News Corp (NWSA) 2015 Q1 法說會逐字稿

Good day, everyone, and welcome to the News Corp first quarter fiscal year 2015 earnings conference. As a reminder, today's presentation is being recorded. Members of the media are invited on a listen-only basis. At this time, I would like to turn the conference over to Mike Florin, Senior Vice President and Head of Investor Relations. Please go ahead, sir.

Thank you very much, operator. Hello, everyone, and welcome to News Corp's fiscal first quarter 2015 earnings call. We issued our earnings press release about an hour ago, and it's now posted on our website at NewsCorp.com. On the call today are Robert Thomson, Chief Executive, and Bedi Singh, the Chief Financial Officer. We'll open with some prepared remarks, and then will be happy to take questions from the investment community.

This call may include certain forward-looking information with respect to News Corp's business and strategy. Actual results could differ materially from what is said. News Corp's Form 10-Q for the three months ended September 30, 2014, identifies risks and uncertainties that could cause actual results to differ, and these statements are qualified by the cautionary statements contained in such filings.

Additionally, this call may include certain non-GAAP financial measurements, the definition of and a reconciliation of such measures can be found in our earnings release and our 10-Q filing. Finally please note that certain financial measures used on this call such as segment EBITDA, adjusted segment EBITDA, and adjusted EPS are expressed on a non-GAAP basis. The GAAP to non-GAAP reconciliation of these non-GAAP measures is included in our earnings release. With that, I will pass it over to Robert Thomson for some opening comments.

Thank you, Mike. As the results you've seen today reflect, we are off to resounding start in our second fiscal year as the new News Corp. Our revenues, segment EBITDA, free cash flow, and earnings per share were all up from the prior year. Our broader goal of globalization and digitalization is preceding apace with passion and purpose, as is the ongoing transition of our newspapers in the US, UK, and Australia.

Meanwhile, we are deepening our diverse portfolio with strategic acquisitions of significance. First, we closed the acquisition of Harlequin on August 1. The integration since the closing has been rapid and efficacious. We are expanding HarperCollins' reach and that of our authors across Europe, Latin America, and Asia. We are finally focused on driving cost savings with the goal to improve efficiency while delivering high quality content across multiple platforms and markets, and we're taking steps to leverage and monetize the extensive Harlequin back catalog.

Second, we announced along with REA Group in Australia plans to acquire Move, home of realtor.com, expanding our real estate footprint in the large but still nascent US digital property marketplace. This is a transforming acquisition for the new News. One that we expect will have significant benefits for years to come and that clearly complements our existing platforms. I will expand on this theme later in my prologue.

Meanwhile, we continue to enhance and refresh our digital offerings across the globe, including the launch of the new Wall Street Journal app, the development of Sun+ in the UK, and the refreshing of our metro mastheads in Australia. There is increased collaboration across divisions resulting in a more coherent digital strategy, more creative products, and more compelling offerings for our customers.

Looking now at the first quarter of fiscal year 2015, some general observations. The advertising headwinds in Australia have dissipated. The results for our businesses there showed real and hard won improvement in revenues and in EBITDA. The green shoots appear to have taken root, but we will continue to invest in our sales teams and cherish our unique content.

HarperCollins and REA again showed considerable strength, contributing much to both our top and bottom line, providing even more evidence that we can build a profitable future on these core pillars. We are seeing sequential improvements at the Dow Jones professional information business, and are confident that we are on the right track. Advertising at the Wall Street Journal has been robust in recent weeks with October showing solid gains versus the prior year, driven largely by print advertising. Long-term trends remain difficult to predict, but we are happy with the contemporary trend. We will, however, never allow ourselves the sin of complacency.

News America Marketing continues to show strength in the in-store category, highlighting the importance of point of purchase, which we believe has only become more valuable in a fragmenting media world. Free standing inserts have been softer in recent weeks and will be a focus of particular attention in coming months, and Amplify has shown some gains as the business has started moving from the development stage to the all important sales stage. The coming school season will be crucial for the Company as the sales cycle intensifies.

