Foxtel Saves $180 Million With Reduced Broadcast Deals, Announces Staff Restructure
ay-TV broadcaster, Foxtel, is set to save at least $180 million over the next three years due to reduced broadcast rights fees due to the COVID-19 pandemic.
The figures were released as part of Foxtel’s parent company, News Corp’s quarterly earnings call with chief executive, Robert Thomson, who said Foxtel is still negotiating lower fees in ongoing extension talks for more sports broadcast rights deals.
“While negotiations with some sports continue, deals already completed will reduce the cost of sports rights at Foxtel by at least $180 million over the next three years as compared to the prior contracted value,” Thomson said.
“The idea that things will suddenly turn to normal… is absurd.
“It’s not just the quantity of games, it’s the quality of the experience, and that has obviously been diminished,” he said.
These savings on broadcast deal come primarily from revised deals with the AFL, NRL and Football Federation Australia (FFA), with the latter reportedly halving the value of its broadcast deal according to the Australian Financial Review (AFR).
AFR reported the revised one-year broadcast deal Foxtel signed is worth $32 million, covering both the men’s A-League and women’s W-League through to the end of the 2020/21 seasons, down from a $57 million per season deal.
According to the report, News Corp recorded an 11% drop in total annual revenues to $9.01 billion, with Foxtel’s paid subscribers dropping 12% compared to the previous financial year, now sitting at 2.77 million subscribers.
Following this announcement, Foxtel also announced a large range of organisational role changes in a restructure, seeing Foxtel’s chief commercial officer, Amanda Laing, become the chief commercial and content officer, covering both sport and entertainment.
The purpose of the restructure, according to Foxtel CEO, Patrick Delany, is to create better unification between Foxtel’s three platforms, Foxtel, Kayo, and Binge.
“These changes recognise that entertainment and sports content is core to everything we do and that we are now ‘leveraging’ group assets across the Foxtel, Kayo and Binge businesses to reach more subscribers than ever before and make forward-looking investment and operational decisions,” Delany said, in an email to staff.
“It’s a natural progression to bring entertainment and sports together, so we approach content decisions and investments for the group’s future, without being caught up in structures and silos of the past,” he said.
Alongside the addition of ‘content’ to Laing’s role, Steve Crawley has been named executive director of Fox Sports, while chief commercial officer of Kayo, Ant Hearne, has been promoted to executive director of Kayo, among other moves across the company.
“This reorganisation recognises that we are now a more diversified business with interests that extend from the traditional Foxtel business to advertising, sports production, entertainment creation and new streaming businesses,” Delany said.
“These organisational changes are designed to unlock the Foxtel Group’s full potential.
“I appreciate these changes are significant, and in some areas, there is additional detail to work through in the coming weeks, which we will keep you up to date with through your individual teams,” he said.