×

Holy Rupert empire

News Corp. to unveil its annual earnings Aug. 13

This article was modified on Aug. 13, 2003.

NEW YORK — Getting one’s arms around the labyrinthine, global expanse of News Corp. is a challenge for even the sharpest investor.

As a result, News Corp.’s stock in the last year has generally under-performed that of its fast-charging U.S. offspring Fox Entertainment.

Main story
The Back Lot
Voiceover
Film
Fox TV
20th TV
FX
Fox Sports
Syndie biz
World TV
N.Y. Post
Fox News
Stocks
Video
Vinciquerra

Fox is clearly the stock-market darling, but News Corp. acts as the incubator that could generate the longterm value for shareholders.

It’s a global entity that could drum up income in virtually every country that is film- and TV-receptive — from the U.S. and the U.K. to potential biggies like China and India.

News Corp. will unveil its annual earnings Aug. 13. Operating income for 2003 is projected at $2.5 billion — and 70% of that derives from the U.S., via News Corp.’s 80.6% stake in Fox.

Substantial cash flows also come from its newspaper portfolios in the U.K. and Australia. Some of its most profitable holdings, like BSkyB, aren’t even consolidated in the earnings.

Richard Greenfield of Fulcrum Global Partners ranks News as his favorite media stock play for the long term.

“No other company has that kind of footprint, it’s an unparalleled collection of assets.”

But News Corp.’s best financial years may still be ahead.

The era of making big global investments is largely over; one benefit of the new era is that corporate debt load is more manageable.

“The U.S is relatively mature and government may put pressure on further growth. But India (where News will soon launch a DBS service to support its channels) is now … profitable. China still losing money, but it’s developing,” Greenfield says.

While acknowledging that News Corp. is a complex company to cover, the analyst is a bull on its long-term value due to its willingness to take risks.

Still, Murdoch’s bold investment strategy can sometimes backfire: An expensive foray with the L.A. Dodgers and a $6 billion write-off on Gemstar and TV-Guide are testament to that.