News Corp's American depositary receipts lost almost a dollar in trading in New York yesterday to dollars 37, after plummeting more than 5 per cent to dollars 377 8 on Tuesday. While most industry analysts blame the decline on new year profit-taking - News Corp's ADRs almost doubled in value last year - some investors are increasingly alarmed about Fox's performance since the departure of its highly regarded chairman, Barry Diller, a year ago.
At the time, it was too early to judge Mr Murdoch's decision to move to Los Angeles to take personal control of Fox. But since then both Fox's broadcasting unit and its Twentieth Century Fox movie studio have lost top-ranking executives. On Monday the resignation of Fox Broadcasting's president, Jamie Kellner - the executive most closely identified with the network's success among younger audiences - caused one of News Corp's most enthusiastic promoters on Wall Street, the Oppenheimer analyst Jessica Reif, to lower her rating of the shares. This prompted at least some News Corp holders to sell.
Mr Murdoch has promoted Lucie Salhany, head of TV production and an executive some regard as among the most capable in Hollywood, to Mr Kellner's post. But others criticise Mr Murdoch for resisting paying the high salaries typical of the industry. 'When in Hollywood, one follows Hollywood procedures, and talent can be expensive,' said John Reidy, analyst with the Smith Barney broking firm in New York.
Oppenheimer's Ms Reif and others also expressed disappointment with the box office performance of two of the Fox studio's three Christmas movies. While all three - the Home Alone sequel, Hoffa with Jack Nicholson and Toys with Robin Williams - rank among the top 10 films this week, according to Variety magazine, the high number of Christmas releases this year means that only the third-ranked Home Alone 2 is likely to cover its production costs, having grossed dollars 145m in 45 days.
The other two films - which have earned dollars 15m and dollars 10m respectively in the past two weeks - are flops, said Ms Reif, particularly in light of the high expectations raised by Fox for both.
But Mr Reidy of Smith Barney said the Fox studio had a much bigger box office flop a year ago, and argued that investors should not be overly concerned with turnover in Hollywood. Indeed, he noted, Mr Kellner has joined Fox's board and may receive funding from Mr Murdoch for his own production plans.
Others note that while the Fox TV network is maturing and growth will slow, it is on track with plans to extend its programme schedule to six evenings this month and to seven in May.