Mr Murdoch has warned of possible job losses
News Corp has made a $6.4bn (£4.4bn) quarterly loss, as falling advertising revenues forced it to cut $8.4bn from the value of assets.
The media giant's net loss for the three months to 31 December compares with a profit of $832m a year earlier.
Revenues at the firm, which owns BSkyB, 20th Century Fox, and the New York Post and Sun newspapers, were down 8.4%.
Owner Rupert Murdoch said the economic downturn was "more severe" than first thought, and warned of likely job cuts.
"We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate," said Mr Murdoch.
News Corp's main other businesses include publisher HarperCollins and social networking website MySpace.
News Corp's results were worse than market expectations.
In addition to falling advertising revenues at its TV and newspaper interests, News Corp said it had been hit by lower DVD and book sales.
The quarterly loss was New Corp's first in more than three years.
It now predicts a 30% fall in operating profits for its fiscal year to the end of June.
"Our results for the quarter are a direct reflection of the grim economic climate," added Mr Murdoch.
Analyst David Joyce of Miller Tabak, said News Corp was "more exposed to advertising than you want to be in this kind of climate".