NEW YORK: 'Schadenfreude' is the Germanic term for taking pleasure in the misery of others. It may also be an apt description of the feeling of rival media moguls upon hearing that Rupert Murdoch's News Corporation has slashed its profit forecast for 2008.
Earlier this year, the company predicted 2008 year-on-year profit growth of between 4%-6%, but it now says operating profits will fall by at least 10% from last year's $5.13 billion (€3.98bn; £3.22bn).
Murdoch says this constitutes "a clear reflection of the current economic downturn, which we believe will persist throughout fiscal 2009 and be extremely challenging for the media sector."
NewsCorp's income dropped to $515 million in the third quarter from $732m in the same period in 2007, partially as a result of the decline in value of its 25% stake in German pay-TV operator Premiere.
Other causes of its unusual discomfort were said to include the "pretty grim picture" at its local TV stations in the US, and declining ad revenues at its UK and Australian newspapers.
This offset a 31% increase in ad revenues at the Fox cable network, while growth at Fox Interactive Media – including MySpace – was 17%, lower than the predicted 30%.
Italian pay-TV service Sky Italia also its operating income from $48m to $165m, while the company's 'filmed entertainment' output saw income fall by $111m to $251m.
According to Murdoch, NewsCorp will seek to impose “stringent” cost control across its operations, with a reduction in staff numbers thought to be one option under consideration.
Data sourced from Financial Times; additional content by WARC staff