The rumours broke a couple of weeks ago that the Murdoch family were considering bringing their two companies back together. Split in 2013 after the News of the World scandal, as Rupert tried to protect his faster growing entertainment assets from the sins of his slower growing news division, the Murdoch’s are now considering reuniting them.
The two companies are News Corp and Fox Corp. News Corp owns print news and publishing assets around the world including the Wall Street Journal in the US, The Sun and The Times in the UK, and The Australian, The Daily Telegraph, The Herald Sun, RealEstate.com.au and Foxtel in Australia. Fox Corp is Rupert’s remaining entertainment assets (as most of them were sold to Disney in 2019 for $70 billion). They include Fox News, Fox Broadcasting and Fox Sports.
This presentation from Irenic Capital Management was given to the Special Committee of News Corp’s board that has been put together to consider the question of remerging. It has been reported that Rupert was reluctant to split his empire in 2013 and is pushing for this remerger to pave the way for his son Lachlan to take over. But Irenic believe a remerger would be a mistake.
Instead, they believe News Corp should take the opposite approach. They believe News Corp should spin out many of its most valuable assets – Dow Jones (owner of the Wall Street Journal) and RealEstate.com.au – into separate companies. Right now, News Corp is ~$18 a share. Irenic believe it is worth almost $34 a share and that splitting the company up into its parts would be the best way to achieve this.
This presentation is a pretty comprehensive looks at the News Corp businesses and why Irenic think they should be split up. With the Murdoch family controlling the business, the big question is – can they convince Rupert?
This is an excerpt from our Thought Starters email. Once a week we send you 5 interesting articles that have caught our attention, to get you thinking. No spam, we guarantee.