The newsonomics of the News Corp. split

„The cloning, or splitting, of the $34 billion company certainly has its logic. Hive off those pesky newspaper assets and the company’s book arm HarperCollins into a separate company. Then let the News Corp. entertainment conglomerate — satellite, cable, broadcast, movies, and more — focus on global opportunities as both the Internet and old-fashioned pipes offer seemingly unlimited upside for the distribution of entertainment content. (Fox News, best understood for its entertainment value, would go appropriately with the entertainment company, not the publishing one. That raises the question of whether those two operations, to be owned by separate companies, would continue to uneasily share prime Times Square office space. And who gets the News Corp. name? The company with the news or the company without it?)

The split made sense even before Hackgate. Viacom, Belo, and Scripps all split off growing assets over the last several years to investors’ cheers. This sequestering of no-growth — what the newspaper business, charitably, has become — businesses has its logic. Media ain’t what it used to be. And now it’s businesses like Fox Sports, Searchlight Films, and Sky Italia more than old newsprint-based life forms.

News Corp.’s high-end Wall Street Journal and lowlier Sun may still be turning some small profits. But other News Corp. properties — from The Times of London and Sunday Times to the New York Post to The Australian — are in bad shape. Just last week, News Corp. announced a major restructuring of its Aussie operations, while the Times properties and Post have hemorrhaged money for a long time. The newspapers have become a drag for News Corp., literally and figuratively.

Of course, Hackgate has upped the pressure to do something. Investors who had disdained the earnings impact of the newspapers on the company’s bottom line, watched in amazement as the whole lowly news trade allowed insolent MPs to upbraid and condemn it publicly. They’ve seen a News Corp. leadership distracted by the mess.

More importantly — and to the point here — is Murdoch’s relentless goal to dominate global entertainment and sports distribution.”