News Corporation Loses $606m

Rupert Murdoch's News Corporation yesterday admitted to overpaying for a trio of sports broadcasting contracts as it fell to an operating loss of $606m (£415m) for the second quarter.

The company said it was writing off $909m against the sports contracts, which have failed to attract the levels of advertising it had hoped for.

The deals affected are with the national football league, major baseball league and Nascar motor racing. "The prices being paid to sport and sporting bodies have got beyond an economic level," Mr Murdoch said. "And that's not just in the US but everywhere else as well."

Mr Murdoch, pictured above, said the advertising environment was the "worst since world war two" but he saw some signs of improvement, particularly in the US.

The UK newspaper group, which includes the Sun and the Times reported a 13% fall in operating profit and a 19% decline in advertising revenues.

The results also reflected a number of poor investments in Europe.

The total one-off charge for the quarter was $809m which takes in the sports write-off, a charge related to the pending sale of News Corp's interest in the Italian broadcaster Stream, and a charge against the declining value of Kirch Media in Germany.

The figure would have been far higher but for a one-off gain from the sale of a stake in Fox Family Worldwide.