News Corp. split likely to help WSJ
by Chris Roush
Jeff Bercovici of Forbes.com writes that the proposed split of News Corp. into two companies — with one for the newspaper operations — would likely benefit The Wall Street Journal.
Bercovici writes, “If and when the split takes place, News Corp. plans to endow the print entity with a significant cash nest egg. Analysts expect much of that cash to go toward building up WSJ. ‘That’s where News Corp. is going to put major investment because it’s got the greatest growth potential,’ says Ken Doctor of Outsell.
“The spin-off also offers a measure of strategic maneuvering room that WSJ lacked before. News Corp. has been looking forward to the end of an exclusive partnership between the paper and CNBC, which expires this December. That would free up the company to the Journal with its own Fox Business Network, which has had trouble establishing itself as a viable competitor to CNBC. Such a partnership, however, would be a much better deal for Fox Business than for WSJ, and Robert Thomson, the paper’s managing editor, has hinted that the Journal might prefer to focus on its own video offerings.
“Once WSJ and Fox Business are no longer under the same roof, the drive for synergy disappears, replaced by a legal requirement to maintain ‘arms-length’ dealings between the two companies. Without pressure to make a shotgun marriage with a corporate cousin, the Journal is more likely to seek a partnership with another major international player, perhaps CNN, if it partners with anyone, says Doctor. ‘The Journal’s interest is not in sticking with Fox Business,’ he says.”
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