News Corp Australia chief resigns after less than two years; Newspaper publishers have been under pressure in the wake of rapidly falling print circulations and declining advertising revenues, as readers migrate to the internet

August 9, 2013 6:19 am

News Corp Australia chief resigns after less than two years

By Neil Hume in Sydney

Kim Williams, the head of News Corp’s Australian business, has resigned after less than two years in the job and will be replaced by a former newspaper executive. News Corp said Mr Williams would be succeeded by Julian Clarke, a former chairman of its Herald and Weekly Times division, which publishes Australia’s biggest selling paper, Melbourne’s Herald Sun. Newspaper publishers in Australia have been under pressure in the wake of rapidly falling print circulations and declining advertising revenues, as readers migrate to the internet.Two of News Corp’s major competitors, Fairfax andAPN News & Media, have both carried out equity fundraisings and asset sales over the past year to bolster their balance sheets and offset a decline in earnings.

Rupert Murdoch, executive chairman of News Corp, said Mr Clarke was an “experienced executive with a unique understanding of [the] company’s culture”. He has “the immense energy and clarity of vision necessary to drive our properties forward at this challenging time”, Mr Murdoch added.

The resignation of Mr Williams, a former pay-TV executive, comes just weeks after Mr Murdoch dispatched one of his key lieutenants, New York Post editor Col Allan, to Australia to provide “extra editorial leadership” at a “particularly challenging time”.

Mr Williams was appointed chief executive of News Corp Australia in December 2011, coming to the job from Foxtel, the pay-TV business that is 50 per cent owned by News Corp.

Local media reports on Friday claimed that the catalyst for Mr Williams’ departure was a deterioration in advertising revenues. There have also been reports of tension between Mr Williams and the editors of The Daily Telegraph, Sydney’s bestselling tabloid, and The Australian, a broadsheet, over a decision to centralise editorial and commercial roles.

The significance of News Corp’s Australian division has increased since the group’s profitable film and television assets were spun off into a new company, 21st Century Fox.

News Australia remains the problem child, heavily dependent on advertising revenue [forecast at A$1.5bn in the 2013 fiscal year], with a bulging cost base

– Justin Diddams, Citigroup report

Australia is expected to generate a large chunk of News Corp’s earnings and revenues this year. However, most of it will come from pay-TV assets and REA, an online property listings business.

News Corp’s Australian newspaper assets, by contrast, are struggling to stay profitable, although News Corp is the leading newspaper publisher in Australia, with the biggest selling titles in the three biggest cities. In total it has more than 100 metropolitan, regional and suburban mastheads.

In a recent research report, Citigroup described the Australian newspapers as News Corp’s “problem child”, noting their limited success in developing new sources of revenues such as digital subscriptions.