News Corp wrestles underpayments headache as dollars dry up

In this edition of On Background, the media union investigates pay irregularities at News Corp, Lachlan Murdoch’s corporate divorce, and a potential white knight emerges for The Roar

Money talks on Mahogany Row

With Foxtel out the door, ads and subscription revenue down, plus no cash coming in from Meta, it’s safe to say the dollars aren’t flowing freely into Holt Street, News Corp’s HQ in Australia. The company’s local filings showed a net loss for the second year running this week.

Published late on Wednesday, the accounts showed a net loss after tax of $27.4 million for the year, while growth of digital subscriptions for the news mastheads has slowed, finishing the financial year at 993,000, adding just 25,000 across the year.

But it seems News has another headache in the pipeline, having recently handed over a stack of documents to the media union, which suspects the company has underpaid a significant number of staff over the past decade.

The MEAA is inspecting an initial tranche of timesheets and wage reports, provided by News, relating to its Melbourne-based staff, which were requested under the Fair Work Act. And the union is preparing a much wider request, spanning at least 120 union member staff, with the list of affected staff likely to grow longer, On Background was told

The MEAA’s suspicion relates to News’ remuneration for staff working overtime, particularly as they are required to pay any staff member working more than five shifts in a seven-day week double for any additional days worked. The bill for News could be in the millions if the union’s suspicions are proved true.

While News doesn’t have anywhere as near a unionised workforce as the ABC, Guardian or Nine Publishing (owner of this masthead), it is still one of the largest employers of journalists in Australia, giving the MEAA a decent representation inside business.

But MEAA media director Cassie Derrick tells On Background that the excessive and potentially unsafe hours many News Corp journalists have allegedly worked without fair compensation is a direct result of how many staff members News has made redundant over the past decade.

“If News Corp insists on sacking the bulk of their workforce and then working the remaining staff to the bone, they need to pay up,” Derrick says.

News Corp redundancies don’t make news as often as the other companies that make swaths of redundancies in one fell swoop. When Nine made 200 staff redundant in 2024, staff from across the publishing division went on strike for five days.

News is known for a “death by one thousand cuts” approach, with staff out the door in a constant flow, meaning it can avoid headlines.

“We have engaged with the MEAA regarding questions they have raised about additional editorial shifts and have invited them to let us know of any claims of underpayment, which they are yet to do,” a News Corp spokesperson said.

Underpayments and rostering issues aren’t limited to News Corp. In 2022, Nine back-paid a number of staff after underpayments across a six-year period. Seven is facing a current class action lawsuit over underpayments, while the ABC has also faced underpayment issues and is being challenged in the Federal Court over its use of fixed-term contracts.

The corporate divorce

Fresh off his family feud, Lachlan Murdoch has now endured a corporate divorce with his most trusted aide and consigliere, Siobhan McKenna.

Just a week ago, I touched on the juncture in Siobhan McKenna’s career in a profile for Good Weekend. Moving on from Foxtel, McKenna was always expected to focus on more top-level discussions, rather than just the nitty-gritty of Sky News.

Last week, McKenna joined the Murdochs’ inner circle in Los Angeles at the annual get-together at Lachlan’s $150 million Beverley Hills mansion, Chartwell.

But on Thursday morning, global News Corp boss Robert Thomson announced that McKenna was exiting the business, and shortly afterwards, this masthead reported there would be a complete split, with her also set to leave Murdoch’s private investment vehicle Illyria and its radio company Nova.

That’s an unexpected end to Murdoch and McKenna’s 20-year working relationship.

At just 53, McKenna has many years left in corporate life. But within just a few months, she’s given up gigs running Foxtel, Sky News and Nova, leaving her only prominent position as chair of Australia Post. Australia’s busiest executive now has plenty of time freed up to write the second novel she’s been working on.

Keen to focus on non-executive roles, McKenna’s three-year appointment at Australia Post expires in December. Having done a decent job, including keeping it out of the headlines, and with a fan in the PM, it’s likely the government will give her an extension (if she wants it), On Background was told this week.

Both Murdoch and McKenna have benefited professionally from their relationship over the past two decades. Murdoch could say he’s a successful businessman in his own right, and McKenna built her reputation as one of the most powerful and connected executives in Australia.

There’s no doubt she will swim, not sink, in life outside the Murdoch ecosystem. There isn’t a politician or executive in the country who wouldn’t return her call, aside from maybe those she’s clashed with in the past few decades. Don’t discount the AFL tapping her up for her broadcasting expertise, having brokered its most recent rights deal.

Power vacuum

The split leaves many questions on the table. First, was there a falling-out between the pair? As reported in Good Weekend, there was speculation within News Corp that she would pay a price for the family trust case blowing up in both Lachlan and Rupert Murdoch’s faces, but the messaging in the immediate aftermath of the settlement deal was that she had been forgiven.

The second question is whether Lachlan uses this moment to sell Nova. It’s a profitable company, sure, but like every legacy media company, it has its challenges. Finding a replacement for McKenna is one challenge Murdoch hasn’t had to deal with to date, and he could use the cash after selling off voting shares in Fox and News Corp to fund his $5 billion family deal.

Questions have also been raised as to where this leaves the reporting lines of Paul Whittaker, Sky News chief executive, particularly with a move to Holt Street scheduled in coming months. On Background has heard speculation that Whittaker will report to New York, but that is unconfirmed.

A colourful journo Roars again

If you caught our investigation into the web of companies fighting for control of ailing sports website The Roar last week, you’d think the list of colourful characters involved were fit for a gossip or entertainment magazine.

But there has been another development in the week since that story was published. It appears that one of Australia’s most famous journalists (outside of Australia), Dylan Howard, has popped up as a potential white knight for The Roar, various sources tell On Background. Like many factors in this story, it is unclear exactly what his involvement is.

Howard is something of an enigma in Australian media. A former sports journalist from Geelong who made his name at Network Seven, he moved to America to pursue a career in entertainment journalism, gaining a reputation for skulduggery and scoops, and getting accused by Jeff Bezos for extortion after claiming to have a “below the belt” (dick pic) of the Amazon founder. He was also named as a co-conspirator in Donald Trump’s hush-money criminal trial in 2024, so it’s safe to say that he is one of our more interesting journalism exports.

He is reportedly back living in Australia and runs his own media company but apparently wants to add The Roar to his list of assets, such is his lifelong love for Australian sports.

Contacted about Howard’s potential involvement, Miro Mikrut, sole director of Fan Media, which has operated The Roar ”under licence”, said Howard has no intentions to invest.

Howard also called the speculation incorrect, adding that The Roar “appears to be caught up in a very opaque dispute” and he has no interest in investing.

A new spotlight

Former 7News Spotlight reporter and Sky News investigative journalist Taylor Auerbach is launching a new podcast, The Hearing – his take on legal and media news in Australia.

He’s no stranger to either subject, having been a late entry into Bruce Lehrmann’s defamation trial last year. He’s now suing Seven himself, claiming the company made disparaging comments about him following a blow-up between him and his former colleague Steve Jackson, now media writer at The Australian, that shone a proverbial spotlight on the efforts the show went to in order to secure an exclusive interview with Lehrmann.