News Corp declares $1.6 billion quarterly loss

Published:  9 Aug at 9 AM

Rupert Murdoch’s News Corp empire has been forced to announce a loss for the fourth quarter of the financial year of $1.6 billion. This is compared to a net gain of $683 million made for the same three months a year ago. The company has said that the losses are partly to do with weaker profits from the publishing business and partly to do with a restructuring charge of $2.9 billion.

Mr Murdoch said he hoped to enhance News Corp’s strong financial, strategic and operational position by separating the media and entertainment division from the publishing division.

The publishing business, which owns British papers including the Sun and the Times, made an operating income for the quarter of $139 million. This is a drop from the $270 million declared for the same period in 2011. The division is currently suffering from less being spent on advertising and the closure of the News of the World just over a year ago.

News Corps proposed split will mean the separation of the film and television business into one company and the newspaper and publishing business into another. Mr Murdoch believes that this will unlock greater shareholder value over the longer-term.

The proposal still has to be approved by News Corp’s shareholders, but seeing as Mr Murdoch and his family own almost 40 per cent of the stock it is unlikely to be difficult to persuade 10 per cent of the remaining shareholders to agree to the idea.