News Corp.’s first-quarter profit jumped 36% from higher advertising sales and subscriber fees at its television channels, reports Bloomberg.
The company is benefiting from higher fees from TV distributors, as seen with its new deals with Dish Network and Cablevision Systems. the latter agreed to pay higher retransmission fees but complained that they signed the deal at an "unfair price."
News Corp. Chief Operating Officer Chase Carey said on an earnings conference call, "These deals are critical to driving the Fox network’s financial success to reflect its real value." According to the story, "Cablevision and Dish probably will pay 55 cents per subscriber per month in the first year, rising to $1 in the fifth year, analyst Michael Nathanson of Nomura Securities International Inc. estimated in a Nov. 1 report."
He added that its TV business will reach "a whole new level of profitability" as News Corp. closes new retransmission agreements.
According to the article, "Sales in the first quarter ended Sept. 30 gained 3.2 percent to $7.43 billion."
Furthermore, the story notes, "Operating profit for the television unit more than doubled as a 22 percent jump in local-station ad revenue offset higher programming costs at the Fox broadcast network. The cable networks, such as FX, increased operating income 28 percent to $659 million, on a 17 percent gain in revenue. At the U.S. channels, advertising grew 16 percent and affiliate fees rose 14 percent."
Interestingly, it was the first earnings call that company chief Rupert Murdoch, 79, was not on since 2006. The company said he missed the call because he was travelling overseas, the article said..