The release of HarperCollins’s third quarter results by parent company News Corp on May 8 was accompanied by News Corp CEO Robert Thomson’s observations about the realignment of the company the current economy, and the integrity of Big Tech.
During the quarter ended March 31, News Corp completed the sale of its Foxtel subsidiary and is now built on three main businesses, Thomson said, promising that the company will “concentrate investment on three core pillars of growth; Dow Jones, digital real estate, and book publishing.” He did not rule out making acquisitions to bolster each of those groups, but said News will not "overspend" in doing so.
Thomson’s view on the current economy gave mixed grades to the Trump administration. News Corp’s “potent results come despite political turbulence that has clearly affected some of our business partners and undermined their ability to plan coherently,” Thomson said in a conference call. “We firmly believe that this disruption is [temporary] and that the U.S. has the potential for robust growth when the heavens return to equilibrium.”
While he praised the administration's “pursuit of sensible deregulation and a sound energy policy,” he added that, “when Adam Smith spoke sagely of the power of the invisible hand, he did not envisage an economic slap in the face from the unruly introduction of exorbitant tariffs. America's animal spirits do need emancipation from the cage of uncertainty.”
Turning to AI, Thomson said News Corp has been pleased with its deal to license content to OpenAI, and hoped that “other operators strip mining our intellectual property fully appreciate their responsibilities to our company, to creativity, and to the community.” He added that, after a trip to China, he is convinced America’s comparative advantage is not in chips or computing, but in creativity and thinking, declaring: “It would be shameful if big digital players undermine that source of strength by eviscerating IP rights.”
In making the case for strong enforcement of copyright laws, Thomson pointed to the monetary loss President Donald Trump could personally experience due to piracy. AI companies are stealing so much content, Thomson asserted, “they have no doubt ripped off even the President of the United States Donald Trump by ingesting books including The Art of the Deal and repurposing them for profit without his permission.” He added that AI will surely pirate content from Trump’s Truth Social platform, “to fuel their economic engines.”
HarperCollins’s results were relatively subdued compared to Thomson’s remarks. After a strong first half of the fiscal year ending June 30, 2025, sales in the quarter rose only 2% over the comparable period a year ago, to $514 million from $506 million. Sales include the negative impact of foreign currency translations that were somewhat offset by sales from the November purchase of German guidebook publisher Grafe und Unzer. Profits in the quarter rose 3%, to $64 million.
Rapid growth of digital audiobooks has been a big driver of sales for HC, but the rate of growth of the format slowed in the quarter, with chief financial officer Lavanya Chandrashekar explaining that audiobook sales from this point on reflect the boost Spotify’s 2023 entrance into the market gave to the category. Total digital sales rose 3% in the quarter and accounted for 25% of HC revenue, the same as in fiscal 2024.
Both Thomson and Chandrashekar cited expected softness in frontlist sales as a factor in the slowing growth rate as well. Backlist sales accounted for 65% of sales, compared to 63% a year ago. HC’s UK division had a strong quarter, as did HC's Christian publishing group, where sales were once again led by Bibles.
Though Thomson ticked off a number of new titles HC is expecting to do well in the quarter, Chandrashekar warned that the publisher “will face particularly difficult comparisons in the fourth quarter compared to the prior year.” For the first nine months of the current fiscal year, revenue was up 5%, to $1.65 billion, and earnings rose 15%, to $246 million.
