Gemstar Red Ink Engulfs NewsCorp

16 August 2002

Rupert Murdoch’s News Corporation unveiled the preliminary numbers for its fiscal fourth quarter, posting an 11% increase in revenues and a 25% rise in operating profits – all of which were swamped by a massive $1.9 billion (€1.94bn; £1.24bn) charge against earnings.

The charge, which was widely-expected, reflects the freefall in the value of NewsCorp’s stake in Gemstar, the US publisher of TV Guide and developer of interactive digital TV programme guides. It joins other similar provisions made by NewsCorp over the past twelve months for investments in Kirch Gruppe and certain US sports broadcasting rights, an eye-watering $9.2bn in aggregate.

Said a rueful Rupert : “We will not be making any investments in anything where we do not have complete control or a considerable level of control.” Nor would he take part in the current auction of KirchMedia [as predicted by WAMN, 14-Aug-02]: “We're feeling pretty sore about it, and it's a case of once bitten, twice shy.”

However, he remains eager to merge NewsCorp’s Italian pay-TV venture Stream with rival Telepiu, co-owned by ailing French media group Vivendi. The inking of the deal will depend on NewsCorp verifying the accuracy of Telepiu’s subscriber-base.

Data sourced from: Financial Times; additional content by WARC staff