News Corp. Execs Meet in New York to Discuss Splitting the Company in Two
As News Corp. considers a split into two companies -- and Wall Street celebrates the possibility -- top executives were arriving in New York on Tuesday to discuss strategy with Rupert Murdoch, according the New York Times.
Discussions are focused on whether the entertainment assets should be spun out from the more stagnant print businesses, so some of the editors and publishers from among 175 or so News Corp. publications worldwide are meeting in New York.
According to the Times, the gathering includes Murdoch and his son James Murdoch and News Corp. COO Chase Carey, along with representatives from the Wall Street Journal, the New York Post the Times of London and other newspapers belonging to News Corp.
Some shareholders and analysts have been lobbying for News Corp. to split into two companies, much like Viacom split with CBS six years ago in a way that allowed Sumner Redstone to maintain control over both companies.
On Tuesday, News Corp. shares rose 8 percent to $21.96, a 52-week closing high. The stock is up from a dip below $16 at the height of the News of the World phone-hacking scandal a year ago but still less than where it traded in parts of 2007, which preceded a major U.S. recession. At the end of trading Tuesday, News Corp's. market capitalization was $53.2 billion.
While Murdoch ridiculed Redstone's Viacom-CBS decision several years ago, he is apparently poised now to follow his rival mogul's lead in creating two major media companies out of one.
Newspaper publishing is a slow-growth business in general that in News Corp's. case is also tainted by the scandal that put an end to News of the World. A company made up entirely of News Corp's. publishing assets could be buoyed by the inclusion of some digital assets and a new education division, the Times reported on Tuesday. The HarperCollins book business would also be part of such a company.
News Corp's. TV, film and other entertainment assets brought in $23.5 billion in revenue during the most recent fiscal year while the publishing business contributed only $8.8 billion.