Cable kicks up News Corp.'s net income
News Corp. chief operating officer Chase Carey slammed a U.K. parliamentary report calling Rupert Murdoch unfit to lead a major media company and said there’s been no spillover with advertisers Stateside from the phone hacking scandal still raging in the U.K.
“I flatly reject the notion that Rupert is unfit,” he said Wednesday, opening a conference call to discuss fiscal third-quarter results. The News Corp. chairman has “taken enormous business risks,” he said, particularly in the U.K.,” where the conglom has created thousands of jobs.
Carey said there’s been no consideration of having James Murdoch ankle as News Corp. deputy chairman or BSkyB board member, although the satcaster has sought to distance itself from Murdoch’s son, who was running News Corp.’s U.K. publishing when the scandal erupted last summer but is back in New York.
Asked about ripples from advertisers across the pond in the U.S., Carey said, “In all honesty we’ve seen none, and I’d be shocked if there was.”
News Corp.’s net income jumped 47% in the March quarter to $937 million on strong gains in cable and despite an additional $63 million charge for the ongoing U.K. investigations.
The conglom’s revenue nosed up 2% to $8.4 billion, subdued by tough broadcast comps vs. the Super Bowl on Fox the year before. (The game aired on NBC this year.)
Satcaster Sky Italia shed subscribers. “This is probably one of the most challenging periods the Italian economy has faced in decades,” Carey said. “Consumers are deeply concerned about their short-term futures. Various austerity measures affecting Southern Europe are having an impact.”
Twentieth Century Fox saw profit rise by $24 million to $272 million on the worldwide theatrical and domestic home entertainment perfs of “Alvin and the Chipmunks: Chipwrecked” and “The Descendants,” worldwide homevid perf of “Rise of the Planet of the Apes” and the pay TV perf of “Rio.”
The quarter also reflected higher digital distribution revenues for the TV studio, higher license fees for “How I Met Your Mother” and more syndication revenue for “Family Guy.”
Cable networks saw income rise 15% to $846 million led by double-digit growth at the regional sports networks, FX, Fox News and the company’s international channels.
Cable revenue was up 16%. Advertising revenue rose by 10% at the domestic networks. Affiliate revenue was up 15%.
Broadcast television profits fell $21 million to $171 million, reflecting the absence of advertising revenues and operating profit generated from the broadcast of Super Bowl XLV the prior year. The decline was partially offset by a doubling of retransmission consent revenues. Excluding the absence of the Super Bowl, ad revenues at the TV stations and broadcast network were essentially in line with the year before as higher national advertising pricing was offset by lower ratings, driven by declines at “American Idol.”
“Next year we have to give it enough energy and excitement to sustain it. The reality is that it’s an 11-year-old show,” Carey said.
Publishing profit rose by $94 million to $130 million on a major onetime charge the year earlier. Excluding that, income fell by $31 million on lower advertising revenue at the Australian and U.K. newspapers and the absence of contributions from the shuttered News of the World in the U.K.
The decline was partially offset by improved contributions from Dow Jones, HarperCollins and the integrated marketing services business.
Sky Italia income doubled to $40 million. Revenues rose 4% on higher advertising and subscription revenues. But its quarter-end subscriber base declined to 4.94 million reflecting a net loss of about 86,000.