Restructure leads to $1.6bn News Corp loss

News Corp has swung to a loss of $1.6 billion compared with a net income of $683 million in the same period last year. The loss included a $2.9 billion pre-tax restructuring charge.

The company plans to split into two, separating its profitable film and TV business from UK newspapers, mired in the phone-hacking scandal.

“News Corporation is in a strong operational, strategic and financial position, which should only be enhanced by the proposed separation of the media and entertainment and publishing businesses,” Rupert Murdoch said.

The $2.9 billion charge is for “impairment and restructuring” – ahead of the corporate split. Murdoch has said the split would “unlock even greater long-term shareholder value”.

For the last financial year as a whole, the results include a $224 million charge related to the legal costs over the phone-hacking scandal.

In the quarter, its film business had an operating income of $120 million, compared with $210m reported in the same period a year ago when animated film Rio was a success in theatres.

The forthcoming corporate split will see News Corp’s film and television businesses – including 20th Century Fox and the Fox broadcasting network – grouped in one company.

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