News Corp. Is Said to Pick Thomson as CEO of Spinoff
Rupert Murdoch’s choice of Wall Street Journal editor Robert Thomson to lead his publishing spinoff would put the company in the hands of a close lieutenant while underscoring the Journal’s role in setting strategy.
Thomson, who serves as editor-in-chief of News Corp. (NWSA)’s Dow Jones and managing editor of the Journal, will be named chief executive officer of the company’s proposed spinoff as soon as this week, a person familiar with the matter said. Murdoch, the billionaire founder and CEO of News Corp., also may outline the board makeup of the spinoff and original company, said another person, who asked not to be named because the plans are private.
News Corp., bowing to pressure from shareholders, agreed in June to break off the publishing assets, which are growing more slowly than its Fox entertainment businesses. Putting Thomson in charge of the publishing spinoff would help Murdoch preserve his vision for the company, said Ken Doctor, an analyst at Outsell Inc., a Burlingame, California-based research firm.
“Robert Thomson has been well-schooled in the College of Murdoch,” said Doctor, who covers the publishing industry. “They have long worked closely, and, in a sense, this is a continuation of that partnership.”
Nathaniel Brown, a spokesman for New York-based News Corp., declined to comment on whether Thomson had been picked as CEO.
In choosing Thomson, Murdoch passed over Tom Mockridge, CEO of News International, the company’s U.K. publishing group. Mockridge now plans to step down by the end of the year, News Corp. said in a statement dated Dec. 3.
``His decision to step down is absolutely and entirely his own,'' Murdoch said in the statement.
Murdoch hired Thomson, a fellow Australian, to run the Journal in 2007 and appointed him head of Dow Jones the following year. Thomson, 51, had served as editor of the Times of London, where he bolstered Internet readership. Before that, he was editor of the U.S. edition of the Financial Times.
The new job still would entrust the management of a global media corporation to a career journalist, rather than an experienced CEO. Thomson has worked in newspapers since 1979, when he began as a copyboy at the Herald in Melbourne.
Thomson would need to reinvigorate a business suffering from shrinking profit and a scandal at its U.K. newspapers. Even so, the operation will have a clean balance sheet, with no debt and “very large reserves of cash,” Murdoch said when the plan was proposed in June.
Murdoch will remain CEO of News Corp.’s entertainment company after the spinoff and serve as chairman of both entities. That means the outspoken 81-year-old will continue to loom large at the new business, Doctor said.
“There’s little room between Murdoch as chairman of the new company and Thomson as CEO,” he said.
News Corp. shares fell 0.3 percent to $24.64 on Nov. 30, the most recent trading day. The stock has climbed 38 percent this year.
In the new role, Thomson will have to confront a lingering scandal in the U.K. News Corp. closed its News of the World newspaper in July 2011 in response to public anger over revelations that journalists accessed messages on a murdered schoolgirl’s mobile phone nearly a decade earlier. The investigation spawned parallel probes of computer hacking and bribery and led to the arrests of more than 80 people, including the unit’s former head of security and its top lawyer.
Mockridge had replaced Rebekah Brooks last year as head of the U.K. division in the wake of the scandal.
In addition to operating the Wall Street Journal and Times of London, the spinoff will include other newspapers in the U.S., U.K. and Australia, as well as the HarperCollins book division, education and marketing assets. News Corp. has said it will complete the breakup by the middle of next year.
News Corp. acquired the Wall Street Journal as part of its purchase of Dow Jones in 2007. When Thomson ascends to the CEO job, Gerard Baker, his deputy at the Journal, will replace him as managing editor, one of the people familiar with the situation said.
Of News Corp.’s newspapers, the Journal has the most growth potential, and Thomson’s ascension signals that the publication will be the heart of the spinoff, Doctor said. The paper has pioneered the use of video, advertising and tablet computers among news organizations, he said. It also was an early convert to paid Internet subscriptions, an approach copied by the New York Times Co. (NYT) and other rivals.
The Wall Street Journal is the largest circulating weekday newspaper in the U.S., with 2.29 million readers, according to the most recent figures from the Alliance for Audited Media. The paper’s circulation gained 9.4 percent from a year earlier.
“It has global business potential, while all the regional papers, each in their own ways, are constrained by being non- global players,” Doctor said.
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