NEW YORK (AP) - News Corp. CEO Rupert Murdoch said Wednesday he expects to
clinch a deal to buy the Long Island-based newspaper Newsday within a week,
despite a higher offer from Cablevision Systems Corp.
The news came as the global media conglomerate reported that its latest
quarterly earnings more than tripled to $2.69 billion on a one-time gain from a
stock exchange with Liberty Media Corp.
News Corp. had been reported to be in a tentative deal to acquire Newsday
for $580 million when Cablevision weighed in with an offer of $650 million. New
York Daily News owner Mortimer Zuckerman has also offered $580 million.
Murdoch said News Corp. was in a "pretty advanced stage" with Newsday's
parent company Tribune Co., which went private last year in a deal led by the
real estate magnate Sam Zell. Murdoch had indicated earlier that he didn't
intend to raise his bid.
"I trust Mr. Zell absolutely," Murdoch said on a conference call with
reporters to discuss the company's earnings, adding that he considered Zell to
be a man of his word. "We think everything's in hand."
If it succeeds in acquiring Newsday, News Corp. could realize significant
savings by consolidating the paper's back-office and production operations with
those of News Corp.'s Manhattan-based tabloid, the New York Post, which is a
consistent money-loser.
Murdoch declined to detail the Post's losses, but said that a cover price
increase to 50 cents planned in the next week or two and other measures there
should save about $26 million.
Murdoch also said he didn't expect to encounter regulatory difficulties in
acquiring Newsday, and said he was confident of getting the broadcast licenses
for the company's two New York TV stations renewed even if the company had to go
to court to do it.
News Corp. currently has an exemption to Federal Communications Commission
rules that bar one company from owning both a broadcast outlet and a newspaper
in the same market.
On another topic, News Corp.'s chief operating officer Peter Chernin
indicated the company wasn't currently in active, ongoing discussions with
either Yahoo Inc. or Time Warner Inc.'s AOL unit about a possible combination
with News Corp.'s MySpace social networking site, despite the recent collapse of
Microsoft Corp.'s attempt to acquire Yahoo.
MySpace had been seen as a potential player in such a consolidation, teaming
up with either Yahoo or with Microsoft, either of whom would find the addition
of MySpace's booming online traffic and growing advertising revenues appealing.
Chernin said the company held regular discussions with other Internet
players but was "very comfortable" in its current position of keeping MySpace as
a stand-alone entity. Chernin noted that the site garnered just over half of all
the advertising revenues currently going into social networks, a hot new area of
online marketing.
News Corp. reported after the close of stock trading that its latest
quarterly earnings more than tripled due to a one-time gain of $1.7 billion from
a stock exchange with Liberty.
News Corp., which also owns Twentieth Century Fox, Fox News Channel and Dow
Jones & Co., publisher of The Wall Street Journal, earned $2.69 billion or 91
cents per share in the period, versus $871 million or 27 cents per share a year
ago.
Excluding one-time effects, the earnings were equivalent to 30 cents per
share, versus 26 cents per share in the year-ago period. Revenue rose 16 percent
to $8.75 billion from $7.53 billion.
The stock exchange with Liberty wound up transferring News Corp.'s
controlling interest in the satellite broadcaster DirecTV Group Inc. to Liberty,
a Colorado-based company controlled by the media mogul John Malone.
Higher earnings from broadcast TV and cable networks outweighed declines in
movie and TV production, which had a booming quarter a year ago from "Borat:
Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan"
and "Night at the Museum."
Television earnings jumped 53 percent from higher results at Fox TV stations
from the Super Bowl; lower programming costs at the Fox broadcast network and
better results from MyNetworkTV, a fledgling mini-TV network.
Profit from cable networks rose 17 percent on higher results from Fox News
Channel, tempered by startup costs from the newly launched Fox Business Network.
Newspaper earnings rose 38 percent on higher advertising revenue from News
Corp.'s Australian newspapers, lower costs from papers in the United Kingdom and
the inclusion of Dow Jones, which the company acquired last December.
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