TV played a big role as News Corporation reported operating income up 21% to %.4 billion for its Fiscal 2008, which ended June 30th. For Q4, operating income also rose 21% to $1.5 billion.
COO Peter Chernin hailed the Fox Network for its 4th straight season as #1 in the prime 18-49 demo, and for the first time a victory across all major demos. He reported that the upfront was strong for the network and that scatter continues to be robust. Also, football sales are pacing strongly ahead of last year. So, national advertising is still good, but it is a different story for the local TV O&O group.
“While the network outlook is bright, our local stations are feeling the effects of a worsening economy. The total local ad market was down 10% in the 4th quarter and pacings for Q1 ’09 continue to be weak. We’re starting to see some presidential political spending in several markets, but spending in key categories, like automotive and telecom, financial services, remains down,” Chernin said, adding that the Fox stations group has increased its market share, but the local ad marketplace is “highly challenged.”
Noting that Fox had recently sold a group of its mid-market TV stations at attractive multiples, one analyst wanted to know if more might be sold off. Chernin said he wouldn’t ever rule out anything, but that it was unlikely the company would sell off its big market stations, particularly those in duopolies. “We need those stations to be the backbone of our network,” added CEO Rupert Murdoch, who joined the call from Beijing, although not without some technical difficulties.
Fiscal Q4 operating income for the Television segment of News Corporation was down 28% to $279. The decline was attributed to lower contributions from the Fox Television stations, the STAR pay TV service, and the Fox Network. For the full year, though, Television segment operating income rose 17%, due to improved results by the Fox Network and lower losses by MyNetworkTV, offset by lower contributions by the stations and STAR.
Cable Network Programming posted fiscal Q4 operating income of $313 million, up 10%. For the full year, growth was 16% to $1.3 billion. Those gains were credited to Fox News Channel, the regional sports networks and the Fox International Channels.
With fiscal 2009 now underway, News Corporation is predicting that operating income for the year will be up in the low to mid single digits for all of its businesses, save two. The TV stations are expected to decline by the mid single digits. Fox Interactive is expected to post higher growth than the rest of the company.