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The real prize of a News Corp. split

Tuesday, June 26, 2012 - 02:29

June 26 - A possible split of Rupert Murdoch's News Corp could yield some surprising benefits- including the trophy asset they have been after for years. Bobbi Rebell reports.

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Rupert Murdoch's News Corp. is mulling splitting its publishing and entertainment businesses. And the divorce may actually help them get their trophy, BSkyB, according to MediaTech Capital Partners' Porter Bibb. SOUNDBITE: PORTER BIBB, MANAGING PARTNER, MEDIATECH CAPITAL PARTNERS (ENGLISH) SAYING: "Spinning off the print will very- and probably Rupert and James with it- could free up News Corp., the parent to go forward and acquire the 40 or 50 percent of BSkyB that it gave up last summer when the phone hacking situation broke; because the issue there is parliament and the Ofcom, the British FCC, have deemed Mr. Murdoch an unfit and not a proper person to run a proper broadcast property, if he is out of the parent News Corp. and running the print side, no problem." Investors cheered the news- driving the stock up more than 8 percent. Here's how a News Corp split could look. On the print side, you have about $8.8 billion in revenues last year. But that is dwarfed by the numbers on the entertainment side where you are looking at about $23.5 billion. And a split makes strategic sense according to Evercore Partners Alan Gould: SOUNDBITE: ALAN GOULD, MANAGING DIRECTOR, EVERCORE PARTNERS (ENGLISH) SAYING: "Strategically, there wasn't much synergy between the publishing assets and the other assets at News Corp. If you want to stretch, perhaps Fox News news channel was using some information from Wall Street Journal-Unlikely. Maybe Fox Business Channel might have been using some information or common reporting with the Wall Street Journal. Other than that, the publishing business has been a deteriorating business. " The entertainment business would be the star performer: SOUNDBITE: PORTER BIBB, MANAGING PARTNER, MEDIATECH CAPITAL PARTNERS (ENGLISH) SAYING: "Terrific opportunity. Great management at each of the individual operating units. They have television. They have broadcast. They have content production and they have film. All of those are cooking on all burners and really doing well." The heat will, however, remain on Mr. Murdoch and his son James. There is no separating from their continued legal troubles from the phone hacking scandal. Bobbi Rebell, Reuters.

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The real prize of a News Corp. split

Tuesday, June 26, 2012 - 02:29