In general, progress is solid because we have had a cogent and consistent plan for News Corp. We are purposefully executing on that strategy and continue to be diligent in confronting costs. Integral to that digital and global strategy has been the diversity and complementarity of our portfolio which was distinctive from day one and has since been enhanced. This powerful portfolio has provided the opportunity for growth even with the ad market somewhat uncertain and visibility obscured.

We have clearly come far over the past 15 months, the acquisitions of Storyful, Harlequin, and we expect imminently, Move, the retooling of Dow Jones professional information business, the launch of a new curriculum at Amplify, the growth of REA in Australia, and its expanding reach in Asia. However, these initiatives have not blurred our focus on driving improved operating efficiencies around the Company and the world. We believe we are uniquely positioned for growth, particularly as technology advances our platform capabilities and stimulates the appetite for and access to the kind of premium, compelling content we create and distribute.

As for the quarter, the positive results underscore why we are humbly confident in executing our long-term plan. Today's numbers show the power of our provenance and our prospects. While newspapers are part of the foundation of the Company and always will be, we are not just a newspaper publisher. We're a content and technology Company with unique but complementary assets and a balanced revenue mix.

Some high level numbers on which Bedi will elaborate eloquently, for the quarter our reported revenues grew 4% to $2.2 billion, a notable improvement since last quarter, and reported total segment EBITDA grew by 21%. Importantly, our adjusted EBITDA grew 18%, and free cash flow available to News Corp grew by $83 million.

Among the highlights of the first quarter was book publishing. HarperCollins adjusted segment EBITDA which excludes Harlequin and certain other items grew over 20% this quarter, as the Divergent series continue to pay dividends and showed the undoubted virtue of a blockbuster book. Meanwhile, we have never been more excited about digital real estate, and REA's success this quarter helps to explain why. Revenue growth was 24%, and segment EBITDA increased 30%. The Company's vast trove of expertise will be critical to the future growth of realtor.com in the US, and our other online properties.

While we have been candid about the challenges facing our newspapers, we are seeing more encouraging trends in advertising and circulation revenue. We remain conscious that the sector is in transition, but believe that we have the scale and the skills to succeed. To focus on a few [brands], the Times in the UK is delivering both volume growth and higher revenue per subscriber. Digital, which already accounts for nearly one-third of paid sales has been growing at a double-digit rate.

At the Sun, we launched our tablet app integrated with sports clips and marketed with the Dream Team Fantasy League. While it's still early, we are pleased with the progress and the number of Sun+ members has increased markedly. We are still monitoring churn and will have formal metrics for you later this month.

At the Wall Street Journal, we are now seeing momentum restored. As I mentioned, we've launched a new iPad app and added a subscriber membership program through WSJ+ inspired by our success in London with the Times. Our team at the Journal, under Will Lewis, is working hard to grow subscriptions with simplified pricing, new products and enhancements, and international expansion. We just launched digitally Barrons Asia and expanded the burgeoning WSJ magazine to Latin America.

At News Australia, we have launched our next-generation tablet apps for the metro mastheads, and are offering advertisers a seamless cross-platform product. We will, as one must, continue to iterate and improve the offerings. We are capitalizing on the strength of the Australian by publishing a new business section to attract advertisers and readers, and leveraging some content from the Wall Street Journal in another example of cross-border, cross-fertilization. Turning to digital education, we had a solid quarter, led by our early grade hybrid product offerings. Feedback from the launch of our digital ELA curriculum and math offerings has been positive, and we believe they position Amplify strongly for the upcoming sales cycle.

Before I conclude and turn things over to Bedi for more statistical specifics, let me return briefly to the subject of Move. We are even more excited about its potential than when we announced plans for the acquisition in September. It is increasingly clear that the US online real estate market is fragmented and at a rather early stage of its evolution compared to markets elsewhere in the world.

Move has the freshest, most accurate listings and a strong relationship with realtors. These assets will soon be complemented by the powerful media platforms at the heart of News Corp, including the Wall Street Journal and News America Marketing. We will have compelling content and unique brand building potency and technological savvy, all of which are crucial ingredients in the sprint to success. We'll have the great advantage of involvement by REA, a majority-owned Australian online property company, whose own success is legend and which will be able to share valuable learnings and lessons with Move.

