Murdoch media operations hit by US terror attacks

Rupert Murdoch says two of his media operations will suffer because of a sharp drop in advertising following the US terror attacks.

Earnings at News Corporation and Fox Entertainment are expected to be hit by the continued downturn in the advertising market.

But the companies say this will be offset by revenues from pay-television.

Mr Murdoch says: "The tragic and senseless events of September 11 exacerbated an already weakening advertising environment, not only in the US, but in the UK and Australia as well.

"Our revised forecast assumes a continuing weak advertising environment for the rest of the calendar year, balanced by stringent costcutting across all of our businesses and the addition of earnings from the newly-acquired Chris-Craft stations."

News Corporation also expects growth from other businesses that do not depend on advertising revenue.

Films such as Moulin Rouge and Planet of the Apes are expected to continue bringing in revenue from international and home video releases.