October 22, 2018

DealBook: BSkyB Plans Share Buyback and Higher Dividend

James R. Murdoch, chairman of British Sky BroadcastingDavid Moir/ReutersJames R. Murdoch won the backing of British Sky Broadcasting’s board on Thursday to retain his role as chairman.

LONDON – British Sky Broadcasting, the satellite television company partly owned by Rupert Murdoch, said on Friday it would buy back some of its own shares and increase the dividend to compensate investors.

BSkyB, as the company is also known, said it planned a share buyback worth £750 million, or $1.2 billion, and would return another £253 million to shareholders through a final dividend of 14.54 pence a share.

BSkyB’s shares dropped more than 15 percent since News Corporation cancelled its bid this month for the 61 percent of BSkyB it does not own because of political opposition following the growing phone hacking scandal at one of News Corporation’s British tabloid newspapers. News Corporation, Rupert Murdoch’s global media empire, would participate in the share buyback, meaning its 39 percent stake in BskyB would not increase.

BSkyB also said its board unanimously voted in favor of keeping James R. Murdoch, Rupert Murdoch’s son and a senior executive at News Corporation, in his job as chairman of BskyB’s board. It was the board’s first meeting since News Corporation was forced to abandon its BSkyB bid.

“It was obviously a very full discussion,” BSkyB’s chief executive, Jeremy Darroch, said on a conference call. “At the end of that, the board was unanimous in its support for James to continue as chairman.”

Pressure on James Murdoch and BSkyB’s board to replace him had mounted ever since the appearance of new allegations of phone hacking at the British tabloid The News of the World, which fell under James Murdoch’s remit at News Corporation.

Mr. Darroch told the BBC in an interview on Friday that James Murdoch “got strong support” at BSkyB. He added that judging by his work at BSkyB, “he always acted with the highest degree of integrity.”

But some shareholders, including large British pension funds, have criticized BSkyB’s choice of chairman in the past, saying they would prefer a chairman who was not directly linked to the company’s largest shareholder, News Corporation.

There were signs that the phone hacking scandal also hurt other parts of the Murdoch media empire beyond The News of the World, which was shuttered.

The Times of London lost some subscribers in the immediate aftermath of the phone hacking scandal, James Harding, editor of the newspaper told the BBC on Wednesday. “We saw small number of people cancelled their digital subscription or print subscription,” Mr. Harding said. “Those have largely come back.”

BSkyB, which owns several satellite channels, said on Friday that operating profit for the full year that ended in June rose 23 percent to £1.07 billion from £872 million a year earlier. That beat the average £1.06 billion in profit analysts surveyed by Thomson Reuters predicted. BSkyB’s shares rose 0.5 percent in London on Friday.

“Recent hysteria may have affected the share price,” Richard Hunter at Hargreaves Lansdown Stockbrokers in London wrote in a note to clients. “But the underlying business remains defiantly strong.”

Article source: http://feeds.nytimes.com/click.phdo?i=d813281065faa0b3086117be7eb553dc

Gannett Newspaper Revenue Falls 6.5% in Weak Ad Climate

In the latest sign that the industry has yet to recover from an advertising slump, quarterly profit and revenue at the newspaper company Gannett fell.

Gannett, the largest newspaper chain in the United States, said Monday that total revenue was down 2.2 percent to $1.33 billion in the second quarter. The figure was in line with the average analyst forecast, according to Thomson Reuters.

Gannett, which publishes USA Today and 81 other newspapers, said ad revenue at its newspapers dropped 6.5 percent to $646.9 million as retail, automotive and national advertisers pulled back on their spending.

Advertising revenue this quarter is “getting off to the same start” as the second quarter, Gracia Martore, president and chief operating officer of Gannett, said in a conference call.

The company also doubled its quarterly dividend and reinstated its $1 billion share buyback.

Gannett posted a profit of $151.5 million, or 62 cents a share, compared with $195.5 million, or 73 cents a share a year earlier.

Excluding costs for facility closings and job cuts and a net tax benefit, Gannett posted a profit of 58 cents a share, beating analysts’ forecast by a penny.

Gannett cut 2 percent of its work force, or 700 employees, at its American newspaper division in June, citing a sputtering economic recovery weighing down national and local advertising.

Derek Maupin, research analyst at Hodges Capital management, which holds shares in Gannett, is slightly concerned about Gannett’s print advertising but believe shares are still undervalued at its current price. He cited increases in other segments like broadcasting revenue.

At the company’s broadcast division, total revenue inched up to $184.4 million compared with $184 million in the same quarter a year ago.

TV revenue was up slightly to $177.7 million and the company forecast the percentage decline in the third quarter to be in the midsingle digits.

Digital advertising rose almost 13 percent to $173.4 million, the company said.

The company doubled its dividend to 8 cents a share. It expects to repurchase $100 million in shares over the next 12 months, as part of the $1 billion share buyback originally approved five years ago.

Article source: http://feeds.nytimes.com/click.phdo?i=5a3714ee83a08ccc6227ae2352a9b71e