By Stephen Mayne and Glenn Dyer





After all the excitement of News Corp’s deal with Google yesterday,
the record full year profit of $US2.31 billion this morning came across right on expectations, although shares in
the media giant eased 14c to $26.28 in line with the weaker market.

That said, the result was an 8.4% gain on the $US2.13 billion net profit in 2004-05 and News Corp is tipping a further 12% gain
in operating income for 2006-07 so the recent record of steady profit
growth is being maintained.

Check out the full announcement here and have a listen to the webcast of Rupert Murdoch’s quarterly conference call with analysts and journalists here.

The hacks tried to get a rise out of Hurricane Rupert on Australia’s media laws but the Sun King has clearly moved on: “Frankly
I haven’t thought a lot about it since I left Australia two months ago.
I know there’s a lot of developments but I haven’t changed my opinion
on what those early proposals were.”

Indeed, Rupert’s Australian operations don’t rate much of a mention
at all now that the 75-year-old media veteran is in America and playing
with the big
boys in all those trendy and far more profitable areas of new media,
film, cable and satellite TV. Newspapers are in fact a sore point
because they are underperforming, especially in the UK. Here’s
what News Corp said about its newspaper businesses:

The
Newspapers segment reported fourth quarter operating income of $170 million, a
decrease of $82 million compared with the same period a year ago, and full year
operating income of $517 million, a $223 million decrease versus fiscal 2005.
The quarterly and full year declines primarily reflect lower contributions from
the UK newspaper group.

The
Australian
newspaper group reported a fourth quarter operating income decline
in local currency terms versus the same period a year ago mainly due to a
weaker advertising market and higher production and editorial costs. Full year
operating income increased versus fiscal 2005 primarily from inclusion of
results from the Queensland Press Group, which was acquired in November
2004.

The other local asset is the 25% owned Foxtel which delivered a profit
of $5.2 million profit in the year to June, but is totally overshadowed
by the impressive debut profit by Sky Italia. However, Foxtel’s June
quarter pre-tax profit was $10.4 million, a vast improvement on the $15
million loss previously.

Seeing it doesn’t pay tax because of past losses,
Foxtel looks like it’s solidly in the black. Of course News took out
millions of dollars through its half share of Premier Media (Fox
Sports), the most profitable part of the Australian pay-TV business.

News Corp also released a 52-page form 8-K statement
which revealed that Fox News and Television chief Roger Ailes has just
been granted a $US3.42 million bonus for 2005-06 and Rupert’s base
salary had been bumped up to $US8.1 million in 2006-07. The 2005-06
bonuses for all the other senior executives were based on a previously
disclosed earnings per share formula suggesting the pay packets will
generally be up by about 10% when we see the annual report in a few
weeks times.

All up, the Sun King has much to be pleased about.

Peter Fray

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