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British actor Hugh Grant, shown outside Parliament in July, 2011, has accepted a ‘substantial sum’ after settling his phone-hacking damages lawsuit against the publishers of the now-defunct News of the World, his lawyer said on Friday, Dec. 21. Mr. Grant will donate the money to ‘Hacked Off,’ a pressure group that helped bring about a public inquiry into U.K. press practices. He was one of several high-profile individuals who suted the British arm of Rupert Murdoch’s News Corp. (Stefan Rousseau/AP)
British actor Hugh Grant, shown outside Parliament in July, 2011, has accepted a ‘substantial sum’ after settling his phone-hacking damages lawsuit against the publishers of the now-defunct News of the World, his lawyer said on Friday, Dec. 21. Mr. Grant will donate the money to ‘Hacked Off,’ a pressure group that helped bring about a public inquiry into U.K. press practices. He was one of several high-profile individuals who suted the British arm of Rupert Murdoch’s News Corp. (Stefan Rousseau/AP)

News Corp. says publishing wing lost $2-billion Add to ...

Rupert Murdoch’s News Corp. said the publishing arm it plans to spin off from its entertainment assets would have lost $2.08-billion (U.S.) in the last fiscal year if it were a standalone company.

News Corp. filed with the U.S. Securities and Exchange Commission on Friday to separate its publishing and entertainment assets into two publicly traded companies. News Corp. first announced the decision in June after shareholders pressed it to get rid of its troubled newspaper business.

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“New News Corp.,” as the company dubs its publishing wing, will include newspapers, information marketing services, digital real estate, book publishing, digital education, and sports programming and pay-TV distribution in Australia, the company said on Friday.

News Corp.’s film and television businesses currently include the 20th Century Fox film studio, Fox broadcasting network and Fox News channel, which will be part of the renamed parent company that will be called Fox Group.

The loss included an impairment charge of around $2.6-billion, News Corp said in a filing, but it added that revenue fell 5 per cent, hit by the 2011 closure of the News of the World paper after the U.K. phone hacking scandal, and lower revenues at its Australian papers.

The $2.08-billion annual loss compares with a profit of $678-million a year earlier.

The unit would have reported a net loss of $92-million in the three months that ended Sept. 30, hurt by lower advertising revenue and higher operating costs, it said.

The filing shows the publishing unit’s earnings before interest, taxes, depreciation and amortization or EBITDA, a figure used by Wall Street to reflect the company’s operating performance, slipped to $782-million in 2012 from $1.21-billion in 2011.

BTIG analyst Richard Greenfield called the new financial details unsurprising and said that the key information for investors – the two companies’ plans for debt and cash – were absent from the filing.

“The amount of debt and cash to be assigned to each company is not finished yet, and that’s what investors are focused on,” Mr. Greenfield said.

He expects that information to be revealed in the first quarter, and said he hopes that “as little cash as possible is infused into the publishing” wing.

The publishing division now includes the HarperCollins book publisher, its education arm headed by former New York schools Chancellor Joel Klein, and newspapers, including The Wall Street Journal, The Times of London, The Sun, The New York Post and The Australian.

Robert Thomson, a close confidant of Mr. Murdoch and currently managing editor of The Wall Street Journal and editor-in-chief of its publisher, Dow Jones & Co., will lead the new publishing company.

Mr. Thomson will receive a base salary of $2-million annually and a performance-based annual bonus with a target of $2-million. After three years, he will receive annual grants of a performance-based long-term incentive award.

Mr. Murdoch will retain his role as chairman and CEO of the parent and his compensation for the roles is expected to increase slightly. He received a base salary of $8.1-million and a bonus of $10.4-million, apart from stock awards and other compensation, which put his total compensation at about $30-million for fiscal 2012.

The phone hacking scandal erupted at the News Of The World last year, forcing the company to close the paper in July and drop its proposed purchase of the rest of BSkyB, its British pay-TV network.

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