News Corp posts loss on restructuring charge

The media group paid out $224m in costs relating to “ongoing investigations” into the News of the World phone hacking scandal, including $57m in the three months to the end of June. It said it could not factor the cost of the investigations into its forecasts for 2013 because they were too “unpredictable” reports The Telegraph.

The company, which last month set out plans to split into two listed businesses, separating its publishing assets from its much more profitable film and television businesses, also took a $2.8bn charge for restructuring and impairments.

News Corp did not go into details but said the charges were largely associated with its publishing operations in Mr Murdch’s native Australia. News Limited, News Corp’s newspaper business in the territory, is in the process of merge its print and digital operations in a shake-up that is expected to cost hundreds of staff their jobs.

Overall, News Corp lost $1.6bn in the three months to the end of June, compared to a $683m profit in the same period last year. Revenues fell 6.7pc to $8.4bn, below analyst expectations.

News Corp’s film and television businesses did the bulk of the heavy lifting, led by a strong performance from its cable television operations such as Fox News. By contrast, the publishing business, which includes The Times, The Sunday Times and The Sun newspapers in the UK and the book publisher HarperCollins, saw operating revenues decline from $270m to $139m following the closure of the News of the World and a drop in advertising revenues.

Rupert Murdoch said in a statement that News Corp “strong operational, strategic and financial position” would “only be enhanced” by the company split.

However, he was not present on a call to analysts. Instead, his son James Murdoch, News Corp’s deputy chief operating officer hosted the call with chief operating officer Chase Carey and chief finance officer David Devoe.

Rupert Murdoch’s plan to have his son succeed him as chief executive of News Corp have been severely damaged by the hacking scandal, but James Murdoch’s presence on the call in New York have raised expectations that his father is trying to reinstate him as heir apparent.

However, Rupert Murdoch will have to work hard to convince shareholders he should keep his own jobs as chairman and chief executive, let alone that they should promote his son in the future.