By Warner Todd Huston ——Bio and Archives--July 2, 2012
American Politics, News | CFP Comments | Reader Friendly | Subscribe | Email Us
The entertainment assets make up by far the bulk of the company, contributing three-quarters of the $25.34 billion in revenue for the first nine months of the fiscal year. Those assets accounted for roughly 90% of the operating profit in that period. In the nine months through March, News Corp.’s various segments together had operating profit of $4.2 billion, of which the publishing division contributed $458 million.Obviously the entertainment division has been quite successful and industry watchers have noted that the troubles besetting the publishing arm could be dragging down the more successful portion of the company. Britain isn’t the only nation looking into News Corp’s phone hacking scandal. The U.S. Justice Department is also looking into the scandal hunting for evidence of bribery and wiretapping. So it may be a good move to shield the currently successful entertainment division from any future legal fallout. Clare Enders, founder of the media research company Enders Analysis, says that the TV and entertainment assets have been “run on a standalone basis” and without the publishing assets dragging it down would see its valuation at a much higher level. Clearly Murdoch and News Corp leaders are worried about the continuing investigation into the phone hacking accusations centered on the British newspapers and want to make sure the entertainment division is on secure footing. Enders thinks she sees Rupert Murdoch’s fingerprints all over this move, so there would be no truth to any claim that Murdoch has been forced to this decision by board members or others. “He is a corporate action man. He’s a doer,” Ender said. Reports say that News Corp is working with bankers at Centerview Partners, Goldman Sachs, and JP Morgan as well a she lawyers at Skadden Arps. Industry watchers also say that there is little doubt that this split will occur. “It sounds pretty well along,” said Canaccord Genuity Inc analyst Thomas Eagan. Finally, there is no indication what this move might portend for Fox Television heads Peter Rice and Kevin Reilly but News Corp’s current number 2 man is seen as the likely candidate to take the head of the new entertainment division.
View Comments
Warner Todd Huston’s thoughtful commentary, sometimes irreverent often historically based, is featured on many websites such as Breitbart.com, among many, many others. He has also written for several history magazines, has appeared on numerous TV and radio shows.
He is also the owner and operator of Publius’ Forum.