Carey: Retrans To Lift Fox To New Heights

The New York-based media giant controlled by Rupert Murdoch said Wednesday that net income in the fiscal first quarter, which ended Sept. 30, rose 36% to $775 million. COO Chase Carey said hard stands with cable and satellite companies were necessary to "set the market" for Fox stations and bring broadcasting to a "new level of profitability."


NEW YORK (AP) — News Corp. is benefiting from political ad spending and a hard-nosed bargaining strategy with pay-TV operators, as gains in its TV and cable segments helped net income grow in the latest quarter.

The results beat the forecasts of analysts and mirrored the upbeat tone of Time Warner Inc., another media company that earlier Wednesday reported better-than-forecast earnings on a broad-based ad recovery.

The New York-based media giant controlled by Rupert Murdoch said Wednesday that net income in the fiscal first quarter, which ended Sept. 30, rose 36 percent to $775 million, or 30 cents per share, from $571 million, or 22 per share, a year ago.

Excluding a one-time tax benefit of 3 cents per share, the adjusted 27 cents per share of earnings still topped the 24 cents expected by analysts polled by Thomson Reuters.

Revenue grew 3 percent to $7.43 billion from $7.20 billion, also topping analysts’ estimates for revenue of $7.42 billion.

News Corp. also reaffirmed its full-year outlook for “low double-digit” percentage growth in adjusted operating income above the fiscal 2010 result of $4.46 billion.


Shares of the company’s Class A shares jumped 46 cents, or 3.1 percent, to $15.40 in after-hours trading after the release of results Wednesday. They closed up 23 cents, or 1.6 percent, at $14.84 in the regular session.

The company recently concluded tough negotiations with Dish Network Corp. and Cablevision Systems Corp. In Dish’s case, News Corp.’s Fox blacked out cable channels such as FX and regional sports networks to 14.3 million subscribers for a month. Fox played hardball and cut broadcast signals for two weeks, blocking out two games of baseball’s World Series to Cablevision’s 3 million customers. Deals were reached last week to end both blackouts.

At the start of the year, Fox also ended a noisy fee fight with Time Warner Cable Inc. that threatened college football.

Chief Operating Officer Chase Carey said the hard stands were necessary to “set the market” for Fox broadcast signals. News is pushing to transform its free-to-air Fox broadcast signal into a dual-revenue stream network that, like its cable channels, benefits both from fees paid by TV signal distributors and from advertising revenues.

“Over the next couple of years as we continue to close new agreements, we will be taking this business to a whole new level of profitability,” he told analysts on a conference call.

Fox News Channel continued its dominance, as the company said it drew more viewers in prime-time and over the course of the day than CNN, MSNBC and CNBC combined.

Its newspaper business, which includes The Wall Street Journal, also rebounded, benefiting from a 13 percent gain in advertising revenue.

Losses grew at its “other” segment, which includes its recently revamped social networking site MySpace. Carey said the effort to boost audience and revenues at the site while putting it on a path to profitability will be judged “in quarters, not in years.”

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