An estimated $14 billion will be spent on the marketing of properties this year by real estate agents and brokers in the United States, and that figure does not include rentals or mortgage financing. We expect the recent relaxation of mortgage lending restrictions will also help stimulate the housing market which has yet to recover full health after the financial crisis. The combination of the shift to digital marketing and the broader economic trends are certainly auspicious.

Realtor.com will allow us to gather important data of value to our other properties. When a purchaser identifies an interest in a home in Tribeca or Taos, they are potential Wall Street Journal subscribers. We will be able to repurpose that permissioned data for our other partners and clients. We anticipate that it will be a rich source of monetizable intelligence about a desirable demographic. While there is much hard work ahead, we believe the rewards of realtor.com will be real for all of our shareholders.

We remain committed to a balanced long-term approach to capital allocation among organic investment, strategic M&A, and the return of capital. As evidenced by the Move deal, our strategy is to pursue new opportunities where we can use our global platform and scale, opportunities which inherently complement and extend our expertise. Now, let me turn it over to Bedi who will provide background detail on the positive results we're announcing today.

Thanks, Robert. First, I'd like to share with you some high level financial highlights, and then we'll discuss each segment in further detail. We reported fiscal 2015 first quarter total revenue of $2.2 billion, a 4% increase versus the prior-year period revenues of $2.1 billion. Excluding the impact of acquisitions, divestitures, and foreign currency fluctuations, adjusted revenues were up 1% compared to the prior year.

Turning to EBITDA, we reported total segment EBITDA of $170 million which was a 21% increase versus the prior-year period. Results this quarter include $14 million of costs related to the UK newspaper matters net of indemnification. Excluding that cost and the impact of acquisitions, divestitures, and foreign currency fluctuations, our adjusted total segment EBITDA grew by 18% versus the prior year.

Reported EPS were $0.11 versus $0.05. Excluding restructuring and impairment charges, UK newspaper matter costs, and other one-time items, adjusted EPS were $0.09 versus $0.03 in the prior year. Free cash flow available to News Corporation improved by $83 million from negative $10 million in the prior year to positive $73 million in the first quarter.

As Robert noted, the results demonstrate both the breadth of our portfolio and our diversification across geographies, lines of business, and revenue mix. We significantly grew our EBITDA and our free cash flow amid a still challenging ad market, albeit we saw lower declines in Australia and at the Wall Street Journal, compared to the fourth quarter of FY14. The results today are the product of prudent reinvestment, improved market share, and ongoing operating efficiencies.

Just to highlight a few themes, we have been diligent on costs and will continue to look for ways to drive further efficiencies. We're going to reinvest in digital, but that should lead to a more profitable Company. [Also note], within our news and information services segment, we grew EBITDA at News Australia this quarter, thanks to cost management, lower advertising declines, and higher pricing across many of our metro mastheads. While we have been candid about some of the challenges at our news and information services segment, our hope is to show stabilization this year, and I think we're off to an encouraging start.

We're also strengthening two of our core pillars, digital real estate and book publishing, both of which contributed significantly to our strong top and bottom line results this quarter. We believe adding Move to our platform will be another leg to growth and another significant step towards further digitalization of news. We anticipate the Move deal to close in the current quarter, and we'll have more to talk on this next quarter.

We are also very pleased with the integration of Harlequin as we focus both on cost savings and leveraging their foreign language footprint. We also remain very focused on free cash flow, and despite the impact on capital spending related to the Company's London relocation, as well as continued investment spending at Amplify, we still significantly improved our free cash flow versus the prior-year period. Our goal remains to reshape the growth profile of News Corp through prudent investment and cost discipline, and we think the results today are a testament to that.

With that as a brief overview, let's look at the first quarter performance for each of the key segments. In news and information services, revenues for the quarter declined $44 million or 3% versus the prior-year period. Adjusted segment revenues also declined 3%. Within these segment revenues, advertising declined around 7% this quarter, a consecutive improvement from the 9% decline in the fourth quarter of FY14.

