From the small victories department: Cablevision says that its purchase of Newsday last summer wasn’t quite the disaster it had feared. That is, instead of taking a $450 million write-down on the $650 million purchase, the cable company is only writing off $402 million on the Long Island newspaper. Even better: The paper didn’t do that poorly in the last three months of 2008.
What will News Corp.’s management structure look after Peter Chernin leaves? In the very short term, it will remain the same, except that the Fox units Chernin ran–the movie studio, network TV business, and Fox Interactive/MySpace group–will report directly to CEO Rupert Murdoch. But Chernin’s departure will also kick off a near-term reorg and management shuffle, which Murdoch referred to in an all-hands memo today.
All the smart money said that Peter Chernin would never leave his job as the number two guy at News Corp. and that all the will-he-won’t-he we’ve heard over the past few months was simply a negotiating ploy. Looks like all of us were less clever than we thought. Chernin, whose contract as COO expires at the end of June, won’t be staying on.
Midway through next year, Google’s $900 million, 3.5-year search advertising deal with News Corp. and MySpace expires. What are the odds that Rupert Murdoch’s social network gets anything close to that with a new contract? Very, very low.
What happens when you pay a whole lot of money for a newspaper as the newspaper industry is in freefall? You have to make an embarrassing admission to shareholders a year later. Last week, we saw News Corp. go through this exercise when it wrote off half the value of the $5.7 billion it spent on Dow Jones and The Wall Street Journal. Now it’s Cablevision’s turn: The Long Island-based cable company is writing off as much as 70 percent of the $650 million it spent on Newsday last year.
Last year, Rupert Murdoch spent $5.7 billion to purchase The Wall Street Journal. Now the News Corp. CEO is telling shareholders that he paid twice as much as he should have.
Here are some of those cost-cutting measures Rupert Murdoch was talking about during today’s News Corp. earnings call: The Wall Street Journal is laying off 14 people in its editorial group, publisher Robert Thomson announced this afternoon.
Even though analysts had moved their News Corp. estimates down at the company’s urging, the media conglomerate still underperformed the consensus and is writing off $8.4 billion. Rupert Murdoch: “Our results for the quarter are a direct reflection of the grim economic climate. While we anticipated a weakening, the downturn is more severe and likely longer lasting than previously thought.” But investors are taking the results in stride, and News Corp. shares are trading up.
Longtime Rupert Murdoch fan Rich Greenfield says he’s worried that money losers like Dow Jones will pull News Corp. down, and cut his rating to “sell.” Perhaps this will cheer him up: The Wall Street Journal is reportedly bracing for layoffs next week.
You don’t need a particularly good crystal ball to foresee that big media are in for a bad year (at least). But Wall Street singled out Sumner Redstone’s Viacom and Rupert Murdoch’s News Corp. for special treatment this morning, by whacking estimates for the next few quarters. The short story: The lousy ad market will be even worse than people think.
The New York Times is already trying to mortgage its headquarters and unload assets like its stake in the Boston Red Sox. So, what’s left to sell? The front page. CBS has taken out the first display ad the paper has ever allowed on the front of its print edition. This is only historic because the Times management has been so stubborn about keeping its front page pristine–it’s hard to imagine that any reader will care. Of course, the cash-crunched media company really doesn’t have any choice at this point.
Rupert Murdoch, who has been dour about the economy since last spring, now says things are worse than he thought. Three months ago, the News Corp. CEO was predicting operating profits to increase four percent to six percent by the middle of next year; yesterday the company said it now expects a decline in the low-to-mid teens. And yes, the company is seeing “softness” in advertising at MySpace and its other Web sites.
MySpace pushes a pretend candidate to New York publishers and ad agencies. But the company’s real results come a day after election day: On Wednesday, parent company News Corp. will have to tell investors how the giant Web site’s ad sales are performing.
Peter Kafka has been covering media and technology since 1997, when he joined the staff of Forbes magazine. Most recently, he has been the managing editor of the tech and media Web site, Silicon Alley Insider. Read more »
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