News Corp.’s prexy-chief operating officer Chase Carey said he knows all too well that investors would break out the bubbly if the conglom cut loose its newspapers but insisted they are still profitable — albeit with profits in sharp decline — and that the focus is on “driving the business forward.”
The division has been doubly socked as the U.K. hacking scandal overlaid a slump in print advertising that’s pummeled newspapers everywhere. Wall Streeters have been agitating for News Corp. to spin them off into a separate company; such a move, they say, could dramatically boost the conglom’s stock.
At a Deutsche Bank media conference in Palm Beach, Fla., Carey said he’s had “an array of discussions” with investors on spinning out publishing and that he respects “the reasons and arguments, and the board and management will take those seriously.”
The ongoing hacking scandal cost News Corp. $87 million last quarter. U.K. publishing revenue fell from closing News of the World over the summer. The Sun tabloid, a target of several rounds of arrests this month, just launched a Sunday section, which Carey expects to improve profitability. News Corp. owns an Australian newspaper group, which is struggling, and the Wall Street Journal and New York Post in the U.S.
Carey said News Corp. will continue as a shareholder in BSkyB after a failed attempt to buy it last year. Public opinion in Britain would make a new bid unlikely, and News Corp. is too keen on the business to unload it. “There isn’t a short-term answer. We like that business a lot. We’ll be a shareholder as we’ve been for now. Down the road will see what comes,” he said.
On the domestic front, he was upbeat on a “solid” advertising market. But he called “American Idol” a “glass half full” as ratings for the juggernaut’s latest season have disappointed although it still brings in tons of cash. “We can and should provide some fresh energy and haven’t been able to do that,” Carey said.
He expressed frustration with National Geographic Channel. “Look at Discovery. That’s your target, and we’re not even close… We haven’t cracked the nut at getting the right programming in there.”
But he gave streaming service Hulu a major nod. “A lot of people would chop off their arm to have that kind of place in a digital world,” he said.
Hulu is owned by News Corp., Disney, Comcast and Providence Equity. The partners had tried to sell it but pulled it off the block last summer. Asked about speculation that Providence wants to sell its stake, Carey said, “Providence has been a good partner, and they will do what they choose to do.”