March 5, 2021

While Reporting Robust Profit, Murdoch Vows to Stay Head of News Corp.

While defending his company as it faces accusations of widespread phone hacking in Britain, Rupert Murdoch insisted on Wednesday that he had the backing of News Corporation’s board and would stay on as its chief executive for the foreseeable future. Meanwhile, his company reported a drop in fourth-quarter profit but a gain for the year.

Buoyed by strong advertising growth at its television division, particularly from the broadcast of Super Bowl XLV on Fox, News Corporation said its net income from April through June was $683 million, down from $875 million a year earlier. The otherwise strong results were sapped by a $254 million loss on Myspace, the social networking site, which the company sold for just $35 million in June, a small fraction of the $580 million it paid for the site six years ago.

For the full fiscal year, which ended June 30, News Corporation earned $2.7 billion, up from $2.5 billion the year before.

“We have the most robust balance sheet in our history,” Mr. Murdoch declared in a conference call with financial analysts and reporters that drew considerably more attention than usual because Mr. Murdoch had not spoken publicly since his testimony before the British Parliament last month. The earnings report — which showed growth across News Corporation’s vast holdings in film, television, publishing and satellite broadcasting — was a testament to the company’s size and diversity.

Yet Mr. Murdoch spent much of his time on Wednesday answering for malfeasance in a small corner of his media empire: The News of the World, the Sunday tabloid he recently closed in Britain after widespread voice mail hacking by its employees was revealed.

He pressed the point that none of the issues at The News of the World had affected the other parts of News Corporation.

“There’s been no material impact on our operations outside the closure of News of the World,” he said. And he once again insisted that the acts were an aberration and not the kind of behavior that he or the company would ever condone.

“We’re all committed to doing the right thing,” he said. “We have taken decisive actions to hold people accountable and will do whatever is necessary to prevent anything like this from occurring ever again.”

As he tried to end speculation that he would be forced to give up his job, Mr. Murdoch also dismissed the suggestion that his son James was at risk of losing his job as a deputy chief operating officer.

“Chase and I have full confidence in James,” he said, referring to Chase Carey, News Corporation’s chief operating officer. “I think that’s all I need to say about it.”

Mr. Murdoch blithely addressed questions about who would replace him, joking that Mr. Carey would succeed him should he meet an untimely demise. “I’m sure he’d get it immediately if I run under a bus,” Mr. Murdoch, 80, said.

Analysts raised what has become a perennial issue for News Corporation: what would it do with its underperforming publishing division, which includes money-losing newspapers like The New York Post and The Times of London. After the hacking scandal erupted, word that News Corporation might spin off its newspapers spread on Wall Street. Mr. Murdoch rejected the notion outright.

“No,” he said. “I’m feeling very confident.” Except for The News of the World, he added, referring to the newspapers, “Everything else is fine.”

Cable television remained an especially powerful engine of growth for the company, accounting for $631 million of its operating income for the quarter and $2.8 billion in operating income for the year — more than its 20th Century Fox Films, the Fox Network and satellite broadcasting divisions combined.

Advertising at its domestic cable channels, which include Fox News, FX and the National Geographic Channel, grew 23 percent over the fourth quarter last year.

Operating income at the film division was helped by strong performers like the computer-animated “Rio,” and grew by 53 percent, to $210 million. But for the year, operating income in film was down 31 percent to $927 million, largely because of the success in 2010 of “Avatar,” which made for difficult comparisons.

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