DEF: News Corp's 2025 Proxy: Strong Fiscal Year, Governance Updates

News Corporation reports strong fiscal 2025 financial performance, including increased revenues and net income, alongside key corporate governance proposals for its upcoming Annual Meeting.

Summary

• Fiscal 2025 full year revenues increased 2% to $8.45 billion, driven by Dow Jones, Digital Real Estate Services, and Book Publishing segments.
• Net income from continuing operations rose 71% to $648 million compared to $379 million in the prior year.
• Total Segment EBITDA increased 14% to $1.42 billion, up from $1.24 billion in the prior year.
• Net cash provided by operating activities from continuing operations grew 9% to $978 million, and free cash flow increased 6% to $571 million.
• The company completed the sale of Foxtel Group to DAZN in April 2025, receiving a minority equity stake of approximately 6% in DAZN and repayment of outstanding shareholder loans.
• A new $1 billion stock repurchase program was authorized in July 2025, in addition to the existing 2021 $1 billion program, with an intention to accelerate repurchases.
• Dow Jones achieved record full-year revenues of $2.33 billion, supported by 15% growth in Risk & Compliance and 11% in Dow Jones Energy.
• REA Group posted record full-year revenues of $1.25 billion, a 12% increase.
• Book Publishing segment profitability increased 10%, with digital revenues growing 5% due to audiobook sales.
• The Annual Meeting of Stockholders is scheduled for November 19, 2025, to be held virtually, with a record date of September 25, 2025.
• Key proposals for the Annual Meeting include the election of six directors, ratification of Ernst & Young LLP as the independent auditor for fiscal 2026, an advisory vote on executive compensation, and amendments to the Restated Certificate of Incorporation regarding officer liability, corporate opportunity waiver, and forum selection.

Sentiment

Score: 8

Explanation: The filing highlights strong financial performance across key metrics, successful strategic divestitures, and proactive capital allocation through share repurchases. Positive governance updates and executive compensation alignment further contribute to a very positive outlook, despite some underperformance in EPS and FCF targets for the 2023-2025 PSUs, which was offset by strong TSR.

Positives

• Strong financial performance in fiscal 2025, with revenue up 2% to $8.45 billion, net income up 71% to $648 million, and Total Segment EBITDA up 14% to $1.42 billion.
• Significant increases in cash flow, with net cash from operating activities up 9% to $978 million and free cash flow up 6% to $571 million.
• Successful divestiture of Foxtel Group to DAZN, simplifying the portfolio and improving the balance sheet.
• Authorization of a new $1 billion stock repurchase program in July 2025, in addition to the existing program, with an accelerated pace of repurchases, demonstrating commitment to shareholder returns.
• Credit rating upgraded to investment grade across all key credit agencies.
• Record revenues achieved by Dow Jones ($2.33 billion) and REA Group ($1.25 billion).
• Book Publishing segment profitability increased 10%, driven by 5% growth in digital revenues.
• Effective executive compensation program with a majority of NEO compensation at risk and tied to performance, including strong relative TSR performance (81.9th percentile for fiscal 2023-2025 PSUs).
• Active stockholder engagement program, including participation by independent directors, informing company strategy and policies.
• Proactive engagement with generative artificial intelligence, including a multi-year news content licensing deal with OpenAI and negotiations with other major tech platforms.

Negatives

• NA

Risks

• Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially.
• Operational, strategic, legal, regulatory, financial, reputational, cybersecurity, and health, safety, and security risks are overseen by the Board.
• Ongoing civil lawsuits arising out of U.K. newspaper matters.
• Antitrust litigation against HarperCollins and other publishers.
• Grand jury subpoena issued to OPIS by the Department of Justice and a civil investigative demand issued by a state attorney general.
• Copyright infringement litigation with Perplexity and Brave Software to protect valuable intellectual property.

Future Outlook

The company intends to accelerate the pace of stock repurchases under the newly authorized $1 billion program. It plans to continue its strategic transformation towards increasing digital and recurring revenues, advance content licensing partnerships, and further embed artificial intelligence to enhance operations. The long-term environmental goal is to achieve net zero carbon emissions by fiscal 2050.

Management Comments

• Robert J. Thomson has been central in publishing industry efforts to negotiate fair payments from social media and other technology companies for news content, contributing to News Corp's historic levels of profitability since fiscal 2022.
• The Board believes the current leadership structure is effective, provides independent Board leadership, and serves the best interests of stockholders at this time.
• The company believes that compensation for Non-Executive Directors should be competitive and fairly reflect the work and skills required to serve on the Board of Directors of a company of News Corporation's size and complexity.