Looking at advertising across our key publishing units, at News Corp Australia ad revenues declined around 5%, or 6% in local currency for the quarter, and showed particular strength in September. This is a consecutive improvement compared to a decline of 16%, or 11% in local currency, in the fourth quarter of 2014. We saw strong improvements in the national real estate [and other] categories.

At News UK advertising revenues declined around 6%, or 13% in local currency, relatively consistent with fourth quarter of FY14, impacted by weakness in retail, telecom, and finance. News UK advertising continued to remain challenged through October as a result of general market softness.

At the Wall Street Journal, advertising declined high-single digits this quarter impacted by tougher year-ago comparisons, but we saw an improvement from fourth quarter of FY14, and gained momentum through the quarter led by our digital offerings. Whilst it is early and booking cycles remain short, the Wall Street Journal has shown strong improvement in October driven by two categories, finance and technology.

At News America Marketing, in-store advertising improved 10%, but this was offset by declines in freestanding inserts which had been under pressure in the quarter and continued into October. Total circulation and subscription revenues for the quarter declined 1%, driven primarily by continued softness in professional information business at Dow Jones which had a negative [$30] million impact to revenues this quarter. However, again, this was an improvement versus the fourth quarter of FY14 as we continue to make progress to stabilize and retain existing Factiva customers.

Total newspaper circulation revenues showed modest growth, mostly driven by a subscription and cover price increases across a number of our mastheads to offset print volume declines, although as Robert mentioned, we did see print volume growth at the Times in the UK. We continue to evaluate our pricing across all our mastheads with an eye on both competition and most importantly, consumer value.

To that point, it's worth highlighting that we have recently restructured the subscription pricing for the Wall Street Journal in early October for new customers, which raises the price for the print/digital bundle to $32.99, and for digital only to $28.99, representing a $4 per month increase for both offerings. We've also eliminated the historical discount for digital versus print taking a page from the success of the Times in the UK, as Robert noted.

Segment EBITDA decreased $28 million in the quarter or 21% as compared to the prior-year period, and adjusted segment EBITDA was down 19%. Included in segment EBITDA was $14 million related to the relocation of our London operations for dual rent and other facility costs which accounted for half of the year-over-year percentage decline. Our second fiscal quarter should be the last quarter of the dual rent P&L impact.

Turning to the book publishing segment, revenues improved 24% and segment EBITDA grew 28% versus the prior-year quarter. Reported EBITDA this quarter includes approximately $5 million of Harlequin-related transaction fees. Excluding the results from the Harlequin acquisition which closed on August 1, and the related transaction fees, the impact from the divestiture of the live events business last year, and foreign currency fluctuations, adjusted revenues grew by 6%, and adjusted segment EBITDA by 23%.

Total e-book net sales for the quarter grew 28% and accounted for 22% of consumer revenues. Excluding Harlequin, e-book revenue growth was 8%. The Divergent series continues to sell very well, this quarter totaling over 3.5 million net units, modestly above last quarter and includes the impact from a new title, "Four: A Divergent collection." We also have solid contributions in general books from Steve Harvey's "Act Like a Success" and Daniel Silva's "The Heist" and carryover demanding in Christian publishing from Sarah Young's "Jesus Calling".

This week we announced plans to close our HarperCollins Canada warehouse and consolidate distribution in North America. This is part of our long-term strategy to streamline distribution operations which will lead to significant cost savings. While it's early in the integration with Harlequin, we've been very pleased with the progress to date. We're actively looking for cost saving opportunities in a number of overlapping territories. At this point, we would expect aggregate cost savings to approximate those at Thomas Nelson which was over $20 million, although it will take some time as we exit contractual commitments and renegotiate manufacturing terms to realize the synergies.

We are also beginning to tap into the Harlequin network with the recently announced expansion of our publishing program in Germany with additional markets planned in the future. We also announced a foreign language deal with top author Daniel Silva with others in the pipeline. Finally, we announced a subscription offering for Harlequin with Scribd for backlist titles as we look to further monetize its valuable catalog and leverage HarperCollins' existing digital distribution relationships. As I mentioned last quarter, core HarperCollins does face tough comps this year, due to the success of the Divergent series last year, with the majority of the Divergent units having been sold in fiscal second quarter and third quarter of the prior year.

