News Corp unveils new logo of publishing unit
Rupert Murdoch, right, and wife Wendi Deng Murdoch arrive at the Oscars at the Dolby Theatre on Sunday Feb. 24, 2013, in Los Angeles. (Photo by John Shearer/Invision/AP)
Published Tuesday, May 28, 2013 9:51PM EDT
LOS ANGELES -- News Corp. on Tuesday unveiled a friendlier-looking logo for the publishing division as it prepares to split the struggling newspaper and book unit from its TV and movie business by the end of June.
The unveiling, at a one-day meeting with investors in New York, followed the company's recent disclosure to securities regulators that the publishing unit would book an impairment charge of up to $1.4 billion this quarter before being spun off as a separate, publicly traded company.
The logo, in cursive lettering, is based on the handwriting of founder Rupert Murdoch and his father. It replaces the striped globe of the current News Corp. brand.
Since the split was announced last June, News Corp.'s stock has climbed 65 per cent, beating out peers like The Walt Disney Co. The Standard & Poor's 500 Index has risen 26 per cent over the same period. Many investors believe the struggling newspaper company will no longer be a drag on growth of the entertainment businesses.
On Tuesday, the chief executive of the publishing group, which will continue to be called News Corp., touted the unit's future as a separate entity while acknowledging its difficulties as print advertising continues to decline across the industry.
"We're certainly not naive about the challenges facing some of our newspapers," said CEO Robert Thomson, former managing editor of The Wall Street Journal, which will be part of new News Corp. after the split. "We are in the midst of a transformation of those businesses. Costs are being confronted."
Murdoch said that part of the plan for the publishing side is to raise subscription prices to readers. He argued that The Wall Street Journal charges far less than The New York Times, for example. The Wall Street Journal also intends to expand its audience by publishing more foreign-language translated editions.
Murdoch did not hold out hope for an advertising turnaround for print newspapers, whose ad revenue has been siphoned off by Web-based companies like Google Inc. and Facebook Inc.
"We're being very realistic and not expecting any big expansion," he said. "There's no doubt the Internet has taken a lot of business."
The investor day was meant to reassure investors about the value of the new News Corp. It will contain the company's newspapers in the U.S., Britain and Australia; Dow Jones & Co., which owns The Wall Street Journal; its for-profit education business, Amplify; book publisher HarperCollins; and TV assets in Australia.
A separate company, to be called 21st Century Fox, will house its 20th Century Fox movie studio, TV channels such as Fox News and Fox Sports 1, and its investment in overseas TV providers like Sky Deutschland and Sky Italia. The entertainment company's logo, featuring Hollywood-style spotlights, was unveiled earlier this month.
The presentation followed a series of confidence-building announcements focused on the publishing spin-off.
News Corp. said in March the publishing unit would have $2.6 billion in cash and no debt, and on Friday it said the unit was authorized to buy back $500 million in shares, which is seen as buttressing its share price if there is a sell-off once existing shareholders are distributed new shares in the publishing company.
Analyst Todd Juenger of Bernstein Research said the stock market was putting little to no value on the publishing side in a research note Tuesday.
He valued 21st Century Fox at $34 per share-- slightly higher than the $33.24 News Corp. shares closed at Tuesday -- and $6 per share for the publishing unit.
He suggested buying shares now to get publishing unit shares "for free," or waiting to "scoop up" publishing shares in case there is a sell-off on June 28, the date of the split. "If new News gets left for dead ... then scoop up new News at a bargain price," he recommended.
Dow Jones CEO Lex Fenwick also talked about new products that take aim at Bloomberg's financial data and news services in Tuesday's presentation. A product called DJX will include a wire service that gives institutional subscribers a 2-minute head start on news broken by The Wall Street Journal and Dow Jones reporters.
Fenwick said the new News Corp. has a "huge opportunity" if it can expand on its less than 1 per cent market share of what he said was $40 billion in spending every year by financial institutions on such niche data and news platforms.