UPDATE 1-Dow Jones costs News Corp $2.8 bln in writedown

Fri Feb 6, 2009 3:19pm EST

(Adds Dow Jones cost cuts, byline)

By Robert MacMillan

NEW YORK Feb 6 (Reuters) - Rupert Murdoch's News Corp (NWSA.O) wrote down half the value of Wall Street Journal parent Dow Jones & Co, which it bought for $5.6 billion in 2007, according to a U.S. regulatory filing on Friday.

The company said in a separate statement that it plans to save an additional $40 million at Dow Jones in the fiscal year ending in June 2010. That would be on top of $100 million in costs savings implemented since buying Dow Jones in 2007, News Corp said.

A spokesman declined to reveal the total number of staff cuts News Corp plans for Dow Jones or how many jobs it has eliminated already.

A memo was sent to Dow Jones employees on Thursday that said The Journal had cut 25 jobs but that there would not be layoffs at Dow Jones Newswires.

Rupert Murdoch's media conglomerate said cost-savings measures that Dow Jones has made include outsourcing some jobs, consolidating office space and integrating Dow Jones' corporate functions with those of News Corp.

Dow Jones said it would freeze employee salaries, which Reuters previously reported based on a memo that it obtained.

News Corp's quarterly results on Thursday include an $8.4 billion writedown for its broadcast and newspaper properties, pushing the company into a net loss for the quarter. Of that, $2.8 billion was for Dow Jones, News Corp said in a filing with the U.S. Securities and Exchange Commission on Friday.

The international media conglomerate paid $60 per share for Dow Jones, 65 percent higher than its market value at the time. Besides the Journal, Dow Jones also owns the weekly Barron's, the Factiva online news archive, and the business news website MarketWatch.com.

Some analysts and media watchers have criticized the breathtaking premium, saying that had Murdoch waited longer for financial markets to deteriorate and advertising revenue to weaken, he could have had Dow Jones for less money.

A further $185 million included in the writedown was for the New York Post, said a source familiar with the matter but not authorized to talk about the filing. Murdoch has long maintained the racy and popular tabloid despite its history of losing money.

Dow Jones' statement on Friday said it has closed three of its 17 Wall Street Journal production facilities, and is discussing partnerships with other companies for printing and delivering the Journal and Barron's.

News Corp shares rose 7 cents, or 1 percent, to $7.01 on Nasdaq late Friday afternoon. (Reporting by Robert MacMillan; editing by John Wallace, Richard Chang)

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