News Corp unveils bumper profits

Rupert Murdoch's News Corporation is expected to report its fourth successive quarter of growth as the media tycoon gears up for a new battle for control of America's biggest satellite TV network.

News Corp is expected to announce a 25% increase in profits tonight in New York, with underlying revenue estimated up more than £400m - an increase of almost 40% on the fourth quarter last year.

The announcement is expected to be used to send a message to General Motors, the owner of satellite TV giant DirecTV, which Mr Murdoch has been pursuing for years.

His dream of taking over DirecTV and establishing a global satellite TV network straddling the US, the UK, Asia and Australia, was stymied when Charlie Ergen, an old foe of Mr Murdoch and owner of DirecTV's rival Echostar, beat him to the deal.

However, Mr Murdoch is now back in play after the anti-trust authorities rules Echostar's takeover anti-competitive.

"Rupert is really anxious to get DirecTV, there is no question about that," one News Corp insider told the Financial Times.

"It is not just about winning subscribers but changing the whole model of News Corp's content output in the US," the source said.

With 12 million subscribers, control of DirecTV would make Mr Murdoch one of the single most powerful distributors in the US, giving him the opportunity to pump out as much of his own material from Fox studios and his Fox TV networks as he wants.

At a meeting yesterday Mr Murdoch yesterday urged the media giant's board members to focus on improving cash flow, according to senior executives.

And, coupled with the dramatic strengthening of the media giant's balance sheet, all the signs are that he is preparing for the acquisition of North America's largest satellite broadcaster, DirecTV.

Mr Murdoch said last week the company was only interested in one deal right now.

"We're running a very conservative ship at the moment. We're not in the business of deals at the moment. Except for one," he told US magazine Fortune.

"That'll be the big exception," he added, referring to DirecTV.

Mr Murdoch's interest has been spurred on by revelations at the weekend that he has a rival - the US telecoms giant SBC Communications has been in talks to buy DirecTV in a deal that could be worth more than £6bn.

An alternative for Mr Murdoch is a deal with DirecTV's rival Echostar, which has 8 million subscribers.

One of the key players in any deal will be John Malone, the cable TV giant and single largest shareholder in News Corp.

News Corp is expected to team up with Liberty Media to make an offer for Hughes, the General Motors subsidiary that owns DirectTV.

Liberty Media is controlled by John Malone, best known in the UK for investments in debt-laden cable TV operators Telewest and NTL.

BSkyB is seen as the key to Mr Murdoch's plan for his global TV operations.

On Friday the British satellite broadcaster's results are expected to reveal it has increased its subscriber base to more than 6.5 million, with profits doubling to around £140m.