News Corp. Posts Loss on Publishing Write-Down

Fox Cable unit helps offset restructuring charges

News Corp. on Wednesday reported a significant fourth-quarter loss, as restructuring charges and costs related to the ongoing investigation of the U.K. phone-hacking scandal took a bite out of the company’s operating income.

In the three-month period that ended on June 30, News Corp. posted a net loss of $1.55 billion, or -64 cents a share, compared to a net profit of $683 million, or 26 cents a share, in the year-ago period.

The results included $2.9 billion pre-tax impairment and restructuring charge, primarily related to the company’s publishing businesses.

News Corp. took a $57 million charge for costs associated with the investigation into the phone-hacking and bribery scandals at its now-defunct London tabloid The News of the World. For the entire fiscal year, the company took a $224 million hit.

As is generally the case, the Fox Cable unit shone brightest. A strong showing at FX, Fox News Channel and National Geographic Channels helped generate $792 million in operating income, up 26 percent from $631 million in the prior-year period. Affiliate revenue at the cable unit grew 16 percent, while ad sales revenue was up 5 percent.

For the period spanning July 1, 2011 to June 30, 2012, the cable unit generated $3.3 billion in operating income, up $535 million, or 19 percent. Affiliate revenue for the fiscal year improved 12 percent, while ad sales were up 9 percent.

The Fox Broadcasting unit reported quarterly segment operating income of $213 million, a decline of 9 percent versus $233 million in Q4 2011. Fox was particularly hampered by disappointing ratings at its American Idol flagship, which negatively impacted the broadcaster’s ad sales performance.

Per Nielsen live-plus-same-day data, season 11 of Idol averaged 17.3 million total viewers and a 5.1 in the all-important adults 18-to-49 demo. And while those deliveries made Idol the No. 2 TV series, trailing only NBC’s Sunday Night Football in the dollar demo (8.0), last season was down 25 percent in total viewers and 32 percent among the 18-to-49 set.

Idol’s underperformance spurred Fox to clean house, pushing aside two-season vets Steven Tyler and Jennifer Lopez in exchange for Mariah Carey. The singer will earn a reported $17 million for her first season as an Idol judge.

Fox closed out the 2011-12 campaign ranked No. 1 among all broadcast networks. That said, its average 3.2 demo rating in prime marked a 9 percent decline from the previous year. With a median age of 46 years, Fox draws the youngest audience of the Big Four.

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