Will a News Corp. split have a downside for its entertainment properties? As the media giant mulls splitting off its print business, among the many implications are that its entertainment empire will be further detached from the papers that can bolster the blockbusters churned out by the same entertainment side.
Lore has it that News Corp. papers are used to promote Murdoch’s sprawling media assets and even the parent company itself. In 2011, a UC Berkeley study purported to show a "statistically significant, if small, bias" in how News Corp. properties reviewed 20th Century Fox movies. In the U.S. alone, News Corp.'s high-end (and increasingly consumer-aimed) Wall Street Journal and downmarket New York Post have ample opportunity to promote News Corp.’s vast sports, movies and TV interests. But even with Murdoch still very much in the picture, operators at separately run companies will have less opportunity for the interaction that can fuel such cross-pollination.
The move now afoot to separate the phone-hacking, scandal-tainted newspapers comes as Murdoch’s global media juggernaut faces pressure to appease critics not only of the scandal but also of the papers, which remain near and dear to the 81-year-old Murdoch’s heart but face slower growth prospects and lower profit margins than its entertainment counterpart.
For now, attention has focused on the increased financial pressure its newspapers will likely face as a stand-alone operation without the benefit of the funds its entertainment business can pour into them.
Already, layoff jitters are spreading throughout the print business, which includes the vaunted Wall Street Journal plus papers in the U.K. and Australia, where properties are already preparing for cuts.
“There’s a lot of worry about that because all the publishing assets have been protected” by the rest of the company, one Dow Jones staffer fretted.
Journal parent Dow Jones & Co., under new CEO Lex Fenwick, has already started trimming. Just days ago it announced it would fold SmartMoney, the 20-year-old personal finance magazine, and expand the brand digitally, cutting 25 people in the process.