Vukosi Fungeni

Investors in the Content Business Dwindle Again?

In Financial Management on June 28, 2012 at 20:39

24/7 Wall St.

The argument goes that if News Corp. (NASDAQ: NWS) spins off its print businesses, they will be unable to keep their editorial costs at current levels. Some of the properties in this new operation may be profitable enough to sustain those that are not. Even so, Wall St. will still want to see cuts to improve margins. The new spin-off corporation might fall under the same expense pressure experienced by public corporations like CBS (NYSE: CBS); Gannett (NYSE: GCI); New York Times (NYSE: NYT); Time Warner (NYSE: TWC), which owns TIME Inc.; and Walt Disney (NYSE: DIS), which owns ABC.

Less than a half a dozen large companies continue to invest in their news businesses. Reuters and Bloomberg have added to their editorial staffs and continue to do so. But most experts believe that is not because their managements essentially believe in strong journalism…

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