Debt, deficit and unemployment in the way of global recovery: Murdoch
Friday, September 3, 2010 at 12:00PM
Global economy is still not out of turmoil
NEW YORK (Reuters) - News Corp (NWSA.O) Chief Executive Rupert Murdoch said the global economy is still in an uncertain state and the media industry is going through a fundamental transformation that is unpredictable
"I do not believe we are out of the turmoil yet. Sovereign debt pressures, soaring deficits and unacceptable U.S. unemployment levels are key obstacles to the global economic recovery," said Murdoch in a letter to shareholders in his company's annual report published on Thursday.
"Others may see more positive signs, but I believe until these issues are addressed, markets, governments, currencies and consumer behavior will be unpredictable," he said.
Murdoch was bullish about how his company, which owns the Fox TV networks, newspapers like the Wall Street Journal and Hollywood studio Twentieth Century Fox, had navigated both the difficult economic environment and threat to traditional content business models by new Web-based services from companies like Netflix Inc (NFLX.O) and Apple Inc (AAPL.O).
He highlighted successes for the company including convincing cable operators to pay retransmission fees for its free-to-air Fox broadcast networks and the record-breaking 3D movie Avatar, now the biggest-selling movie of all time.
"I am only half joking when I wonder if there is anyone left on this planet who has yet to see Avatar," he said in the letter.
Murdoch described the 700 pence per share offer for the 61 percent of BSkyB (BSY.L) it does not already own as "attractive" and a "logical and disciplined plan."
Under Murdoch's drive News Corp units have been pushing to seek new business models which embrace technology like e-readers and tablets like Apple's iPad.
News Corp's Fox and Walt Disney Co's (DIS.N) ABC broke with other major TV studios on Wednesday to strike a deal to launch a new 99-cent rental service for Apple TV.
"Companies that do not innovate will struggle to survive," wrote Murdoch. "They will be digitally disoriented, quickly losing touch with their customers, who will be more technologically literate than those who seek to provide them with services and products."
Shares of News Corp have fallen around 3.4 percent since the start of the year.
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