Report: Murdoch's News Corp. Interested in Buying Tribune's Newspapers

Wednesday, 16 Jul 2014 12:25 PM

By Dan Weil

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While Rupert Murdoch's Twenty-First Century Fox is trying to take over Time Warner, there's talk that Murdoch's other company, News Corp., is interested in purchasing eight newspapers that are part of Tribune Publishing, writes Rick Edmonds of Poynter.

That includes the Los Angeles Times and Chicago Tribune. Reports of Murdoch's interest in the papers began in late 2012.

Tribune Co. announced a year ago that it would spin off its Tribune Publishing division, and the split may occur as soon as Aug. 4, Edmonds writes.

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"I would not typically report a publishing rumor. This one could prove dead wrong. But a confidential tip that started this inquiry was more substantive than gossip on the street," he notes.

Robert Willens, a New York-based corporate tax analyst, told Edmonds that a deal is certainly possible, but in the next one to two years rather than the next few months. News Corp. has a $3 billion cash kitty at its disposal.

The other six papers are The Baltimore Sun, the South Florida Sun-Sentinel, the Orlando Sentinel, The Hartford Courant, The Morning Call of Allentown, Penn., and the Daily Press of Newport News, Va.

If Murdoch had bid for the newspapers the deal would have faced delays due to the Federal Communications Commission's media-ownership rules. The regulations ban consolidation between television stations and newspapers in local markets, and Murdoch already owns a Fox television station in Los Angeles.

However, News Corp. is now a spinoff publishing company from its parent company, now renamed Twenty-First Century Fox.

Morningstar analyst Brian Han sees plenty of challenges for News Corp. "The company predominantly offers news and information, which contributes 60 percent of operating profit," he writes on his firm's web site.

"Newspaper publishing remains challenged as advertisers follow audiences online. The commoditization of news and the fragmentation of audiences will make it difficult for the company to achieve returns above its cost of capital, while revenue from its core business remains on a downward trend."

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