News Corp: Pall Lifting
Jane is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The pall is lifting over News Corp (NASDAQ: NWS).
Its outsized head, Rupert Murdoch, has become visible again, even tweeting. In the tweet, he bet on the right horse, Rick Santorum, who came in second in Iowa, and he sent the right signal by embracing social media. Murdoch himself hadn't played in the sandbox since the ill-fated purchase of MySpace. Murdoch got where he is today because he is astute at reading the environment. Probably he senses it's time to come out and play again, since the sun is breaking through.
Another positive development is that News Corp's flagship newspaper, THE WALL STREET JOURNAL, has come up clean in an investigation in Europe about the circulation numbers there. Since those numbers were also filed with the SEC in the U.S., that legal matter could have become a major issue here as well as another hit to the brandname.
Audit Bureau of Circulation (ABC) in the UK, reports PAID CONTENT, decided not to take action against THE WALL STREET JOURNAL for how it conducted and reported on the numbers associated with the program "Future Leadership Institute." Through it, companies in Europe purchased about 15,000 copies daily at a low price for distribution to university students who, of course, could be on their way to becoming future leaders. Now the entity that looks bad is ABC.
Third, competitor New York Times Inc. (NYSE: NYT) has been getting sustained negative publicity about how it manages its finances and treats employees who risk their lives covering news around the world. In addition, there is now an open revolt among employees. What set this off was that former chief executive of THE NEW YORK TIMES Jill Robinson was receiving her $15 million pension while the pensions of foreign-citizen employees were being frozen. In response, the Newspaper Guild of New York sent a letter to head Arthur Sulzberger Jr. which contains quotes by employees who provide their names. Murdoch, who both hates and loves THE NEW YORK TIMES, must be licking his chops.
I do not own any stock in any of the companies mentioned.