Foxtel Now – a streaming version of Foxtel’s traditional broadcast business – had 334,000 paying subscribers as of December 31, down from 375,000 in the previous quarter. Foxtel Now was expected to come under pressure following the end of Game of Thrones in the middle of the year.
A sluggish Australian economy only exacerbated Foxtel’s financial crunch. Revenue fell $US61 million($90.6 million) in the quarter, or 11 per cent, $US25 million of which was due to currency fluctuations. Adjusted revenue fell 6 per cent to $US526 million. Earnings before interest, tax, depreciation and amortisation fell 17 per cent.
News Corp also revealed Foxtel now has another shareholder loan, but this time from Telstra, which owns 35 per cent of Foxtel. In February, Telstra extended Foxtel a $170 million loan in order for Foxtel to pay Telstra the fees it pays for using its cables to deliver pay TV to consumers. The Telstra facility has been locked in at a 7.75 per cent interest rate.
“[Foxtel are] going through a significant transition and this is an opportunity for us to provide our support,” a Telstra spokesman said.
It comes after a major refinancing of Foxtel’s debt which included News Corp tipping in $900 million worth of facilities, including $700 million of debt in late 2019.
It also locked in a further $900 million of facilities from about a dozen local and international banks, and a $500 million US private debt placement.
While News Corp hasn’t provided information around what interest rate Foxtel is paying on its shareholder or bank loans, it did reveal in August that a $200 million shareholder loan from May had a variable interest rate of 9 per cent.
When the initial $300 million loan News Corp gave Foxtel in April is taken into account, Foxtel in 2018-19 paid News Corp nearly $10 million in interest on those loans.
Overall, News Corp’s profit for the quarter slipped $US10 million compared to the same time last year to $US85 million.
More to come.