Phone-hacking scandal could force Murdoch to let go of newspapers
Published: July 19, 2011 / Author: Joe Flint
In the eyes of Wall Street, News Corp. Chairman Rupert Murdoch’s Achilles’ heel has always been his unabashed love of newspapers.
Now with Murdoch and son James scheduled to testify before Britain’s Parliament on
Tuesday, media analysts are hoping the phone-hacking scandal at the company’s
of the World tabloid will finally convince the 80-year-old mogul that it is
time to stop the presses that threaten the family empire.
“Investors hate everything to do with the newspaper business,” said Rich
Greenfield, an analyst with BTIG. “It is perceived to be the worst asset within
In a global conglomerate with
revenue of more than $30 billion and assets that include a major movie studio
and broadcast and cable television
networks, News Corp.’s newspaper holdings are one of the smallest profit
The division, which includes British papers the Sun and the
Sunday Times as well as the Wall Street Journal and the New York Post in the
U.S., will contribute about $6.2 billion, or 18% of News Corp.’s total revenue
for fiscal year 2011 and $543 million, or 10%, of the company’s $5 billion in
operating income, according to estimates by Nomura Equity Research.
Wall Street’s concerns about Murdoch’s newspaper operations extend far beyond
their financial results.
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Story also appeared in The Chicago Tribune and Red Eye.