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News Corp: past, present and future | MyWealth Commonwealth Bank
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News Corp: past, present and future

04 JUL 2013 02:19 PM   |  Filed Under: Investing

News Corp officially completed its demerger on June 28, a complicated unravelling of a global media giant that resulted in two new companies listing on the Australian Securities Exchange, New News Corp and 21st Century Fox.

The fact that New News Corp and 21st Century Fox have current market capitalisations, the combined value of all issued shares, of $9.2bn and $75.3bn respectively, illustrates just how big this company is, or was.

The separate entities began preliminary trading on June 19 and, having formally completed their demerger, entered normal trading this week on both the US and Australian markets.

Stock codes and logos

New News Corp is currently listed on the ASX under the stock code ‘NNC’ but this is only temporary and the business will assume the code ‘NWS’, which belonged to the original News Corp, from early September onwards.

Its logo will be the words ‘News Corp’ in scribbled handwriting, apparently based on that of the company’s founder Rupert Murdoch.

Meanwhile, 21st Century Fox is listed under the stock code ‘FOX’ and its logo is a new take on the recognisable Fox searchlights.

Who owns what?

FOX has retained the bulk of the original News Corp’s broadcasting assets, such as FOX in the US, FX, Fox News Channel, Fox Sports Network, National Geographic Channels and STAR.

It also owns film studio Twentieth Century Fox Film, television production studios Twentieth Century Fox Television and Shine Group, European pay-tv businesses Sky Deutschland and Sky Italia and stakes in BSKYB in the UK and India’s Tata Sky.

Although New News Corp (NNC) predominantly holds publishing assets, it also has a distinct Australian focus, with some important broadcasting assets in its portfolio, including Foxtel, which is a 50-50 joint venture with Telstra, and Fox Sports Australia.

It also owns the Melbourne-based online real estate advertising company (REA).

In the publishing space NNC’s assets include The Australian, The Daily and Sunday Telegraph, Herald Sun, The Courier Mail, The New York Post, The Wall Street Journal, Dow Jones, The Sun, The Times and The Sunday Times in the UK, HarperCollins and education business Amplify.

What are their shares worth?

If, prior to the split, you were an investor in News Corp (NWS), then you would have received one FOX share for each NWS share you owned and one NNC share for every four NWS shares you owned.

When the demerger took place, the initial reaction of many media analysts was to highlight the fact that the assets now owned by FOX had delivered the lion’s share of the old News Corp’s recent earnings.

News Corp produced an overall profit of US$2.85bn for the three months to the end of March but the biggest chunk of that revenue came from the film and cable TV businesses now owned by FOX.

At the same time, News Corp admitted that its publishing businesses needed attention, including cost cutting exercises and the introduction of online paywalls to boost earnings.

Shortly before the split, News Corp said it would write-down the value of its Australian and US publishing assets by up to $1.4bn and said it was expecting a fall in future cash flows.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.