Don Groves is a Deadline contributor based in Sydney
Rupert Murdoch’s Australian empire will generate as much of 60% of the annual earnings of the publishing arm of News Corp. after the company splits this year, say Sydney-based analysts who are generally sanguine about the new News Corporation’s prospects. The Oz group has largely gone under the radar of international investors until now because its financial results were not disclosed. With that set to change after the split, Kim Williams, CEO of Australian division News Limited, will face increased pressure and scrutiny from the get-go.
ComSec’s Alice Bennett expects News Corporation stock to be sold off aggressively at the start, creating one of the initial challenges for Williams. Bennett believes the sale will be down to factors that include News Corp.’s exposure to the Australian and New Zealand economies; the fact that publishing reps 53% of earnings; ongoing losses at the Amplify education business and the risk of further litigation in the UK. But, she does allow, “When the dust settles post demerger, we think this vehicle could provide some interesting opportunities for Australian investors given the highly cash-generative pay TV assets and higher-growth online assets.” Fox Sports and Foxtel, of which News Corp. holds 50%, are staying in the publishing fold. The company also owns 61% of realestate.com.au. (more…)