The proposed date for announcement of the Australian Competition & Consumer Commission (ACCC) final decision on the proposed sale of APN News & Media regional newspapers to News Corp is 8 December 2016.
Consideration of the sale is occurring against this backdrop………
News Corporation will rip $40 million in costs out of its Australian publishing arm in 2016-17, some of which will come from job cuts, as the Rupert Murdoch-controlled company deals with falling advertising revenue and a shift to digital.
Advertising revenue at News Corp Australia fell 11 per cent in local currency in the first quarter, which was relatively similar to the same period last year, News Corp chief financial officer Bedi Singh told investors on Tuesday morning during the company's financial results call.
Circulation revenue increased on a local and reported currency basis. News Corp reports in US dollars.
"While we continue to benefit from the cost-reduction program that News Australia announced in the second half of fiscal 2016, which totalled around 5 per cent of the cost base, we are now embarking on further cost initiatives," Mr Singh said.
"We expect an additional Australian dollar $40 million in cost savings this fiscal year while we continue to push digital initiatives more broadly."
It is understood that these costs will come across the local business and will include redundancies. News Corp's Australian publications include The Australian, The Daily Telegraph and The Herald Sun. News Corp shares finished Tuesday 1.3 per cent higher at $16.11 in local trade.
It comes as News Corp has begun offering redundancies at The Wall Street Journal and is planning for $US100 million ($130 million) in annual savings by the end of 2017-18.
Less than two weeks after it announced a company-wide cost slashing strategy, News Corp Australia has started canvassing the idea of voluntary redundancies to its staff, encouraging those interested to put their hands up before its redundancy programme begins.
Industry union Media Entertainment and Arts Alliance (MEAA) says it is aware News Corp management had begun gauging staff interest in redundancies.
In a response to News Corp’s redundancy agenda, the MEAA says it has rallied behind affected editorial staff, and had previously made an effort to ensure forced redundancies are not on the cards.
“MEAA has called on News Corp Australia to confirm that there will be no forced redundancies as part of its latest round of cost savings measures. It is particularly frustrating that the announcement of the redundancies came within hours of voting opening for a new enterprise bargaining agreement negotiated between News Corp and MEAA members over many months – with the company’s management never once indicating that further job losses and cost savings measures were imminent,” the MEAA states.
News Corp’s planned acquisition of APN News & Media’s Australian Regional Media newspaper business will result in up to 300 job losses as back office synergies are sought to secure the future of quality journalism in the affected regions.
The cuts are expected to be implemented over an initial phase, provided the deal is approved by shareholders and the competition watchdog, and a subsequent round of cost cuts once News Corp has had more time to assess the ARM operations across regional Queensland and northern NSW.
However, there are no plans to shut ARM titles, which include The Gympie Times, The Chronicle in Toowoomba and the Ballina Shire Advocate, provided they remain profitable…..
ARM recorded a 42 per cent drop in earnings before interest, tax, depreciation and amortisation to $3.4m for the six months ended June 30, on revenues of $89m, which were down by 6 per cent.
APN announced its ARM sale plans in February as part of its efforts to focus its business on the more lucrative radio and outdoor advertising sectors.
News Corp should benefit from picking up extra printing plants. It distributes The Australian and The Courier-Mail throughout Queensland from presses in Brisbane and Townsville. The acquisition included presses in Yandina, Warwick and Rockhampton, which will cut the distribution costs, although APN closed a printing plant in Toowoomba last year.
The ARM newspapers were divested by News Corp as part of its acquisition of The Herald & Weekly Times group in 1987.
