Moody’s moves News Corp. view to stable

Moody’s Investors Service said it revised its outlook for News Corp. to stable from positive and affirmed all its ratings, including the Ba1 rating on its senior unsecured notes.

“The change in the outlook to stable reflects softening financial performance across most of the company's segments over the last six months which has led to higher-than-expected financial leverage and Moody's expectation for a further decline in EBITDA in the back half of fiscal 2023 amid macro headwinds which will constrain free cash flow to near $260 million (Moody's normalized basis).

Moody's warns it also sees a “rising governance risk with the potential for activists to agitate for shareholder-friendly transactions to unlock equity value and the company has expressed a willingness to consider large M&A transactions which could involve significant debt financing. Management's lack of a public commitment to public leverage targets provides maximum flexibility for these types of transactions,” the agency said in a statement.

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