News Corp prepares for major tabloid price rise

Rupert Murdoch’s News Corp will hike the cover price of its metropolitan tabloids across Australia as it braces for an ageing print readership and a weaker advertising market.

Multiple sources familiar with the plans, who asked for anonymity to speak freely, said the New York-based media company is also planning a major redesign of the print editions of The Daily Telegraph, The Herald Sun, and The Courier-Mail, as part of the changes.

The price increase – expected to be substantial – was approved by global News Corp chief executive Robert Thomson, the sources said. News Corp did not respond to requests for comment.

News Corp is expected to bump the prices of its tabloids.Credit:Louie Douvis

News Corp owns a range of other local assets, including The Australian as well as cable TV operator Foxtel and streaming services Kayo and Binge.

The company has not provided reasons for the proposed changes, but this masthead reported last year the publishing industry was facing major increases in the cost of paper, caused by soaring electricity prices and shipping costs. News Corp, as the largest print publishers in Australia, was facing the prospect of limits on how much paper it could use.

Last August, it bumped the Saturday and Sunday cover price of the tabloids by 50 cents to $4. The weekday editions cost $2.50. That compares to $4 for The Sydney Morning Herald and The Age and $4 for The Australian.

News Corp is one of a number of local media companies facing broader financial pressure from rising costs that have coincided with a weaker advertising market.

The redesign could be indicative of a change in editorial strategy, but is more likely to do with falling print circulation figures and a need to generate income to offset costs associated with print.

The sources said the re-design, which has been shared among media buyers, has shorter, smaller headlines and smaller fonts, indicative of plans to provide more words in print.

Costs in the publishing business will be scrutinised closely by shareholders, if News Corp succeeds with plans to offload its US real-estate asset Move.

Murdoch, executive chairman, last week halted plans for a potential merger of his two major media companies Fox Corp. and News Corp, conceding the proposed tie-up was not in the best interest of shareholders.

However, the withdrawal of the plans, which were fiercely opposed by some major shareholders, coincides with advanced talks between News Corp and rival CoStar about the sale of its stake in real-estate listings site Move, the owner of

Will Granger, of Airlie Funds Management, which owns 2 per cent of voting shares in News Corp, was publicly opposed to a News-Fox tie-up. He said there was still a lot of value in News Corp, particularly through Dow Jones, publisher of The Wall Street Journal.

“The Dow Jones segment possesses a range of qualities we like in businesses; strong brand strength, pricing power, scale economies, recurring digital subscription revenues and a capital-lite model that generates strong cash flows,” he said. “We’d argue these qualities warrant a premium valuation. Dow Jones also owns a burgeoning Risk and Compliance business, which we think is a high-quality asset that is largely overlooked by the market.”

People familiar with talks, who requested anonymity to speak freely, said the deal would be worth more than US$3 billion ($4.3 billion) and was enough to have changed the prospect of a tie-up between Fox and News Corp.

“Any potential transaction would support News Corp’s strategy to optimise the value of its digital real estate services segment, while strengthening’s competitive position in the market,” the company said in a statement.

The sale, if it goes ahead, is not expected to directly impact News Corp’s local real-estate listings company, REA Group, but it does raise questions of whether News Corp has similar plans to reduce its 61.6 per cent stake locally.

Granger also told this masthead following last week’s announcement that a potential sale of Move made more sense. “It would help to simplify the business and realise value for News Corp shareholders whilst simultaneously finding a more natural home for the Move asset in CoStar, where perhaps the value of that asset can be better maximised,” he said.

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