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SBD/May 5, 2011/Finance
News Corp. Profit Drops 24% In Q3 Despite Strong Gains For TV Business
Published May 5, 2011
FOLLOW THE BOUNCING BALL: Time Warner yesterday reported revenues of $6.7B for its FY Q1, up 6% from last year. The growth was "helped by a 31% gain in advertising revenues at the company's networks division," which includes TBS, TNT and TruTV, on which NCAA men's basketball tournament games were shown. However, Time Warner's profits for the quarter "dipped 10% to $653 million, in part because a big chunk of the costs for the NCAA tourney package were recognized in the quarter." In addition, Time Inc.'s revenues "were flat at about $798 million, largely because Sports Illustrated's SI.com and Golf.com were transferred to Turner Sports" (VARIETY.com, 5/4). Time Warner's "profit at the company's largest business -- TV networks, including cable channels HBO, TBS, TNT and CNN -- rose 2.3% as revenue jumped 18%" (WALL STREET JOURNAL, 5/5).
SIGNIFICANCE OF SPORTS: The FINANCIAL TIMES' Gelles & Edgecliffe-Johnson note Comcast, CBS and Time Warner "all cited the effect of sports programming on their first-quarter earnings." Time Warner and CBS were "boosted by their partnership to air" the NCAA tournament, while Time Warner said that TNT "saw NBA basketball ratings rise by 40 per cent to a 27-year record." Comcast Chair & CEO Brian Roberts indicated that the NFL and upcoming Olympics contracts "were in his sights but that he was wary of overpaying." Roberts: "We think those are two fantastic properties and would love to have them, but would like to make money" (FINANCIAL TIMES, 5/5).