News Corp. spent $104 million dealing with phone-hacking probes in 2011
For the second time in a row, Rupert Murdoch was a no-show on News Corp.'s quarterly earnings call, leaving it to his right-hand man and potential company heir, C.O.O. Chase Carey, to field inquiries from Wall Street analysts and the press.
As expected, most of the questions reporters lobbed at Carey pertained to the still very much ongoing U.K. phone-hacking saga that has battered the media conglomerate for seven months.
In the last quarter alone, ending on Dec. 31, investigations into the scandal cost News Corp. $87 million, according to an earnings release issued Wednesday afternoon. The total tab for the six months ended Dec. 31 reached $104 million, more than 85 percent of which stems from "professional fees," and about 15 percent from settlements, said C.F.O. David Devoe. He declined to specify how much the company had set aside in the coming year for such costs.
Carey, meanwhile, said the company expects its U.K. publishing segment, which shuttered the top-selling Sunday tabloid and phone-hacking culprit News of the World last summer as a way to mitigate fallout, to be down $150 million in 2012.
"This is clearly a tough year," said Carey, citing "significant year-over-year declines in the U.K. papers," mostly due to the closure of News of the World.
"But as we've said many times, we're committed to making things right in the U.K.," he said.
An Associated Press reporter asked Carey how far into the future News Corp. expects to be shelling out for phone-hacking-related expenses.
"Our priority on this is to make things right, and it's not that we're not gonna try and be intelligent about the cost, but our priority is to get on top of this and make things right," said Carey. "We're not gonna predict or target it."
News Corp. finished the last quarter with a two-percent year-over-year revenue increase to $8.98 billion, and net income of $1.06 billion, up from $642 million during the same period a year earlier.