ADELAIDE, Australia — In unusually candid remarks to shareholders, News Corp. chief executive Rupert Murdoch today said the global media conglom had endured a downbeat fiscal year due in part to “a couple of stinking films” and “disappointing ratings” at the Fox Network.
Flanked by his newly elevated scion, 29-year-old deputy COO Lachlan Murdoch, and president and COO Peter Chernin, Murdoch said the film division had “a particularly disappointing year,” later adding “our greatest dilution came from making a couple of stinking films.”
“I think we made some mistakes in the films we made and we took some pretty nasty losses,” Murdoch said, but added things were picking up thanks to titles like “X-Men” and “Big Momma’s House.”
The Fox Network had “a disappointing year with disappointing ratings,” Murdoch said, despite investing a lot in programming and recruiting new execs, but he was confident of “a much stronger position” in the new calendar year.
“We had a bad first quarter for the network and had to spend a great deal promoting awareness and our programming and network advertising was generally pretty poor, but our stations and cable channels have done well,” the 69-year-old media titan said.
Murdoch added News Corp’s 23 U.S. TV stations were “having a great start to the year, but I have to say the immediate future looks a little uncertain with some signs of weakening in the next couple of months.”
Murdoch said pan-Asian satcaster Star TV is “reducing losses, I know I keep telling you that, but it’s already making money in India on Star Plus, thanks to a well known program called ‘Who Wants to be a Millionaire’ taking our channel from a lowly position to absolute domination.”
While limited by SEC rules from commenting in detail on Sky Global’s upcoming IPO, which he hopes will be “a company-transforming event,” Murdoch said News Corp. was conducting negotiations with potential strategic partners including DirecTV and EchoStar.
“We along with other people have been talking to them,” he said. “Either one would be welcome to join us.”
Admitting Vivendi’s need to sell its BSkyB stake was a complicating factor, he said Vivendi may end up with some Sky Global stake in return for exiting BSkyB but would have no active management of Sky Global.
When asked about stock market volatility affecting the Sky Global IPO, Murdoch said, “I’m glad I wasn’t out there last week.”
Such volatility and fluctuating currency values led him to say, “I don’t know what our outlook is like for the next nine months.”
Looking fit and tanned, Murdoch said he had no plans to retire and swatted off with good humor questions about dividends and executive salaries and share options.