Following a burst of intense coverage, a quick post to explain something that got convoluted starting with Rupert Murdoch’s comments at The Daily launch. News Corp (NSDQ: NWS) CFO Dave DaVoe estimates its investment in the iPad app will run $30 million by the time fiscal 2011 ends in June. That includes $7 million in the just-reported Q2 and a current run rate of nearly a half-million dollars a week.
Murdoch said during the launch Q&A that the investment was part of a write down the company would announce in earnings but he misspoke. The Daily is included in the publishing segment and has nothing to do with the $275 million write down incurred primarily by restructuring at MySpace.
Backing out from the $30 million figure, there’s a $10 million gap between the reported investment and the run rate total for the last two quarters of the fiscal year. I asked about how that fits in but have no response.
At the run rate mentioned by Murdoch and confirmed by DaVoe, The Daily‘s annual costs would be nearly $26 million. That doesn’t include additional staffing or development. It also doesn’t account for the offset from subscription and advertising revenue.
Asked during the earnings call when he thought The Daily would break even, COO Chase Carey dryly replied: “Five hours into its first day, I’m not going to predict a break-even point.”