Fox parent News Corp. on Wednesday said that it swung to a $275 million profit last quarter on strong TV and film biz, and execs trumpeted the big ratings bump enjoyed by the Fox net and Fox News over the past year.
Chairman-CEO Rupert Murdoch, who just inked a deal for effective control of DirecTV, said he’s got zero interest in Vivendi Universal assets. And aside from eyeing a few (“You can count them on one hand”) TV stations in big markets, he said, “We do not see ourselves going on a buying binge” if, as expected, the Federal Communications Commission relaxes media ownership rules.
News Corp.’s third-quarter revenue rose 14% to $4.4 billion and cash flow grew 26% to nearly $300 million. Company jacked up full-year estimates, predicting cash flow would jump 30% at News Corp. and 55% at subsid Fox Entertainment for the fiscal year that ends in June.
News Corp. shares outperformed a weak market, closing up 2.04% at $30.08.
Fox slid 0.92% to $27.05.
In cable, profits grew 30% to $95 million — including a 9% boost at Fox News. And chief operating officer Peter Chernin is irked that CNN still commands top ad dollars. “Currently, our rates are below CNN’s, which is a joke,” he said.
At the height of the Iraq war in late March, Fox News was, for a time, the highest-rated network on basic cable. For the quarter, it jumped 69% in total viewers in primetime and 75% overall, according to Nielsen Media Research.
Chernin does expect a nice boost at the Fox broadcast net. “We’re in a much stronger position going into the upfront than we were a year ago,” he said during a conference call. “There’s more stability across more nights and a lot fewer holes to fill. ‘American Idol’ is doing for us what ‘Survivor’ did for CBS.” The net, which will present its fall lineup Thursday, also featured “Joe Millionaire” and “24.”
Chernin said scripted shows would be the foundation of Fox’s new sked. “One of the misconceptions in the broadcast business is that reality shows are so cheap. … They’ve become very high quality and have no repeat value.”
Television profits, including the broadcast network and TV stations, surged to $207 million from $114 million on revenue of $1.13 billion.
Filmed entertainment income rose 25% to $201 million. Revenue rose 10% to $1.17 billion. Company cited video/DVD sales of “Ice Age,” “Brown Sugar,” “One Hour Photo,” “Swimfan” and “The Banger Sisters,” partly offset by marketing costs for “Just Married,” “Daredevil” and “X2: X-Men United.” “X2” has taken in about $270 million worldwide in less than two weeks.
Responding to strong analyst enthusiasm for the film unit, Chernin was cautious, saying, ” ‘Spectacular’ may be a little strong. We’d like to see more, quite honestly.”
In what’s become the mantra of big publicly traded media congloms that own studios, he said, “We want . . . steady, predictable results on releases now on DVD and to make sure we don’t screw it up on the new release side . . . to make sure we release movies that make economic sense and are solidly profitable on their own.”
The same goes for TV, where the goal, he said, is to “create cost-effective new shows . . . and add one or two new shows a year to the syndication pipeline.”
Company said 20th Century Fox Television saw higher syndication revenue from “The X-Files” and “Dharma & Greg”; strong homevideo sales of “The Simpsons” and “Buffy the Vampire Slayer”; and solid ratings for “24,” “The Simpsons,” “King of the Hill,” “Bernie Mac” and “Reba.”
Chernin said he expects cable CPMs (what advertisers are willing to pay per thousand viewers in a particular demo) will be slightly stronger than broadcast CPMs. He wouldn’t predict upfront sales, but sees demand in key categories like autos, financial services, fast food and telecom.
In News Corp.’s other businesses, newspaper income fell 9% to $115 million as a price war in the U.K. continued to take its toll.
Profits at book publisher HarperCollins were about flat at $23 million.
Magazines and inserts profit grew by $4 million to $76 million.