In the UK we think of News Corporation as being the Sun and News of the World and 39 per cent of BSkyB. But arguably its biggest business is the Fox film studio.
It has a new film out in the US called Rio which is doing pretty well but – win a few, lose a lot movies seems a strange business for Rupert Murdoch to be in.
Anyway here’s thewrap’s take on it.
Without the blue skinned aliens from “Avatar,” News Corp. profits plummeted 24 percent during the most recent quarter, the company reported on Wednesday.
News Corp. reported third quarter net income of $639 million ($0.24 per share) compared with $839 million ($0.32 per share) during the same period last year.
Quarterly revenue fell from $8.79 billion to $8.26 billion.
Launch costs for animated hit “Rio” combined with the lack of a certain 3D smash, saw operating income for the company’s film unit fall more than 50 percent to $248 million from $497 million in the year ago period.
In his statement to investors, Murdoch acknowledged that the studio’s underperformance was largely to blame for the sluggish earnings.
“As we anticipated, News Corporation’s third quarter financial results faced challenging comparisons when set against last year’s record Avatar contribution at our Filmed Entertainment business,” Murdoch said in a statment. “However, the great response to Rio and our confidence in our upcoming releases, indicate that the difficult comparisons in this segment over the past nine months are now behind us.”
But the News Corp.’s television and cable business continued to be a strong engine of growth for the company. The television unit’s operating income increased earnings 23 percent to $192 million, an increase of $152 million versus the same period a year ago. That growth was attributable to NFL Playoffs and Super Bowl broadcasts, as well as lower production costs for hit shows such as “American Idol,” the company said.
News is also widely reported as teaming up with Agnelli family interests (the Agnellis used to own Fiat) to bid for Formula One, currently owned by private equity outfit CVC and run by Bernie Ecclestone.
It’s also trying to buy the 61 per cent of UK satellite broadcaster BSkyB that it doesn’t own, a deal that would cost it at least £9bn.
And it’s just forked out £415m to buy Shine, the independent TV production company owned by Rupert Murdoch’s daughter Elizabeth.
Can it afford to do all these things?
Maybe Formula One is an alternative to a very expensive BSkyB.