News Corp Delivers Bad News

You may own MySpace, the Times, The Sun the News of the World, the Wall Street Journal, the Australian, Twentith Century Fox and HarperColins but you are not immune to bad hair days. Rupert Murdoch's global media empire, News Corporation, delivered a thumping great $3.4bn (£2bn) net loss for the 12 months to June.

What went wrong? Was it just down to newspapers and advertising revenues? Why did operating profit drop by a staggering 32% to $3.6bn. Cable TV couldn’t counter a slump in income from films, newspapers, books, magazines and online.

In the final quarter of the year, News Corp made a $203m loss, compared to a $1.1bn profit for the same period in 2008.

MySpace, has clearly been outshone by Facebook and could slip to the degree that the likes of Friends Reunited did and shedding 400 staff could be seen as merely treating the symptoms not the underlying cause. The UK newspapers, had a 14% drop in year-end advertising revenue whilst profits in it’s global newspapers business fell from $786m to $466m. Even the bright news that Twentieth Century Fox film studio recorded annual profits of $848m, that was a drop from from the previous year's $1.24bn.

The bad news goes on. The question is what is the remedy? Is it just experiencing a bad day or does it has serious problems and is the balance of media interests now imbalanced? The one thing that is certain is that it can’t reverse bad news across such a wide diversity of interests quickly and that would suggest that some may have to be sacrificed for the larger game.