In cable network programming, revenues improved $7 million or 5% compared to the prior year. Subscription revenues grew 9% benefiting primarily from higher affiliate fees from Foxtel and increased subscribers. Advertising revenues declined modestly, impacted by a soft marketplace and a tough prior-year comparison related to election spending and the absence of two major events that didn't air this year, namely, the Lions rugby tour and the Ashes cricket series. Segment EBITDA in the quarter was up 10% compared to the prior year. Excluding the impact of foreign currency fluctuations, adjusted revenues increased 4%, and adjusted segment EBITDA improved by 10%.

In digital real estate services, revenues increased $22 million or 24% compared to the same quarter last year, reflecting higher pricing and uptake of premium products. Segment EBITDA increased $13 million or 30% this quarter compared to the prior year, primarily due to the increased revenue. Reported results also include roughly $2 million of fees incurred at the end of September for the proposed acquisition of Move. Excluding adverse foreign currency impact and the Move transaction costs, adjusted revenue and adjusted segment EBITDA grew 23% and 32%, respectively.

At digital education, revenues increased $15 million compared to the prior year or 56%, driven by the adoption of our K through 5 print digital hybrid learning products and from higher tablet sales. Segment EBITDA improved $27 million to a loss of $24 million. About $15 million of that was due to the capitalization of software development costs related to our digital ELA product, and the balance from improved top line.

For our other segment, excluding the UK newspaper matter costs, adjusted segment EBITDA was relatively flat at negative $41 million compared to negative $40 million in the prior year. With respect to earnings from affiliates, Foxtel entered the quarter with around 2.6 million total subscribers, up 5% versus the prior year, driven by higher digital platform subscribers. Cable and satellite churn improved to 10.9% compared to 12.1% in the prior year.

Foxtel revenues for the quarter grew 1%, due to the impact of foreign currency fluctuations and growth in subscriber revenues, and EBITDA increased around 2% versus the prior-year quarter, due to the subscriber revenue growth, offset by increased operating expenses resulting from the impact of foreign currency fluctuations. Foxtel launched its new revamped pricing and packaging on Monday, November 3, with an expectation of improvement in cable satellite subscriber penetration over the course of the year. We'll provide an update on progress next quarter.

Turning now to cash flow, News Corp's cash flow from operations improved to $183 million, compared to $59 million in the prior year, and free cash flow available to News Corp improved to $73 million compared to negative $10 million in the prior year. We continue to expect full year CapEx to be relatively similar to the prior year at approximately $400 million, but this includes around $70 million to complete the London relocation and $60 million related to capitalized software at Amplify.

Our corporate overhead and strategy group costs are expected to be at a similar level with that in FY14. At digital education, we continue to expect our total cash investment spend to be relatively similar in fiscal 2015 at over $200 million, including approximately $60 million of capitalized content development costs. EBITDA for fiscal 2015, though, is expected to improve by at least the amount capitalized.

Just to summarize, we believe this quarter demonstrates that News Corp is on the right track, and we are confident that steps we've taken, both investments and cost discipline, are positioning the Company for long-term growth and equally important higher value per share. With that, let me hand it over to the operator for Q&A.

(Operator Instructions)

Our first question comes from John Janedis with Jefferies.

Thank you. Robert, can you give us more color on what you're seeing in print advertising at the Journal? With some of the weakness in national advertising in TV and cable, it's a bit of a surprise. Was the tech money broad? Did it support a particular launch? Does it have legs? On Australia, how are current print trends looking there? Thanks.

John, obviously we're not pretending to be soothsayers, so we're not giving you long-term forecasts, but what we did see in particular at the Journal, both in print but particularly in print but also in digital, was a recovery in finance and tech advertising. That is encouraging. So far, so good this quarter, and we are talking in terms of year-on-year gains.

