News Corp. Discussed Spinning Off Publishing BusinessEdmund Lee
News Corp., facing inquiries by authorities over hacking and bribery at its U.K. newspapers, has discussed spinning off its publishing business, according to Chief Operating Officer Chase Carey.
Carey had a number of talks with News Corp. executives about selling or separating the publishing unit from the company, he said today at the Deutsche Bank media conference in Palm Beach, Florida.
“There certainly is an awareness” that New York-based News Corp. would trade at higher multiples if it didn’t own newspapers, Carey said in response to a question.
News Corp., based in New York, owns the Wall Street Journal and the New York Post in the U.S., as well as the Times, Sun, and just-introduced Sun on Sunday in the U.K. The company derives more than 70 percent of its operating income from its television businesses that includes Fox Broadcast and the FX cable channel. Publishing accounts for less than a fifth of annual operating income and is “significantly down year-on-year on profitability,” according to Carey.
News Corp. rose 1.6 percent to $19.81 at the close in New York. The shares have gained 11 percent this year.
For the moment, the company is focusing on increasing profit margins at the publishing businesses, Carey said. He left open the possibility the board could consider a spin off.
“As a board, we will and have and will continue to discuss everything that we think that makes sense,” Carey said.
Sun on Sunday
Chief Executive Officer Rupert Murdoch, who paid $5.2 billion for Wall Street Journal owner Dow Jones & Co. in 2007, started the Sunday edition of the Sun tabloid this past weekend. It sold 3.26 million copies in its debut, topping the circulation of its News of the World predecessor that was shut down last year following an outcry over reporters who had hacked into mobile phones.
At least three separate inquiries into the practices of News Corp.’s U.K. journalists have revealed possible bribery of public officials and more than 800 potential victims of hacking. Ten Sun journalists have been arrested in the police investigation into corrupt payments to police officers and other public officials. The hacking scandal has cost News Corp. $195 million since July, according to the company.
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