MUMBAI: Rupert Murdoch owned News Corp's net income in the fiscal third quarter ended 31 March 2005 has fallen 8 per cent due to higher programming costs at its Fox broadcast network and loss from restructuring a sports partnership with Cablevision Systems Corp.
Net income fell to $400 million, from $434 million a year ago. Revenue jumped 17 per cent to $6 billion, pumped up by cable advertising at FX and Fox News channel. Operating income also rose 9 per cent to $889 million.
Murdoch could well be pleased with Star's third quarter operating income which increased over 60 per cent as advertising and subscription revenue gains drove total revenue up 10 per cent. Higher revenues came primarily from Star Plus as well as contributions from several new channels in India, including Star One, the company said in a release.
What led to News Corp's decline in overall net income? "Higher consolidated operating income and an improvement in equity earnings of affiliates were more than offset by a $77 million loss recognised on the company's investment in regional programming partners," News Corp said in a release.
Commenting on the results, Murdoch said: "The quarter saw strong performances in our filmed entertainment and cable network programming segments. While the television segment was down year-on-year, reflecting higher programming costs and the soft advertising marketplace in the US, our stations generated record market share and the broadcast network, on the heels of its victory during the February sweeps, is poised to win the broadcast season ratings race for the first time in its history."
The quarterly results were dragged down by a 15 per cent fall in TV operating income to $221 million, largely due to a rise in programming expenses at the Fox network from the Super Bowl.
Cable network programming reported third quarter operating income of $172 million, an increase of $61 million a year earlier. The 55 per cent growth reflects continued advertising and affiliate strength at Fox News Channel and FX, the lack of NHL programming costs at the Regional Sports Networks due to the cancellation of the season and the absence of losses from the Los Angeles Dodgers which was sold during fiscal 2004, the release said.
The filmed Entertainment segment reported record third quarter operating income of $251 million, up 15 per cent versus the $218 million reported a year ago. The current quarter results primarily reflect strong worldwide theatrical revenues and increased contributions from film and television home entertainment releases.
SKY Italia reported a third quarter operating loss of $21 million versus $24 million a year ago on local currency revenue growth of 20 per cent. The improvement versus the prior year primarily reflects strong subscriber additions over the past year with more than 136,000 net new subscribers added during the third quarter alone. SKY Italia.s subscriber base exceeded 3.2 million at quarter end. "The revenue growth was mostly offset by increased programming spending during the quarter primarily due to the broadcast of additional soccer matches and movie titles as well as the addition of ten new entertainment and news channels on the basic programming tier," the release informed.
Murdoch aims to buy Malone's stake in News Corp
Murdoch was quoted in international agencies as having said that he wants to buy all or a portion of Liberty Media chief John Malone's 18 per cent stake in News Corp. The chairmain and CEO of the media giant told analysts that he hoped to resolve the lingering issues with Liberty in the next three months. Commenting on the group's plans for its $6 billion cash reserves, Murdoch said: "We have got various alternative ways to deal with that, but we are not going to make up our mind to do anything until we resolve the Liberty position, which we would expect to do certainly before we get back to you again in three months."
BskyB on target
Beating estimates, BSkyB has added 95,000 net digital satellite subscribers in its fiscal third quarter. Total subscribers has crossed over 7.7 million, indicating that the company is well in line to meet its target of eight million subscribers by 2005-end.
Net income for the quarter rose 5.3 per cent to 119 million pounds, from 113 pounds a year ago. Revenue jumped 9 per cent to 1,015 pounds, up from 931 million pounds.