In Australia, the team under Julian Clarke have done a sterling job in retooling the business. I think partly there the improvement in trading conditions is in large part due to their focus, again, on local advertising. The team is dedicated in its pursuit of clients and its servicing of clients. That has absolutely contributed to the improvement we're seeing there. In a sense, what you've got in Australia now, if you wanted to typify it topographically, is that the Murray River had silted up, and that river is now flowing again.

Operator, we will take our next question, please.

Thank you. We'll go to Tim Nolan with Macquarie.

I wanted to ask about your Amplify division. You mentioned that you're heading into an active selling season. We are a good couple of months into the fall semester with a lot of Common Core sales for schools now underway. I just wondered if you could comment on what you have done, and what you think the timeframe is of upcoming Amplify sales, please.

We have seen sales across five states, a range of districts from Seminole County in Florida to Spokane in Washington. The sales season for us quite frankly will get more intense later in the fiscal year. As the product is rolled out, you, like us in these very public contracts, will have a sense of how we're faring.

Okay. Operator, we will take our next question, please.

Thank you. We will go to Doug Arthur with Evercore.

Yes, Bedi, you talked about the dual rent in London dissipating next quarter. What can you add in terms of the underlying cost trends in news and information for the balance of the year?

I think we've been pleased with the operating efficiencies we've seen at news and information services, particularly in Australia where they've been taking out quite a bit of costs in the backroom operations. I think we would expect that pace to continue for the remainder of the year. The London building this quarter, double rent was $14 million. I think it will be similar for next quarter, and then we're done, so that will obviously dissipate for quarters 3 and 4. There will be improvement just as a result of that.

Operator, we will take our next question, please.

We will go next to Alexia Quadrani with JPMorgan.

Thank you. My question's on your acquisition strategy. You've made two very different acquisitions recently, Harlequin and then Move, one publishing and one in online real estate. You did talk a little bit about what your priorities are in terms of when you look for these deals, and being able to leverage your global franchise when you bring them under your fold. If you could give us any more color in terms of are there certain segments of the markets that you're more focused on versus others, I guess, if are there any other priorities you take into consideration?

Alexia, we made clear at the very first Investor Day that we were particularly interested in digital acquisitions. We would focus on the US and global expansion, and not so much Europe, a little more Asia, for example. In particular, they have to be assets that complement our existing assets. They have to be extensions of our expertise. We have to be able to use our existing platforms in a way to ensure that the new companies become platforms to profitability.

That's very much the case with Harlequin, and it's clearly the case with Move, where in each case, we have an existing skill set. We see, yes, synergies there, but we also see the potential for growth that is real. It's a potential for growth based upon experience and expertise in the Company as it exists, so these are not eccentric purchases. These are extensions of that expertise.

Operator, we will take our next question, please.

We will go to Michael Morris with Guggenheim Securities.

Thanks, guys. With respect to the price changes at the Wall Street Journal, I apologize if I didn't hear this, but when did those price changes take place, or when do they take place? Also, I know you've been sensitive about the impact to subscriber numbers of changing price. What was the pattern that you saw at the Times when you made a similar change there? Thanks.

The new pricing, as I said, for the full package is $32.99, and that came into effect just now in October. It's for new customers, so that's what we've done for the full package. The print and web and mobile is $28.99.

Operator, we will take our next question, please.

From Goldman Sachs, we will go to Adam Alexander.

Good afternoon. Just touching on the Foxtel prices that were launched this week in Australia, it was a 50% cut on the base package. I was just wondering, Robert, if you could give us a bit of detail on what spindown we might see and whether or not that will have a top line impact on Foxtel revenue in the coming quarters?

Adam, it's a little early for us to give you any forecast along those lines. What we can say is the prices have been in operation for a week. Apart from offering discounts to new subscribers, what we are offering are premium packages to existing subscribers. The early inkling that we have is that the call center activity has been encouraging, but I think it's better for us to wait until the next quarter to give you more fully formed figures.

Operator, we will take our next question, please.

We will go to Craig Huber with Huber Research Partners.

Yes. I'm just curious, your Move acquisition, realtor.com, what are you going to do on the management front there with REA? Are you going to lean heavily on the REA management to run this thing? Are you going to use people in-house your existing Company, or you're going to keep the current management in place? How is it all going to work, please?

