Octogenarian media mogul Rupert Murdoch began his rise to global power and riches when, at 21, he inherited his father’s newspaper business in Australia. Under his tough hide, Murdoch has had a soft spot in his heart for newspapers ever since, which is why he is splitting off the publishing side of his empire from the entertainment side.
At Murdoch’s urging, News Corp shareholders have approved the division. Remaining under the News Corp umbrella will be 120 newspapers, including the Wall Street Journal, the New York Post, The Times of London and the Australian, plus HarperCollins book publishers. Murdoch’s more profitable operations — Fox News, Fox broadcasting, the Fox sports networks, cable channel FX and the 20th Century Fox movie studio — will be gathered under a new entity called 21st Century Fox. The separation is set to take effect June 28.
Without this step, the likely scenario was that the newspapers would be sold off about 10 minutes after news of Murdoch’s death. Too many shareholders saw the publishing side as a drag on the company and harbored no feelings of nostalgia about print media. Murdoch still believes his newspapers can weather the current slump in the business of journalism, and now they will have a chance to give it a good shot. Besides having the support of the investors who are sticking with News Corp, the newspapers will start fresh with no debt and a $2.6-billion operations and acquisitions fund.
The TV and film divisions have accounted for 85% of News Corp revenues in recent years. The publishing side, meanwhile, has been on a steady slide. Murdoch has saved the newspapers from a premature death. Now the world will see if they can do more than totter along to an eventual demise.