facing a sharp decline in its advertising revenues from its newspapers business due to the covid-19-induced downturn. Companies are seeing a fallout in demand, and in turn they are winding down discretionary costs such as marketing and advertising spend.

For newspapers and online media platforms, the hit is big. According to one estimate, media companies including News Corp, Seven West Media (The West Australian, Sunday Times) and Nine Entertainment (The Australian Financial Review, Brisbane Times, The Sydney Morning Herald) have lost as much as half of their revenue during the coronavirus pandemic because of lower demand from advertisers.

Beefing up cost cutting

This trend has now forced News Corp Australia to intensify its already existing cost cutting plans. The Rupert Murdoch-owned business has been working on consolidating its advertising teams over the last 12 months by bringing together staff from The Australian and metropolitan, regional and local titles. 

With consulting firms invited to submit a bid. 

Deloitte brings a track record at News Corp Australia to the table. The consulting firm previously conducted work for Foxtel, a pay TV operator jointly owned by News Corp and Telstra. 

The restructuring engagement comes weeks after News Corp announced it would suspend the printing of 60 community titles in New South Wales, Victoria, Queensland and South Australia. Similarly, Foxtel is struggling as a result of the postponement of sports tournaments across the world, and last week the company had to make around 200 employees redundant. 

Meanwhile, at a global level, parent company News Corporation, the owner of among others the Wall Street Journal, The Times and The Sunday Times, recently released a statement that the pandemic has “created significant volatility, uncertainty and economic disruption” for the business.

Back in 2012, News Corp already overhauled major parts of its local newspaper business, which included centralisation of activities and job cuts. This process was advised on by consultants from Boston Consulting Group (BCG). 

Last month, Virgin Australia hired Deloitte to oversee its voluntary administration and restructuring.