News Corp braces for major price hike for tabloids

Publishing costs will come under scrutiny from shareholders if News Corp succeeds in plans to sell its US real estate asset Move.

Murdoch, executive chairman, last week halted plans for a possible merger of his two major media companies, Fox Corp. and News Corp. and acknowledged that the proposed merger was not in the best interests of shareholders.

But the pullback of the plans, which has been fiercely opposed by some major shareholders, coincides with advanced talks between News Corp and rival CoStar to sell its stake in real estate exchange Move, which owns

Airlie Funds Management’s Will Granger, which owns 2 percent of News Corp’s voting stock, publicly opposed a merger between News and Fox. He said News Corp is still very valuable, particularly through Dow Jones, the publisher of The Wall Street Journal.

“The Dow Jones segment has a number of qualities that we like in companies; strong brand strength, pricing power, economies of scale, recurring revenue from digital subscriptions, and a low-capital model that generates strong cash flows,” he said. “We would argue that these qualities warrant a premium rating. Dow Jones also owns a burgeoning risk and compliance business, which we believe is a quality asset that is largely overlooked by the market.”

People familiar with talks, who requested anonymity to speak freely, said the deal was worth more than $3 billion ($4.3 billion) and was enough to put the prospect of a Fox connection together and News Corp.

“Each potential transaction would support News Corp’s strategy to optimize the value of its digital real estate services segment while strengthening’s competitive position in the marketplace,” the company said in a statement.

The sale, if it goes through, isn’t expected to have a direct impact on News Corp’s local real estate business, REA Group, but it does raise the question of whether News Corp has similar plans to sell its 61-year stake, 6 percent reduction on site.

Granger also told this imprint after last week’s announcement that a possible sale of Move made more sense. “It would help simplify the business and realize value for News Corp’s shareholders, while also finding a more natural home for the Move asset in CoStar, where the value of this asset may be better maximized,” he said . News Corp braces for major price hike for tabloids

Brian Lowry

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