As News Corp prepares to separate its publishing business from its entertainment assets, Murdoch said that while some brands face individual challenges, as a whole the publishing portfolio is "undervalued and underdeveloped."
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The new publishing company, which will retain the News Corp name, officially kicks off on June 28 with properties such as: The Wall Street Journal, Dow Jones Newswires, The Times of London, Australian pay-TV services, book publisher HarperCollins and fledgling education unit, Amplify.
The spin-off comes as newspapers face plunging advertising revenue and readers who increasingly prefer to get news for free on their smartphones and tablets. Shares of newspaper companies - once considered blue-chip investments - have tumbled over the past decade as investors fear a permanent drain in ad sales.
Against this backdrop, the publishing company's new chief executive, Robert Thomson, said there will be "relentless" cost cuts in store for the business. He gave no specifics.
News Corp executives took pains to note almost half of the publishing company's revenue comes from sources other than advertising. One revenue source is Dow Jones, which sells news and information to financial institutions and competes with Thomson Reuters Corp and Bloomberg LP.
This is the death knell for the NY Post.
The newly-created Murdoch newspaper/publishing/education division cannot afford a newspaper that loses $110 million a year.
Unless another buyer takes it off their hands, the NY Post is going to go through a vicious cycle of buyouts, layoffs and cost-cutting until they finally close it.
Joel Klein is not going to be given free reign to lose millions at Amplify either.
Without FOX News and the entertainment division to support them, the newspapers and Amplify will have to swim on their own or follow The Daily to the graveyard.
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