News Corp Australia hires McKinsey for growth strategies
News Corp Australia has brought consultants from McKinsey & Company on board to advise the Board on new growth opportunities.
The Rupert Murdoch-controlled business has tasked McKinsey with developing strategies that can build the publisher's digital subscription base, amid a continued decline in print income. McKinsey & Company will also craft scenario’s for better monetisation across News Corp Australia’s media portfolio, and identify potential options for horizontal or vertical expansion.
News Corp Australia is the parent of several well-known brands in the media landscape, including The Australian, The Daily Telegraph and Herald Sun, and regional titles such as The Advertiser (Adelaide), Mercury (Hobart) and The Cairns Post. With eight of the country’s top ten newspapers in its portfolio, the Sydney-headquartered company is the country’s largest publisher of newspapers.
The six-week project takes place against a backdrop of major cost cutting at News Corp. Globally, News Corp posted a US$1.5 billion loss in its 2019/20 financial year, with its Australian newspaper businesses suffering sharp declines in revenue and its Foxtel pay-TV business in Australia bleeding subscribers. Covid-19 has since only heaped more pressure on its financial results.
As part of national cost cutting measures, the company has over the past year ceased the printing of 112 community and regional newspapers, and closed down over 30 titles altogether. The restructuring plan saw News Corp's regional and community team of journalists and editors nosedive from around 1,200 to 375.
This restructuring transformation was led in the initial stages by PwC, and is currently being supported by consultants from Deloitte.
McKinsey is one of News Corp Australia’s trusted advisors. The US-origin global strategy consulting firm previously worked on the setup and integration of Foxtel and Fox Sports (a joint venture between News Corp and Telstra which completed in early 2018), and then spent more than a year working with the pay-TV provider on growth options, until 2019.
A global strategy
McKinsey’s strategic work down under is part of a broader revamp within the News Corp Group, which also houses The Sun and The Times in the UK, and The New York Post and Wall Street Journal in the US. While slashing its cost base – the company aims to reduce its total global headcount by over 10 per cent in fiscal 2020/21, the media giant also is chasing new revenue models.
At News Corp's full-year results in August, global Chief Financial Officer Susan Panuccio said that the company is looking to mitigate advertising declines by increasing subscriptions and cover prices. The company is also eyeing monetising its swaths of consumer data, while maintaining the data privacy of its audience.
“We are taking significant and decisive steps to improve performance, including better monetising our growing global audience and further cost reductions,” Panuccio said.
