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News Corporation to Pocket $US1 Billion from BSkyB Float

Strategic Insights

— 1 min read

Rupert Murdoch's News Corporation expects to strengthen its balance sheet by $US1 billion after the impending float of its British satellite broadcasting venture, BSkyB. The injection of cash, which will occur by the end of this calendar year or January at the latest, will include the repayment of loans and a valuation of approximately $5 billion for the entire business. BSkyB, a former underperformer, is now generating significant dividends and repaying shareholder loans, sparking optimism among analysts.

Key Takeaways:

  • News Corporation expects to earn $US1 billion in cash from the BSkyB float, strengthening its balance sheet.
  • The float, expected to occur by the end of this calendar year or January at the latest, will involve the repayment of loans and a valuation of approximately $5 billion for the entire business.
  • BSkyB, a former underperformer, is now paying big dividends to shareholders and repaying their loans.
  • STAR TV, News Corporation's Asian satellite broadcasting venture, is running "off budget" with a loss of $US12 million to $US14 million this fiscal year.
  • STAR's audience figures are expected to grow to 90 million homes by 1996, covering 400 million people or 12% of the world's population.
  • Fox Broadcasting is expected to lose $US100 million on its US National Football League rights, but this will not significantly impact profits.
  • Early ad bookings are up 30 to 60% for Fox this fiscal year.
  • News Corporation has no plans for pay TV in Australia, citing too many players and a potential 10-year waiting period for dividends.
  • The company has "absolutely" no plans to divest or sell its Australian newspaper operations.

Statistics:

  • News Corporation expects to earn $US1 billion in cash from the BSkyB float.
  • The float will involve a valuation of approximately $5 billion for the entire BSkyB business.
  • BSkyB is currently paying big dividends to shareholders and repaying their loans.
  • STAR TV is expected to cover 400 million people or 12% of the world's population by 1996.
  • Fox Broadcasting's early ad bookings are up 30 to 60% this fiscal year.
  • BSkyB's audience figures are expected to grow to 53.7 million homes in Asia and the Middle East by 1996.

Sources:

  • "News Corporation expects $1billion from BSkyB" by Ben Potter, published in an unknown Australian newspaper or magazine, no date specified.

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