This News is heard, seen, and read all over the globe. The world's #2 media conglomerate (behind Walt Disney), News Corporation (or News Corp.) owns film, TV, and publishing businesses. It makes and distributes movies through Fox Filmed Entertainment, while its FOX Broadcasting has more than 200 affiliate stations in the US. It also owns and operates about 25 TV stations, as well as a portfolio of cable networks. Publishing assets include newspaper publishers Dow Jones (The Wall Street Journal) and News International (The Times, The Sun), and book publisher HarperCollins. In addition, News Corp. has stakes in British Sky Broadcasting (BSkyB) and Sky Deutschland. The company has announced plans to split in two.
The company's individual media subsidiaries all rank highly in their respective sectors, but like its rival conglomerates, News Corp. creates additional streams of revenue for itself by distributing its content through multiple channels. News Corp. also uses its portfolio of media outlets to support one another, primarily through cross-promotional efforts.
News Corp.'s Entertainment group, which accounts for some 75% of revenues, includes holdings such as its Twentieth Century Fox movie studio, the FOX broadcast TV network, and the Fox News cable channel. Publishing assets account for the remaining 25% of business, and include book publishing, integrated marketing services, and newspapers and information services segments.
In 2012 News Corp. decided to split into two publicly traded companies, separating the weaker Publishing group from its larger Entertainment group. CEO Rupert Murdoch is expected to maintain control of both companies. News Corp. claims it is making the split in order to enhance shareholder value, saying the move would result in two strong companies that are better managed and poised for growth. While News Corp.'s board unanimously approved the deal, it remains subject to shareholder and numerous regulatory approvals. It could take up to a year to work out all the various details.
Meanwhile, the company has made significant investments to expand its digital and online media holdings. At the Wall Street Journal, the newspaper is enhanced by the fact that its WSJ.com (operated through Wall Street Journal Digital Network) is one of the few news sites to succeed as a subscription business. Another major digital asset is IGN Entertainment, an owner of a network of video game and entertainment-related websites targeting the male demographic (aged 18-34). Other new media holdings include its more than 30% stake in video streaming site Hulu, a partnership with NBCUniversal and Walt Disney.
However, the company famously admitted defeat in the social networking realm. In 2011 News Corp. sold Myspace to digital advertising network provider Specific Media for a paltry $35 million. (It has acquired the company in 2005 for $580 million.) As a result of the sale it obtained a minority equity stake in Specific Media.
While revenues remained relatively flat in 2012 compared to the prior year, News Corp.'s profits took a hit. The company reported net income of $1.2 billion in 2012, down from 2.7 billion in 2011. The firm was forced to take a $2.8 billion impairment charge, primarily tied to its troubled publishing business, for the fourth quarter of the year. Strong growth at its cable networks helped offset weaker performances at other divisions.
The cable networks, particularly the popular Fox News channel, have performed well despite the downturn in advertising, thanks to increasing carriage fees paid by cable system operators such as Comcast and Time Warner Cable. Its FOX broadcast network finished second overall to CBS in the ratings for the 2011-12 season, but was the most watched network among the all-important 18-49 age demographic.
News Corp.'s Publishing division has been hurt by a newspaper industry in decline. Compounding the negative effects of the market in turmoil, the company was plagued by a reporting scandal that lead to the 2011 closure of News International's News of the World tabloid after 168 years of publication. Certain employees of the newspaper were accused of engaging in phone hacking and police bribery in order to improperly influence the publication of certain news stories.
In the wake of the controversy, News Corp. withdrew its bid to acquire the remaining 61% of BSkyB. (It still holds a 39% share and plans to remain a long-term investor in the British pay-TV provider.) Also a result of the scandal, several senior executives resigned. Murdoch has publicly apologized while stating that he was unaware of any illegal activity. The company maintains that it is assisting police, who are conducting various criminal probes.
Media mogul Rupert Murdoch and his family control about 40% of the company.