You could be forgiven for thinking that News Corp was in the doghouse thanks to the massive scrutiny (and criticism) its senior executives are facing in the UK at the moment. But financially, you’d be mistaken: the group has just announced a quarterly rise in profits to 31 March to $1bn (£620m) from $682m the previous year. That’s a rise of 47%. Enough to take everyone’s mind off the ‘not fit to run a company’ lark that kicked off in Britain last week? We’ll see.
The company puts this massive increase in profits down to growing revenues in its Hollywood film making arm and its cable networks (most of this happens in the US). Cable network operations reported third quarter revenue of $846m, a $111m increase over the third quarter a year ago. Its entertainment unit saw almost 10% growth in revenue, at $272m, for which kids film Alvin and the Chipmunks: Chipwrecked takes a lot of the credit. Groupwide revenue for News Corp was up 2% to $8.25bn. That’s a lot of numbers, but they’re certainly all positive for Murdoch, and no doubt for his wallet, too…
Confidence in the business is evidently also strong; shareholders backed Murdoch to remain chairman and CEO last week, thumbing their noses at the culture, media and sport select which committee branded him unfit to run an international company. And with growth figures like these, we reckon they’re not really bothered about the little to-do with the New of the World. Shares in News Corp have risen 10% over the last year.
If this kind of growth isn’t enough to satisfy shareholders, the firm has also decided to double its spend on buying back shares, to $10bn, possibly in part to keep shareholders sweet and to gainsay the rumours that a divestment of the newspapers arm is imminent. Leveson may continue to knock chunks of Murdoch’s reputation, but financially his businesses look in rude good health.