Clearly, REA's expertise will be of benefit to Move, but we're not going to use that (inaudible) expertise to an extent that it would damage REA itself, and we are very, very conscious of that. I think what you have to understand about Move is that we are extremely confident that we can accelerate growth in traffic and revenue without excessive investment, given the resources we have at our disposal. They're not just REA resources, but when you think about it, the Wall Street Journal digital network, where you're getting a half a billion page view a month, complementing the large number of page views and traffic that you get at realtor.com.

When you look at what a typical real estate advertising website needs, you need a media platform. We have that. You need compelling content. We have that, and you need tech and software expertise. We have that. We have those things without having to excessively invest.

Thank you.

Operator, we will take our next question, please.

Thank you.

(Operator Instructions)

We will go to Andrew Levy with Macquarie Securities.

Thank you. My question was just on Fox Sports. Presumably Foxtel is going to get a pickup in subscribers from the (inaudible) put-through. I was wondering if Fox Sports get a full carry-through from any additional subscriber (inaudible), or whether the deal with Foxtel is being recut to accommodate the changes for their put-through?

To the extent Foxtel picks up a new subscriber who opts for the sports package, there will be a full flow-through into Fox Sports.

[To further say], on past [patterns] about 80% of Foxtel subscribers pick up the Fox Sports package.

Sorry, Robert, I was going to say, have you historically been paid for all Foxtel subscribers, or just the sports package subscribers into Fox Sports?

Andrew, can you repeat that question?

Yes. The question was historically did Fox Sports receive a payment on total Foxtel subscribers, or just on Foxtel subscribers who took the sports package?

People who took a sports package.

Thank you.

Operator, we will take our next question, please.

We will go to Justin Diddams with Citi.

Good morning, guys. Thanks for your time. The question from me is on news and information services. Given the trends you're seeing in each of the businesses, do you think it's acceptable to expect that we can see revenue growth in the back end of the year in this business?

It's probably not reasonable, Justin, to expect us to give you a forecast along those lines. All we can say is the trends last quarter, in particular in Australia, the advertising trend with the Journal in October in recent weeks, these have been positive trends relative to last year.

We are also very frank with you. It is difficult for us to perceive long-term trends at the moment, given that the power of the spot market and therefore in predictive terms the spottiness of the statistics we have at our disposal. What we do have in London, in Australia, and at Dow Jones, the teams are working very, very hard to get the most out of their businesses. They're being very introspective on costs. They're asking all the right existential expense questions, and we're very proud of the effort that those teams are making.

Thanks, Justin. Operator, we'll take our next question, please.

(Operator Instructions)

We will go to Fraser McLeish with Credit Suisse.

Thanks. I'd just like to follow up on the question that Andrew asked on Fox Sports. Could you just confirm? Has there been any change in the amount that you get per Fox Sport subscriber as a result of the overall pricing changes, or is that still the same as it was before? Thanks.

We're not disclosing specific pricing, but generally you can take it that it's along the same lines that we had before.

All right. Thank you.

Thanks, Fraser. Operator, we will take our next question.

We will go to Brian Han with Morningstar.

Hi, thanks. As we think about the Move acquisition going forward and, Robert, you've already mentioned the brand building potency of News Corp itself, but do you have any special marketing relationship with Fox Media properties, or is it all on an arm's length basis?

Clearly, we'll be involved in negotiations with our friends at Fox, but we've got News America Marketing and the freestanding insert business. We have the National Association of Realtors which this year has invested around $30 million in marketing, and we intend to strengthen the relationship to ensure the complementarity of the marketing at NAR and our marketing. Combined, the sum of those parts will be a very powerful platform because we are conscious, quite obviously that marketing can be expensive. When we calculated the benefits of buying Move, clearly we have a comparative advantage when it comes to brand building and traffic driving.

Operator, are there any additional questions?

At this time, there are no further questions in the queue, Mr. Florin. I'll turn the call back to you.

Great. Thank you very much for participating, and we look forward to updating you on our progress the next quarter. Have a good day.

Ladies and gentlemen, that does conclude today's conference. We thank you for your participation.