Marketing

Ad Sales Fuel Growth at Disney, News

5/14/2012 12:01 AM Eastern

Strong ad sales at their respective cable
networks helped drive quarterly growth at News Corp. and
The Walt Disney Co. last week.

Costs connected with the scandals
surrounding its U.K. newspapers
didn’t stop News Corp. from reporting
higher profits as its cable networks
registered another strong quarter.
Net income rose 47% to $937 million,
or 38 cents a share, in the company’s
fiscal third quarter, from $639 million,
or 24 cents a share, a year ago.

The quarter includes a $63 million
charge related to the cost of the
ongoing investigations of the cellphone-
hacking scandal that led to the
closure of the U.K. paper The News of the World and a $111
million pre-tax gain from British Sky Broadcasting’s sharerepurchase
program. The prior year’s quarter had a $125 million
charge stemming from litigation at its marketing services
business. Excluding all special charges, earnings per share
were 37 cents, compared to 26 cents a year ago, the company
said. Revenues rose 2% to $8.4 billion.

During the company’s conference call with analysts, News
Corp. chief operating officer Chase Carey addressed the company’s
reaction to a U.K. Parliamentary
committee report
on the hacking scandal that
said chairman and CEO Rupert
Murdoch was not fit to run a
major international company.

“He’s one of the smartest,
most forward-thinking executives
of our time and both the
board and I rebuff any notion
that he is unfit to run this company,”
Carey said.

Operating income rose 15%
to $846 million at News Corp.’s cable-network programming
segment. Revenues were up 16%, while expenses grew 17%
because of the launch of Ultimate Fighting Championship
programming and production of additional National Basketball
Association games following the league’s lockout.

“Our channels business is a growth business, still in its
evolution and we’re committed to investing in content to
strengthen our leadership position,” Carey said. “We’re not
merely going to focus on squeezing the margins.”

Income at News’ domestic channels increased 17%, driven
by double-digit growth at the regional sports networks, FX Network
and Fox News Channel. Affiliate revenue rose 15% reflecting
higher rates at all of the U.S. networks. Ad revenue at the
domestic cable channels grew 10% in the quarter, with doubledigit
gains at Fox News and the National Geographic Channels.

At Disney, television networks and theme parks drove increases
in the fiscal second quarter.

Net income rose 21% to $1.14 billion, or 63 cents a share,
from $942 million, or 49 cents a share, a year ago. Gains related
to the acquisition of UTV Software, restructuring and
impairment charges together contributed 5 cents to Disney’s
second-quarter earnings. Revenues rose 6% to $9.6 billion.

Disney’s media networks unit had operating income of $1.7
billion, up 13% from a year ago. Revenues rose 9% to $4.7 billion.
Operating income for Disney’s cable networks, including
ESPN, rose 11% to $1.5 billion as revenues grew 2% to $3.17
billion. ESPN’s operating income was up because of higher affiliate and ad revenues. It also had higher programming and
production costs. Ad revenues were higher because of the
timing of the Rose Bowl, Fiesta Bowl and some NBA games.

April

2015 BCAP Cable Academy

Sheraton Harrisburg Hershey Hotel, 4650 Lindle Rd., Harrisburg, Pa. Contact: Suzette Welter, swelter@bcapa.com

May

Multicultural TV Breakfast Panel

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