News Corp. accounts for its Myspace losses
News Corp. for the first time gave an accounting of the losses associated with selling off struggling social network Myspace and abandoning its $12-billion bid for satellite broadcaster British Sky Broadcasting.
The media conglomerate recorded a $254-million loss for the June sale of Myspace to Specific Media, an Orange County firm specializing in online advertising. The once high-flying social network, which News Corp. acquired for $580 million six years ago, sold for $35 million.
News Corp. also incurred a breakup fee of approximately $63 million when it decided in mid-July to withdraw its bid for the remaining shares of BSkyB that the company does not already own. The company was forced to at least temporarily walk away from the satellite broadcaster amid public outrage over the British phone-hacking scandal. Journalists working for the now-defunct News of the World tabloid allegedly listened to the voicemail messages of murder victims and soldiers killed in combat.
"While it has been a good quarter from a financial point of view, our company has faced challenges in recent weeks relating to our London tabloid, News of the World,'' News Corp. Chief Executive Rupert Murdoch said in a statement. "We are acting decisively in the matter and will do whatever is necessary to prevent something like this from ever occurring again."
Overall, News Corp. reported a net income of $683 million in its fiscal fourth quarter ending June 30, a decline of 22% over a year ago. Revenue for the quarter rose 11% to $8.9 billion.
The biggest gains for the corporation came from its cable television networks, which reported fourth-quarter operating income of $631 million, a 12% increase compared with a year earlier. The film studio saw its operating income jump 53% to $210 million -- reflecting the strong theatrical performance of the animated movie "Rio."
-- Dawn Chmielewski
Photo: The Myspace.com website is displayed on a computer monitor. Credit: Jin Lee / Bloomberg