Industry Context

News Corporation is actively navigating the evolving digital media landscape, particularly concerning generative artificial intelligence and content licensing. The company's strategic focus on transforming its asset mix towards digital and recurring revenues aligns with broader industry trends. The divestiture of Foxtel Group to DAZN reflects a strategic simplification of the portfolio to concentrate on core growth pillars, a common move for diversified media companies seeking efficiency and focus.

Comparison to Industry Standards

• The Compensation Committee considers compensation data and practices of a peer group including Booking Holdings Inc., Omnicom Group Inc., FactSet Research Systems Inc., Paramount Global, Fox Corporation, Sirius XM Holdings Inc., IAC Inc., TEGNA Inc., The Interpublic Group of Companies, Inc., Thomson Reuters Corporation, Liberty Global Ltd., Warner Bros. Discovery, Inc., Netflix, Inc., Zillow Group, Inc., and Nexstar Media Group, Inc.
• The company's revenue and market capitalization were at the 58th and 51st percentiles, respectively, among its fiscal 2025 Peer Group at the time of its selection.
• The company's three-year Total Shareholder Return (TSR) percentile for fiscal 2023-2025 PSUs was at the 81.9th percentile relative to the individual companies comprising the S&P 1500 Media Index, significantly exceeding the 50th percentile target.

Management Changes

Corporate Governance

Legal Proceedings

• Civil lawsuits arising out of U.K. newspaper matters.
• Antitrust litigation brought against HarperCollins and other publishers.
• Antitrust litigation against OPIS, which was successfully settled in May 2025, subject to court approval.
• A grand jury subpoena issued to OPIS by the Department of Justice.
• A civil investigative demand issued to OPIS by a state attorney general.
• Copyright infringement litigation with Perplexity and Brave Software.

Related Party Transactions

• News Corp Australia purchased approximately $0.7 million in advertising from NOVA Entertainment (100% indirectly owned by Mr. L.K. Murdoch) in fiscal 2025.
• News Corp Australia received approximately $1.8 million in advertising revenue from NOVA purchases and production arrangements in fiscal 2025.
• News Corp Australia, Foxtel (until April 2025), REA Group, and NOVA were equity holders in ScaleUp MediaFund 3.0 Trust, contributing advertising space.
• In September 2025, certain trusts for the benefit of Murdoch Family Trust beneficiaries completed a secondary offering of 14,071,293 shares of Class B Common Stock, generating approximately $450 million in gross proceeds to the selling stockholders.

Stakeholder Impact

• Shareholders: Benefit from strong financial performance, strategic divestitures, and new stock repurchase programs. Will vote on key governance proposals at the Annual Meeting. Potential impact from ongoing legal proceedings.
• Employees: Affected by management changes (CFO, CTO) and the company's compensation policies and practices. Ongoing efforts in talent attraction, retention, development, and succession planning.
• Customers: Benefit from continued investment in core growth pillars like Dow Jones, Digital Real Estate Services, and Book Publishing, and advancements in digital offerings and AI integration.
• Regulatory Authorities: Engaged through SEC filings, compliance programs, and responses to legal inquiries such as grand jury subpoenas and civil investigative demands.
• Tech Platforms: Engaged in content licensing partnerships (e.g., OpenAI, Google, Amazon, Meta, Apple) and intellectual property protection efforts, indicating a shift in industry dynamics for content creators.

Next Steps

• Hold the Annual Meeting of Stockholders on November 19, 2025, to vote on director elections, auditor ratification, executive compensation, and proposed amendments to the Certificate of Incorporation.
• File a Certificate of Amendment and potentially a Restated Certificate of Incorporation following stockholder approval of the proposed amendments.
• Continue executing the $1 billion stock repurchase program, with an accelerated pace.
• Continue the transformation to increase digital and recurring revenues.
• Further embed artificial intelligence to support and enhance operations.
• Work towards achieving net zero carbon emissions by fiscal 2050.

Key Dates

Recommendation

The company demonstrated robust financial performance in fiscal 2025 with significant increases in revenue, net income, and EBITDA, driven by its core growth pillars. The successful divestiture of Foxtel Group simplifies the portfolio and strengthens the balance sheet, leading to an investment-grade credit rating. The authorization of a new $1 billion stock repurchase program, coupled with an intention to accelerate repurchases, signals strong capital allocation and commitment to shareholder returns. While some PSU targets were missed, the strong relative TSR performance indicates effective long-term value creation. The proactive approach to digital transformation, AI integration, and intellectual property protection positions the company well for future growth in a dynamic industry. These factors collectively suggest a positive outlook for the stock.

Keywords

News Corporation, Proxy Statement, Corporate Governance, Executive Compensation, Financial Performance, Fiscal 2025, Stock Repurchase, Dow Jones, REA Group, Book Publishing, Foxtel Group Sale, Artificial Intelligence, Media Industry, Shareholder Meeting, Director Election, Officer Liability, Forum Selection, SEC Filing