Tabloid price war hits News Corp in UK

Our City Staff
Wednesday 06 November 2002 01:00
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Rupert Murdoch's News Corporation reported a 50 per cent fall in first-quarter operating income at its UK newspaper business last night, after the cover price war with the Daily Mirror took its toll on The Sun's circulation revenues.

But stronger advertising and improvements at its US television and cable networks units saw the media giant's overall operating income rise by 51 per cent to $548m (£350m) in the three months to 30 September, while revenues rose 12 per cent.

News Corp, which owns the Fox television network in the US, 20th Century Fox film studios and a host of newspapers and satellite assets, posted a net profit for the quarter of $162magainst $73m a year ago. Revenues rose 12 per cent to $3.81bn.

The television unit saw its operating income rise more than three-and-a-half times to $188m, helped by improved ratings from Fox network shows such as American Idol. A year ago, the advertising market was at its lowest point in decades, hurt by an ailing economy and cancellations after September 11.

But the global newspaper unit, which includes the New York Post and Australian titles, saw income fall 23 per cent to $57m. The cost of cover price cuts more than offset a rise in circulation and "slightly higher advertising revenue" at The Sun.

The company also reiterated its earnings guidance for 2002/03 and said its Fox division would significantly increase profits.

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