The company has paid $224m for costs related to “ongoing investigations” into the News of the World phone hacking scandal, which included $57 million in the three months leading up to the close of June. The company said it was unable to include the costs of the investigations into its projections for 2013 as they were “unpredictable” reports The Telegraph.
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The company, which earlier this month announced plans to break up into two publicly traded businesses by separating the publishing business from more profitable television and film business, also took on the $2.8bn expense for restructuring costs and losses.
News Corp did not go in depth, but the allegations were mostly related to its publishing operations in the country of Mr. Murdch’s birthplace, Australia. News Limited, News Corp’s newspaper company in the region is currently working to merge its digital and print operations in a shake-up which is expected to cost hundreds employees their jobs.
In total, News Corp lost $1.6bn during the three months that ended at June’s close which was compared to a 683 million profit for the same period the previous year. Revenues dropped 6.7pc to $8.4bn which was below analyst estimates.
The News Corp’s film and television business performed the majority in the bulk of heavy lifting with a great performance of its cable television operations, including Fox News. However the publishing division that includes The Times, The Sunday Times and The Sun newspapers in the UK as well as The book publishing company HarperCollins The operating revenue of HarperCollins decrease from $270m to $139m due to the closing of News of the World and an increase in advertising revenue.
Rupert Murdoch said in a statement that News Corp “strong operational, strategic and financial position” could “only be enhanced” by the split.
But, he wasn’t present for a conference call with analysts. Instead his son James Murdoch, News Corp’s deputy chief operating officer, was hosting the conference along with Chief Operating Officer Chase Carey and chief finance officer David Devoe.
Rupert Murdoch’s plans for having his son succeed the chief executive position at News Corp have been severely hurt due to the hacking scandal but James Murdoch’s appearance on the conference call to New York have raised expectations that his father is attempting to restore him as the the heir apparent.
In the end, Rupert Murdoch will have to prove his point by convincing shareholders that he is entitled to his current positions as chief executive and chairman as well as the need to advance his son’s future.