Australia’s pay-TV leader Foxtel has made 200 staff redundant, as it struggles to cope with the impact of coronavirus and the changing media landscape. It has also put 140 additional staff, mostly in its Fox Sports division, on leave until June.
The company, 65% owned by News Corp. and 35% owned by phone company Telstra, operates a mixture of movie and sports channels. But it has been live sports that allowed it to charge premium prices and retain subscribers in recent years when customers have cut the cord or turned to streaming services, such as Netflix and local player Stan, for cheaper film and TV content.
The coronavirus outbreak has caused the cancellation of most sporting events in Australia and abroad, thus eliminating Foxtel’s competitive advantage. It has made several recent attempts to make its content packages more attractive, including slashing monthly prices, and offering its 10 movie channels for free to its sports subscribers until the end of June. Foxtel launched its own OTT service Kayo, but this too is understood to have been hit with redundancies.
“The actions we have had to take this week make it one of the toughest in Foxtel’s history,” said CEO Patrick Delaney, in a letter to staff. Before the redundancies, Foxtel had a headcount of 2,800.
“Restructuring and changing the way the company works is not an easy thing to do at any time. But with the impact of COVID-19, the only option is to act now to ensure we ride out the current situation and remain strong to compete with local and global media companies.
“The government’s COVID-19 restrictions are seeing major challenges for us, including the broadcast and streaming of live sport. And looking ahead, the economic outlook for Australia is deteriorating and our continued transformation will become even more important.”
“We need to be prepared for a scenario in sport where season starts are delayed further. It is clear all codes are struggling with significant financial challenges and we should anticipate that the future shape of sport in Australia will be very different.”
Sports leagues around the world are struggling with questions not only of when to resume play, but how to complete seasons and cup competitions that were halted by lockdowns and other social distancing measures introduced to combat the virus. Current seasons could be abandoned, shortened or league positions frozen as they were at the time of the halt. New seasons may have to be delayed.
The Australian Football League is reported to be looking at 12 different scenarios for how to finish the current, unfinished season of Australian Rules Football. Australia’s National Rugby League is examining the possibility of restarting its season with games played in stadia that are sealed off from the public.