Rupert Murdoch's News Corporation is to be plunged into losses after a $2bn (£1.4bn) writedown of its investment in the troubled publisher Gemstar-TV Guide International.
The US publishing group has had a troubled time since it was created by the merger of News Corp's TV Guide with electronic listings publisher Gemstar in 2000. Earlier this month it reported a new loss of nearly $600m and said it may have to take a $5bn write-down because of new accounting rules in the US.
News Corp has admitted that it will have to shoulder its share of that writedown, estimated to be in the region of $2bn. Analysts following News Corp believe that Mr Murdoch may take the view that as the group is already writing off the Gemstar investment, News Corp may also want to make provisions against a number of other stakes built up when the markets were highly valued a couple of years ago.
BSkyB, in which News Corp has a 36 per cent stake, has already written off nearly £1bn on its exposure to business that forms part of the troubled media empire of Leo Kirch. Mr Murdoch is currently in talks to buy Kirch assets that may be sold off under a restructuring, expected to be announced next week.
He faces competition from Silvio Berlusconi, the Italian prime minister who also controls a media empire, and Prince Alwaleed, the Saudi investor.
Assets in the Kirch empire include the TV rights to Formula 1 motor racing, the German Bundesliga and the World Cup 2002-2006.Reuse content