Planned News Corp spin-off lost $2B in fiscal 2012
Topics: From the Wires, News
LOS ANGELES (AP) — Rupert Murdoch’s News Corp. said Friday that the news and publishing unit it plans to spin off next year posted a $2 billion net loss in the fiscal year through June, mainly due to one-time charges and restructuring costs in its newspaper division.
The details of the split were revealed Friday in a filing to the Securities and Exchange Commission. It confirmed investors’ suspicions that the spun-off company — to be known as News Corp. — will be smaller and less profitable than the TV and movie business that will form Fox Group Inc.
The “new” News Corp. posted $8.7 billion in revenue last fiscal year, about a quarter of the company’s total. Charges amounted to $2.8 billion, mainly due to declines in the value of newspapers and a drop in advertising at its in-store flyer business. The charges included restructuring costs of $156 million, most of which came from shutting down The News of the World, the tabloid at the heart of a hacking scandal in Britain.
News Corp. CEO Murdoch, 81, will be executive chairman of the spun-off company and remain CEO of Fox Group. He’ll end up controlling both entities through the nearly 40 percent of Class B voting shares he controls through a family trust.
Robert Thomson, managing editor of The Wall Street Journal, will be the CEO of News Corp. with an annual salary and target bonus totaling about $4 million, not including stock awards.
The filing of the plan “is another important step forward in the evolution of our company and in the establishment of two independent global leaders,” Murdoch said in a statement.
Shareholder approval is not needed for the split, but is required for the way it happens. The company plans to issue shares in the new News Corp. to existing shareholders in proportion to their current holdings of nonvoting Class A shares and voting Class B shares. If shareholders don’t approve the split plan, the company may have to come up with a different way to enact it. A special shareholder meeting will be held sometime next year.
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