‘Titanic’ Sales Boost Profit at Fox

When it comes to generating profit, “Titanic” keeps sailing along.

Thanks in part to record video sales of the Oscar-winning film, Fox Entertainment Group reported a 52% increase in net income to $105 million in the quarter ended Dec. 31, despite higher sports and network programming costs at its television group.

Revenue in the quarter rose 29% to $2.6 billion. Earnings before interest, taxes, depreciation and amortization, or cash flow, climbed 25% from a year earlier to $330 million.

The results mark the first publicly reported numbers for Fox since Rupert Murdoch’s News Corp. spun off 18.6% of the company to the public in November.

News Corp., which is Fox’s parent, said that operating income rose 8% to $556 million as revenue climbed 15%. But News Corp.’s net income slipped 14% to $339 million, in part because of an increased minority-interest charge stemming from the Fox stock sale.

In filmed entertainment, Fox said cash flow soared 134% to $173 million. Driving the results were video sales from both “Titanic”--which has sold nearly 60 million cassettes worldwide--and “Dr. Dolittle,” which has sold more than 8 million cassettes.

Another major contributor was box-office hit comedy “There’s Something About Mary,” which has grossed about $180 million worldwide. The results were offset slightly by a marginal write-off from the box-office disappointment “The Siege,” Fox said.

Fox is partners in “Titanic” with Viacom Inc.’s Paramount Pictures. Executives said that the James Cameron film will probably keep generating profit for three to four more quarters.

In television, cash flow declined 18% to $175 million, because of increased sports and network programming costs. Fox blamed higher costs from its new NFL contract, as well as the New York Yankees’ four-game sweep of the San Diego Padres in the World Series that hurt baseball playoff revenue.

In a conference call with reporters, News Corp. President and Chief Operating Officer Peter Chernin said that although there was renewed interest in baseball last year, with the home run chase by Mark McGwire and Sammy Sosa, Fox didn’t benefit that much because it sold most of its ads before the season started. He said the network should benefit more this year from the increased interest in the sport as it sells ads for the coming season.

Fox said that its NFL ratings were up over last year, with playoff ratings rising 13%. Chief Financial Officer David Davoe said that revenue for the Super Bowl would total $130 million.

Fox said results for its station group were up, because of increased advertising demand for the November elections. Executives also noted improvements in Fox News Channel results--losses dropped to $18 million from $22 million--”thanks in no small part to Mr. Clinton and the events in Washington,” Chernin said.

Separately, Chernin quashed renewed rumors that News Corp. is in talks to buy British music giant EMI. “We’ve had absolutely no conversations with EMI,” Chernin said.

He also said there are no immediate plans for Murdoch’s son, Lachlan, to move his base of operations to the U.S., adding that Lachlan Murdoch will probably continue to split his time between the U.S. and Australia.

Considered the likely heir at News Corp., Lachlan Murdoch this week was given the additional responsibilities of the company’s U.S. print business and was named to the office of the chairman.