With the announcement that News Corporation will be split in two, employees at the company’s many print papers are facing a new reality: they are now in the newspaper business.
For years, the success of News Corp’s lucrative cable and entertainment assets formed a buffer between its print properties and the downturn in the newspaper industry. Now, many journalists at those newspapers worry about what will happen as they become part of a much smaller company, grouped with HarperCollins and News Corp’s education assets.
Even before the split was announced last week, News Corp was acting to streamline the newspapers and make them more profitable.
A reporter at The Australian, who asked for anonymity, said, “People fear the loss of the security that has come from being underpinned by a vast and profitable entertainment empire.”
At The Wall Street Journal, in which News Corporation has invested extensively in the last five years, a reporter said, “Everybody knows that the reason the paper is having investment put into it is Rupert Murdoch singularly.” The reporter, who spoke on condition of anonymity, said that while that dependence on Murdoch might raise some fears, the effects on the paper on a daily basis seemed too distant to worry about.
Some industry analysts predict the split will have little impact on the daily operations of the newspapers. They say they expect the new company to have no debt, and because of that it should be able to continue to finance investments in its papers.“This is purely a move to appease Wall Street and better display the value of the parts,” said Richard Greenfield, an analyst with BTIG Research.