It may be years before anyone can figure out the real cost to News Corp. and its shareholders of the UK hacking scandal that has dominated the headlines for months. For now, whatever the reputation cost for Rupert and James Murdoch or the financial impact of losing the chance to own all of BSkyB, News Corp.’s hacking losses are barely a blip.
News Corp. spent $63 million on hacking-related costs in the quarter ending March 31; overall in the first nine months of fiscal 2012, costs related to the ongoing investigations dating back to the closure of The News of the World last summer have run to $167 million. In addition, the NotW closure plus some currency changes in Australia contributed to a $31 million drop in publishing revenue last quarter.
Compared with $8.4 billion in revenues for the quarter, up 2 percent over last year, and total operating income of $1.31 billion, up 23 percent over the same quarter in 2011, $200 million or so is enough to take earnings per share down a couple of cents but it’s not the kind of hit you might expect on a company being bombarded with negative publicity in a very public way.
Rupert Murdoch skipped the earnings call but COO Chase Carey took strong exception to some last week’s findings by the select Parliamentary committee exploring News International’s role in hacking. Carey said he and the board agree with some of the “hard truths” but not the “partisan” claim that Rupert Murdoch is unfit to lead a media company:
“He’s one of the smartest, more forward thinking executives of his time and the board and I reject any notion that he is unfit.”
Full earnings details in the release.