In what is likely to be his last major corporate move at the age of 82, Murdoch is making a “bold bet” that the publishing side of his empire, which will trade under the old name of News Corp, is capable of “[going] it alone as a dedicated publishing company,” with rival newspaper groups such as the New York Times slimming down their assets, and others such as Gannett “diversifying away from publishing by buying other media assets,” says the Guardian.
The media mogul is firm in his belief that the future of newspapers is bright, arguing that the collapse of print advertising is a mere obstacle in the journey of his assets (including The Times and The Wall Street Journal) towards a profitable digital future. However, Bloomberg reported today that, having been admitted to the Australian Securities Exchange (ASX) at 10am (AEST) on Wednesday, New News Corp “fell in its Sydney debut as stock in the billionaire’s newspaper assets started trading separately in a split from his entertainment businesses.” New News Corp was valued at $15.00 per share as it debuted on the market and dropped to $14.5 within 40 minutes, whilst 21st Century Fox, Murdoch’s entertainment empire, was selling shares at $30.170, more than twice its sister company’s value.
The split comes as a result of pressure from shareholders disappointed with the returns from the corporation’s publishing assets, which include HarperCollins and the newspaper division whose reputation was severely tarnished by the phone hacking scandal, and whose profits have crumbled due to the shift towards digital readership.
In the quarter which ended 31 March, News Corp’s operating income from publishing collapsed nearly 35% to $85m (£54m), whilst it spent another $42m dealing with the aftermath of the hacking scandal. The total operating income of $1.36bn (£871m) was nearly all generated by the entertainment assets, including the 20th Century Fox movie studio and Fox broadcast network in the US. Analysts and shareholders are therefore overwhelmingly in favour of the split, since it produces a stand-alone 21st Century Fox which can no longer be dragged down by the newspaper side of the business.
Shares will not start trading properly until 1 July, when Murdoch’s decision to split his corporation will be truly tested.