News Corp. board approves company split
Rupert Murdoch’s News Corp. moved closer to the planned breakup of the $76 billion global media conglomerate as board members this week formally approved the split.
June 28 is the target separation date, News Corp. said Friday in a statement. The company announced directors of the boards for the company, which will be renamed 21st Century Fox, as well as the spinoff publishing group, which will assume the News Corp. name.
Existing shareholders will receive one share of the new News Corp. for every four Class A or Class B shares that they current own. The distribution of shares will be in the form of a dividend.
Board members also approved a repurchase program to buy back $500 million of shares in the new News Corp. Stockholders in the company are expected to vote next month on amendments that facilitate the split.
“We continue to believe that the separation will unlock the true value of both companies and their distinct assets, enabling investors to benefit from the separate strategic opportunities resulting from more focused management of each division,” Murdoch, the chief executive, said in a statement.
Pay-TV companies losing customers, analyst says
One of pay-TV’s top trend analysts, Bruce Leichtman, says the biggest pay-TV companies lost 80,000 TV subscribers over four quarters, a first in his research over more than a decade.
He attributed the decline to slow housing, a saturated pay-TV market, and some cord-cutting. The loss was about 0.1 percent of the 95-million subscriber TV market.
He calculated the subscriber numbers for the second, third and fourth quarters of 2012 and the first quarter of 2013, a period that captured seasonal swings in subscriber gains and losses.
Cable- and satellite-TV companies, Leichtman noted, also seem to be de-emphasizing the marketing of services to customers who may drop the TV service, seeking more profitable subscribers.
Leichtman cautioned against a “knee-jerk” reaction that the Internet was killing the pay-TV business with the 80,000 aggregate loss. “It’s not swirling down the toilet bowl,” he said, describing the industry as flat. Leichtman, who runs Leichtman Research Group Inc., estimated that 87 percent of U.S. households subscribe to a TV service and that future TV growth is likely to be dependent on new-home construction.
Though this was the first four-quarter period he recorded a subscriber loss over pay-TV subscriber cycles, Leichtman said the industry has been flat since the “digital transition,” which was completed in June 2009.
During this transition, over-the-air TV networks upgraded their transmission signals to digital technology from analog, forcing residents to purchase new TVs or obtain government-financed digital adapters.
The transition, Leichtman said, forced many pay-TV holdouts to subscribe to cable- or satellite-TV because of hassles related to the transition - a last burst of new TV subscribers for the industry.
Leichtman does not see the broad threat to the pay-TV business that others see, noting that when one talks about Internet video providers they are mostly talking about Netflix Inc.