Monday, February 23, 2009

The Media Baron and His Soft Spot

The company recently took $8.4 billion in write-downs, including $3 billion on its newspaper unit, which includes The Journal’s publisher, Dow Jones & Company. Meanwhile, the News Corporation’s stock price has fallen by two-thirds in the last year, a sharper decline than at media conglomerate peers like Time Warner and Viacom.

In more vibrant economic times, investors and Wall Street analysts were more willing to look past Mr. Murdoch’s attachment to newspapers — the newspaper segment is now the company’s biggest single source of revenue, about 19 percent in the most recent quarter. But they find that a tougher chore these days, as other media struggle and newspapers suffer through their worst slump since the Depression.

“The thing I hear from investors is that they wish News Corp. was everything but newspapers,” said David C. Joyce, media analyst at Miller Tabak & Company.

“Investors are more forgiving when they are in a better mood,” he said. “The hope for a turnaround in the newspaper business is looking elusive.”


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