Amplify Increases Losses

Via Leonie:

When pressed on the increased losses at Amplify, News Corp.'s digital education business, Carey pointed to the massive potential in the space. "Education is one of the few businesses that's been left out of the digital revolution," Carey said. "It's ripe for disruption."

News Corp is set to split next month:

The proposed split should happen “near the end” of the fiscal year that runs through June, Murdoch said. Total costs for the spinoff reached $53 million through the end of March, almost half of it coming in the most recent quarter.

“I am more confident than ever of the long-term value the separation will unlock for the company and its shareholders,” Murdoch said in the statement.

The plan to divide News Corp. creates a new company, 21st Century Fox, that will own the 20th Century Fox film studio and the Fox pay-TV and broadcast networks as well as Fox Sports 1, the cable sports channel that will compete with Walt Disney Co.’s ESPN.

The parent company of the Wall Street Journal and the Sun newspaper will retain the News Corp. name.

And the publishing division - which will contain Joel Klein's for profit education division, Amplify, will start behind the 8 ball:

The publishing division, which will include News Corp.’s Australian TV assets after the split, cited a drop in advertising at the company’s Australian newspapers for the profit decline.

 

Publishing will start with $2.6 billion in cash and no debt, the company said in March. The division lost $2.1 billion in fiscal 2012 because of restructuring, falling sales and the costs of a U.K. hacking scandal.

...

 

Murdoch appointed Robert Thomson, the Wall Street Journal’s editor, as CEO of the new publishing company, which also includes the New York Post, HarperCollins books, and the Amplify education division run by board member Joel Klein.

Murdoch, 82, who will remain chairman at both companies after the split, hasn’t yet proposed full board slates at either of them.

In the nine months ended March 31, News Corp. spent $165 million related to investigations in the U.K., down from $167 million in the year-earlier period. Last month, News Corp.’s directors agreed to a $139 million settlement of investors’ claims that they turned a blind eye to illegal conduct at the media company, including phone hacking by employees. The money will ultimately be recovered through insurance that covers News Corp.’s board.

News Corp. journalists are accused of hacking mobile-phone messages of more than 600 people, including U.S. actors Brad Pitt and Angelina Jolie, soccer player Wayne Rooney and murdered British schoolgirl Milly Dowler.

 There will be more hacking claims they will have to deal with in the near future as well, as a whole new line of hacking allegations was revealed recently.

Between the newspapers bleeding cash, the for profit education division losing money and additional costs related to the hacking scandal on the horizon, good luck keeping this part of the company afloat - especially after Rupert.