News Corp. Upbeat for 2011 - Broadcasting & Cable

News Corp. Upbeat for 2011

Reverses losses to post 2010 earnings led by cable
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Having
turned its losses from the prior year into a tidy profit in 2011, News Corp. on
Tuesday forecast that its earnings would increase by double digits in 2011.

News
Corp, whose fiscal year ends in June, is the first major media to take a look
longer term health of its business. And most of what it sees it likes.

Rupert
Murdoch, chairman and CEO, who has been somewhat pessimistic about the world
economic outlook in the past, said on the company's earnings call that
while conditions remain "very fragile," the advertising market is
"inexplicable good."

"So
we just have to wait and see how it turns out, but certainly I'm very
confident of the next six months. But I think there is sufficient credulity for
us not to be over confident about the long term or the medium term," he
said.

News Corp. CFO David DeVoe, who delivered the
company's financial guidance for 2011, said that "we are
anticipating a stable economic outlook with modest growth in the major
economies in which we operate and we expect that advertising markets will
remain healthy. As a result we expect many of our businesses will generate
strong year over year earnings growth and these include continued robust growth
at our cable networks, led by further expansion of our international channels,
as well as sustained revenue increases at Fox News, the RSNs and Star."

Despite a film business that is unlikely to replicate the
success of the record-setting Avatar, and unfavorable changes in foreign
exchange, DeVoe said News Corp. expected the growth rate for the
company's operating income to be in the low double digit range from its
$4.46 billion total in 2010.

Chase Carey, COO at News Corp. said that in 2010, the
company benefited because "the economy was not as dire as we feared and
we benefited from a recovering advertising market.

Carey said the ad market continues to be very strong.

"Our local stations current look to be pacing close to
a 30% growth rate for this quarter and the scatter market continue to generate
double digit premiums to upfront pricing. Our cable network scatter is even
higher than that," he said.

Cable has become News Corp.'s biggest generator of
profits and growth, led by Fox News, the regional sports networks and international
channels.

"This group not only has exciting growth potential but
great stability This group not only has exciting growth penitential  but
great stability due to the long range nature of our contracts. It is a fabulous
business and I do not believe that its strength value and importance are
properly understood in evaluating News Corp," he said.

Carey also noted that in addition to having the top movie in
Avatar, the company produced TV's two biggest new hits in Glee and Modern
Family, both of which have already been sold in to syndication.

Carey added that Fox Broadcasting Co. has been successful,
finishing first for the sixth straight year among adults 18 to 49, but has a
problem with "a lousy business model."

He said broadcast needs a dual revenue stream.
"We've begun this fight and we will prevail. We have right on our
side. We have the most valuable programming and deserve to be fairly
compensated."

During the conference call, Murdoch assured the analysts and
reporters that Fox was close to naming new judges for its top-rated show,
American Idol.

"I can assure you that next year's Idol will be
different and will be better and that the music will be better," he said.
He added that next year, when the network adds X Factor, "we'll
really stand out."

Also during the call, Carey was asked about his new
compensation deal, in which his base salary is being cut to $4.05 million in
2011 from $8.11 million in 2010.

He said he was basically exchanging salary for longer-term
performance based compensation.  "It aligns my interests more with
the shareholders," Carey said.  "I believe in the business I
believe in our future. And I think it's the right thing to do."

News Corp. posted fourth quarter
net income of $875 million,
or 33 cents per share, compared to a net loss of $203 million, or 8 cents a
share a year ago.

For
the full year, the company said net income was $2.5 billion, or 97 cents a
share, compared to a $3.4 billion loss, or $1.29 a share, in 2009.

The
company said that excluding special charges, its operating income was up 30% in
2009...

In
the fourth quarter, operating income at News Corp.'s television unit rose
to $113 million from $100 million. For the full year, the television division
has earnings of $220 million, up from $191 million in 2009.

The
quarterly and full year results were largely driven by improved advertising
markets.

Local
station advertising revenues improved 29% in the quarter reflecting strength in
the automobile and telecom sectors.

At
Fox Broadcasting Co., fourth-quarter and full-year operating results decline
due to higher programming costs, the company said, citing increased license
fees for returning series and higher NASCAR costs

There
was also a decline in Fox's ratings that more than offset higher
advertising pricing.

Operating
income for the company's cable networks rose to $563 million from $429
million in the quarter and to $2.27 billion for the year.

Advertising
revenue at the domestic cable channels grew over the prior periods by 11% for
the fourth quarter and by 3% for the full year.

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