News Corp can't predict success in downturn: Murdoch

NEW YORK (Reuters) - Rupert Murdoch said he cannot predict a successful 2009 for News Corp given the economic turmoil, but his media empire has a $5 billion cash war chest and extended debt repayment dates to see it through the global financial crisis.

"It's tempting, of course, to stand here and boast about next year's success. I cannot do that," Murdoch, chairman and chief executive of News Corp, told shareholders at the company's annual meeting in New York on Friday.

The crisis "has left no sector untouched, ours included," he said. "It has weakened the advertising markets and beaten down our share price. But I will tell you that we have prepared ourselves well for this day."

Fellow media companies Viacom Inc and CBS Corp have warned that deteriorating advertising sales would hit their profits, showing that the Wall Street crisis that has torn down prominent financial institutions is also hitting the media sector harder than previously thought.

News Corp, whose shares have lost 60 percent of their value in the past 12 months, gave no sign that it would take similar action, though analysts have said that they expect more media companies to warn shareholders.

The company depends on advertising at many of its businesses, which include Dow Jones and The Wall Street Journal; the Fox film studio, news and business channels; dozens of newspapers and magazines worldwide; sports league stakes; the MySpace online social network; and satellite and television networks.

Murdoch told investors that News Corp has a strong balance sheet and a good array of businesses to help it in the event of a prolonged economic downturn.

In addition to $5 billion in cash, News Corp has extended its average debt maturity to more than 22 years, he said.

In addition, the Murdoch family trust is carrying no debt on its controlling stake in News Corp, Murdoch said in response to a shareholder question.

His answer is significant because of the effect that such debt can have on shares.

If Murdoch had debt obligations to meet, particularly given the credit crunch, he could be forced to sell the already depressed News Corp shares at a discount in the open market, something that would likely further depress the price.

In recent days, media mogul Sumner Redstone sold shares in Viacom and CBS, where he is the chairman and the largest shareholder. His plans to sell the shares contributed to massive downward pressure in the stocks.

Separately at the shareholder meeting, Murdoch said that enough shareholders voted their shares in favor of reelecting News Corp's directors.

News Corp shares fell 12 cents, or 1.3 percent, to $9.22 on the New York Stock Exchange.

(Editing by Phil Berlowitz)

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