Operating income at Fox owned-and-operated TV stations dropped by 44 percent 2Q-over-2Q, parent company News Corp. reports. The decline for the company's fiscal quarter ending Dec. 31 was attributed to the implosion in local ad markets and the divestiture of several TV stations.
"Local television station advertising markets declined an estimated 19 percent in the quarter, as compared to a year ago," News Corp.'s (NASDAQ: NWSA) earnings release stated. "In addition, the year ago period included a full quarter of contributions from eight stations that were sold in July 2008."
The combined TV division of News Corp.—TV stations, the Fox network, MyNetworkTV, Fox Sports Australia, Foxtel and Star—posted 2Q operating income of $18 million. The results were off from last year's $227 million by 92 percent. The Fox broadcast network was hit by higher sports and programming costs, and lower ad revenues, particularly from Major League Baseball games.
The cable networks fare better, posting operating income of $428 million, an increase of 27 percent over the year-ago period. Fox News Channel alone posted a 32 percent increase in operating income.
News Corp., which also owns satellite broadcast and publishing businesses, posted an overall net loss for the quarter of $6.4 billion on combined revenues of nearly $7.9 billion.
"While we anticipated a weakening, the downturn is more severe and likely longer lasting than previously thought," News Corp. chief Rupert Murdoch said. "As a result, we have been taking actions to preserve a solid level of operational profitability and a strong balance sheet without sacrificing future growth. We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate."
To that end, The Associated Press reports that News Corp. has cut 800 jobs from the Fox businesses.