Entcho Raykovski

Entcho Raykovski followed up on the AI discussion, inquiring about News Corp's comfort with the investment required for Dow Jones to address AI threats, asking for quantification of technology-linked CapEx, and whether tools like Claude Legal pose a negative impact on operations.

Answer

CEO Robert Thomson expressed full confidence in the Dow Jones Professional Information business, citing its unique, contemporary, and high-margin information, and a limited AI threat. He noted that News Corp is not a collection of legal case studies but contemporary content, and highlighted existing AI deals and ongoing negotiations. CFO Lavanya Chandrashekar added that total CapEx is expected to be moderately up this year, but Dow Jones-specific CapEx will be modestly down, with strong free cash flow growth anticipated. She also invited attendees to the Dow Jones Investor Day.

Entcho Raykovski, Managing Director and Media & Telco at Evans and Partners, followed up on the AI discussion, asking about News Corp's comfort with investment in Dow Jones, particularly CapEx linked to technology, and whether tools like Claude Legal pose a negative impact on operations.

Answer

Robert Thomson, CEO of News Corp, expressed full confidence in the Dow Jones Professional Information business, citing its unique, high-margin, contemporary content and limited AI threat, emphasizing it's not a collection of retrospective legal case studies. Lavanya Chandrashekar, CFO of News Corp, added that total CapEx is expected to be up moderately this year, but Dow Jones-specific CapEx will be modestly down, while still projecting strong free cash flow growth. She also invited participants to the upcoming Dow Jones Investor Day.

Entcho Raykovski of Partners followed up on the Dow Jones segment, asking about the expected financial impact of the Factiva dispute in Q4 and the potential for long-term margin expansion.

Answer

CFO Lavanya Chandrashekar stated that the impact from the Factiva dispute should lessen in Q4 as the company begins to lap the issue. Regarding margins, she explained that growth in the high-margin Professional Information Services business, operating leverage from the consumer business, and cost discipline are the key drivers for expansion. CEO Robert Thomson added that as the professional business grows its share of revenue, the overall margin should continue to expand.

Entcho Raykovski asked about the planned use of proceeds from the Foxtel sale, specifically whether the focus would be on capital management, such as buybacks, or reinvestment into the business, and if there was any guidance on future CapEx.

Answer

CEO Robert Thomson emphasized a focus on maximizing long-term shareholder value, highlighting the existing $1 billion buyback program and dividend payments. He noted that the company's increased free cash flow and new investment-grade credit ratings provide significant optionality for shareholder returns.

Entcho Raykovski asked a two-part question regarding underperformance in Dow Jones advertising and the timing of a potential recovery, and also requested the current balance of the Foxtel shareholder loans after a recent repayment.

Answer

CEO Robert Thomson attributed advertising softness at Dow Jones to election-period apprehension but noted an expected increase in digital advertising in the current quarter. CFO Susan Panuccio provided the specific figure for the Foxtel loan, stating the current balance is AUD 545 million.