September 23, 2020

Lacking Blockbuster, News Corp. Falls Short

That seemed to be Rupert Murdoch’s message on Wednesday as his sprawling media company, the News Corporation, reported earnings that largely fell short of most analysts’ expectations. The company’s total revenue for the quarter that ended in March, $8.26 billion, was down 6 percent from the same quarter last year, when ticket sales for the blockbuster film “Avatar” greatly increased revenue.

“Avatar” became the highest-grossing film in history (not adjusted for inflation), but with that title came one downside for the News Corporation: “challenging comparisons,” as Mr. Murdoch put it in a statement, between this year and last year’s earnings. The company’s net income for the quarter, $639 million, or 24 cents a share, was down 24 percent from the same quarter last year, when the net income was $839 million, or 32 cents a share.

Ticket sales for “Black Swan,” a film released last December that scored a best actress Oscar for Natalie Portman, led the film division’s revenue in the most recent quarter. Citing the new animated film “Rio,” which was released three weeks ago but has already earned more than “Black Swan,” Mr. Murdoch said the “difficult comparisons in this segment over the past nine months are now behind us.”

Cable channels like FX and the Fox News Channel remained by far the biggest contributors to the News Corporation’s bottom line, accounting for more than 60 percent of profit. Like other major media companies, the News Corporation enjoyed significant gains in cable advertising revenue over the same time last year — in its case, up 14 percent in the United States and up an average of 18 percent in other countries.

Fox News, which is the most-watched cable news channel in the United States, continues to be a profit center for the company. In the most recent quarter, Fox News recorded its highest-ever operating profit margin, David DeVoe, the company’s chief financial officer, said in a conference call with analysts Wednesday.

The company’s local and national broadcast television division also showed strong results, having mounted a recovery from the recession. It helped that Fox had the rights to the Super Bowl this year and that the eight-year-old “American Idol” franchise has, as Mr. DeVoe asserted, found a “second life” with new, nicer judges.

But attention lately has been focused not on the News Corporation’s television assets, but on underperforming digital pieces of the company. Since last year, it has been attempting to sell Myspace, the ghost of a social network that suffered increased losses in the most recent quarter. Chase Carey, the News Corporation chief operating officer, said Wednesday that an unspecified Myspace transaction is “on course.”

The company is also trying to spin off IGN.com, a portfolio of video game news Web sites, according to AllThingsD, which reported the plan earlier this week.

In its publishing division, the News Corporation is trying to market the tablet newspaper, The Daily, that it introduced on the iPad in February. Mr. Carey said that the company lost about $10 million on The Daily in the quarter and emphasized that “it’s very early days.” He did not share any data about the number of subscribers to the newspaper, but a News Corporation employee was overheard on the conference call saying that the app that delivers the newspaper has been downloaded 800,000 times.

The publishing division posted a steep decline in net income in the quarter because of a $125 million charge related to a legal settlement at News America Marketing, its coupons and consumer marketing outfit. Excluding that charge, the company over all posted earnings of 26 cents a share.

Analysts pressed News Corporation executives on Wednesday on the status of its attempted acquisition of the 61 percent of British Sky Broadcasting, or BSkyB, that it does not yet own. The company is awaiting final approval of the deal by the British government.

If the approval comes — and by most accounts it will come soon — the News Corporation may have to pay more than the $12.4 billion it has already committed. Mr. Carey had little new to say about it, but he reiterated his hope for a “reasonable deal.”

Article source: http://feeds.nytimes.com/click.phdo?i=11655d5b22f94d61d012a5236e6cfa4b

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