News Corp profits double, but NotW costs continue
By Michael Northcott Thursday, 07 February 2013
Rupert Murdoch's News Corporation has announced that profits have more than doubled compared with the previous year, but it also spent another £56m on phone-hacking fallout.
Rupert Murdoch may have given a lacklustre performance at the Parliamentary hearings over phone hacking, but his company is still doing pretty well - it has just announced that net income for the three months to December 2012 was £1.52bn, just over double its profits for the same period the previous year.
The firm puts the growth down to a successful period at its cable television operations, which include Fox TV, but also the movie business’ release of Life of Pi, which has hit the $500m mark in the box office.
In a statement, the big man himself said: ‘The strategies we executed against in the quarter continue to bolster News Corporation’s competitive position and enhance our ability to benefit from global demand for content, especially sports programming.’
He added: ‘As we make progress toward the proposed separation of our entertainment and publishing businesses later this year, I am confident in the future prospects for both businesses.’
Yes, that’s right, there is a lot of change about to take place at the media monolith. But why break the company up when it is evidently financially in great shape? Well, it’s all about the bad press.
The publishing operation, which includes the Wall Street Journal, The Times and The Sun, has been heavily scrutinised over the last two years thanks to the phone-hacking scandal, which resulted in the closure of the News of the World.
Murdoch has come under increasing pressure from shareholders after News Corp’s bid to buy the share it didn’t already own in British Sky Broadcasting fell through –many put this failure down to the reputational damage done by the firm’s British newspaper scandal.
If the companies are eventually listed separately on the stock market, which one will shareholders flock to? Whatever is being said behind closed doors, there is definitely a sense that Murdoch is ‘ring-fencing’ the entertainment side to protect it from the legal repercussions of the phone hacking scandal.
Anyway, back to the here and now. News Corp has beaten market expectations with the results published today, but so did its main rivals Time Warner and Disney – looks like the entertainment business has come out the other side of the world’s economic woes…