News Corp. Profit Drops 24% In Q3 Despite Strong Gains For TV Business

News Corp.'s profit dropped by 24% in its FY Q3 "as declines in the company's movie and newspapers business, along with litigation costs, offset strong gains at its cable networks and broadcast-television stations," according to Russell Adams of the WALL STREET JOURNAL. Net income was $639M, or $0.24 a share, for the quarter ended March 31, down from $839M, or $0.32 a share, during the same period last year. Revenue declined 6% to $8.26B. However, News Corp.'s cable television division, "which includes FX and Fox News and accounts for more than 60% of the company's total operating income, reported a 25% increase in operating income for the quarter driven by higher advertising rates" at the company's RSNs. TV operating income "increased nearly fivefold to $192 million due to a stronger national advertising market and a revenue boost from" Fox's broadcast of NFL games and Super Bowl XLV in February (WALL STREET JOURNAL, 5/5).

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).