Monday 27 June 2011

News Corp. profits to lift off

 Earnings at News Corp.'s U.K. paybox BSkyB are set to double in five years' time once the company is owned outright by the Murdoch firm.
U.K. media analyst Toby Syfret predicts that the satcaster's earnings before interest and tax will rise from £845 million ($1.3 billion) in 2010 to £1.7 billion ($2.7 billion) in 2015.
During the same period revenue is forecast to increase from £5.7 billion ($9.1 billion) to £8.1 billion ($13 billion), bigger than the combined revenues of rivals the BBC, ITV, Channel 4 and Channel 5.
U.K. media minster Jeremy Hunt is expected this week to give the green-light, subject to a short consultation, to News Corp.'s purchase of the 61% of the paybox it does not own already.
Syfret, who works for Enders Analysis, said a wholly owned BSkyB would lead to big benefits for the company's bottom line due to the opportunity it will present for cutting content acquisition costs and marketing spend.
"Even for a big global player like News Corp., BSkyB represents a major addition to the consolidated accounts and carries great strategic significance," Syfret told the Financial Times.
He added: "BSkyB is on a high growth trajectory over the forecast period of 2010-2015, one that is practically unique among media companies around the world."
Meanwhile, Odey Asset Management has said the satellite broadcaster is now worth £19 billion ($30.3 billion), which would mean that News Corp. will have to pay £11.6 billion ($18.5 billion) for the stock that it does not yet own.

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