Murdoch predicts further DirecTV growth
We’ll send you a myFT Daily Digest email rounding up the latest US & Canadian companies news every morning.
DirecTV, the US satellite broadcaster controlled by News Corp, will break even within a year and is increasing its subscriber base at double the rate expected, Rupert Murdoch, chairman of the media and entertainment group, said on Tuesday.
Mr Murdoch said DirecTV was on course to reach 14m subscribers by Christmas, an increase of 2m in just 12 months and double the 1m News Corp had anticipated when it bought a 34 per cent stake in the loss-making group late last year.
?We've been very surprised by DirecTV,? Mr Murdoch told News Corp's annual meeting in Adelaide, noting the growth had come about with only a small increase in marketing spending since the acquisition.
?I see no reason why we will not get the same growth next year,? he added.
Mr Murdoch's comments came as the media group's shareholders voted overwhelmingly in favour of its planned move from Australia to the US. The proposal which just a month ago appeared in danger of failing was supported by more than 90 per cent of those who voted.
Shareholder approval clears the way for the media group to be re-incorporated in the US state of Delaware and for completion of a related A$2.95bn (US$2.2bn) transaction, under which News Corp will acquire Murdoch family interests in a group newspaper subsidiary in Australia.
Mr Murdoch predicted that within a year News Corp stock would be included in New York's benchmark S&P500 index, one of the main reasons for the move.
He also said on Tuesday that the group was on track to achieve its target of operating income growth in the mid to high teens in percentage terms for its fiscal year to June 2005.
?With our first quarter already behind us, those estimates remain achievable,? Mr Murdoch said.
The shares, which had fallen heavily since News Corp announced its plans to leave Australia in April, rallied 3.1 per cent to A$10.76 in Australian trading on Tuesday.
?This is a turning point for News Corp,? said Goldman Sachs JB Were, an Australian broking house. ?US investors now know exactly where they stand.?
Australian institutions, which control about 20 per cent of News Corp, had threatened to block the move unless the group strengthened its corporate governance provisions. The transaction will leave Murdoch family trusts with 29.5 per cent of News Corp's voting stock and 12.6 per cent of the equity.
Get alerts on US & Canadian companies when a new story is published