Well the Doc opened the old mailbag today and here’s what poured out.
Dear Dr. Ads,
Rupert Murdoch has just split his News Corp empire in two: 21st Century Fox, the entertainment division, and the new News Corp print/publishing division. Wall Street sort of loves it, the New York Post really hates it, but most important – what do you think?
Well you’ve certainly come to the right place to find out what I think. But before we get to that, let’s take your other points in order.
First, the News Corp empire is indeed split, as was officially announced in a two-page newspaper ad this week. Here it is from Monday’s New York Times (must’ve killed Murdoch to fork over major six figures to his arch-nemesis, eh?):
So there you have it – print and publishing on the left, complete with a new News Corp logo; entertainment on the right, complete with the updated 21st Century Fox name.
(Also new: Murdoch’s beleaguered News International has been rebranded as News UK. As Mark Borkowski wrote in The Guardian, “[a]t News Corp we are now witnessing a methodical detoxification of the brand, to allow it to function at its best once again.”)
As for Wall Street . . . well, this Reuters headline says it all:
Free of newspapers, 21st Century Fox shines
(Reuters) – Wall Street rewarded Rupert Murdoch’s move to create a separate entertainment company, giving 21st Century Fox one of the richest valuations in the media sector on its first day of trading.
Investors had waited for Murdoch to split News Corp, giving its cable, movie and equity stakes in pay-TV assets their own spotlight away from the publishing division.
In the first day of trading as separate entities, “[s]hares in the new 21st Century Fox entertainment operation gained over 2 percent on Monday, or $1.1 billion dollars in market value, from its opening price.”
Shares of News Corp, meanwhile, fell 3 percent.
That’s reason number one the New York Post hates the split. Reason number two is that the tabloid will have to survive on its own without the entertainment division floating its clockwork annual losses, variously estimated at anywhere between $15 million and $110 million.
Finally, what does the old Doc think about all this?
Well, it’s possible the Murdoch just fell out of love with the print side of his medialith (just jettisoned wife #3 Wendi Deng knows the feeling).
It’s also possible that family and financial advisers finally prevailed upon Murdoch to kick the papers out of the nest to see which ones fly.
That sound you hear is the Post, flapping its arms frantically.