8:33 am Dec. 3, 2012
News Corp. has announced the details of its planned split into two separate, publicly traded companies focused on publishing and entertainment, respectively.
Some aspects of the plan came as no surprise, following reports that surfaced over the weekend in Reuters, The Financial Times and The News Corp.-owned Wall Street Journal.
Robert Thomson, managing editor of The Journal, editor-in-chief of its parent company, Dow Jones, and a long trusted lieutenant of News Corp. chairman Rupert Murdoch, has been named C.E.O. of the proposed publishing entity. As expected, he will be succeeded in his previous role by Journal deputy editor Gerard Baker as of Jan. 1. And Tom Mockridge, who was apparently passed over for the job being handed to Thomson, has resigned as C.E.O. of News Corp's U.K. newspaper arm, News International.
“This is an incredibly exciting time, for me personally, and for our companies’ ambitious futures,” said Murdoch in a statement. “The challenges we face in the publishing and media industries are great, but the opportunities are greater.”
But there was some less sanguine news buried further down in the company's press release. (Click here to read in full.)
Starting Dec. 15, News Corp's iPad newspaper, The Daily, will cease publication, bringing an end to an ambitious and expensive two-year experiment that ultimately failed to be a considerable driver of readers and revenue in the nascent tablet-publishing market.
“From its launch, The Daily was a bold experiment in digital publishing and an amazing vehicle for innovation," said Murdoch. "Unfortunately, our experience was that we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long-term. Therefore we will take the very best of what we have learned at The Daily and apply it to all our properties."
Whispers of The Daily's possible demise first surfaced last summer, when The New York Observer reported that the publication had essentially been put on probation. A round of layoffs followed soon thereafter.
According to this morning's News Corp's announcement, technology and "other assets" from The Daily will be folded into the New York Post, News Corp's money-losing but influence-wielding U.S. print tabloid.
That includes "some staff"—namely Daily editor-in-chief Jesse Angelo, who has been named publisher of the Post, his previous home at News Corp. and one where he rose up the ranks as a trusted Murdoch confidant.
"Under the editorial leadership of Editor-in-Chief Col Allan and the business and digital leadership of Jesse, I know The New York Post will continue to grow and become stronger on the web, on mobile, and not least, the paper itself," said Murdoch. "I want to thank all of the journalists, digital and business professionals for the hard work they put into The Daily.”
Paul Carlucci, who has served as Publisher of the Post since 2005, will now focus exclusively on his role as chairman of News America Marketing; Greg Clayman, The Daily's publisher, will "oversee the company's global digital strategy, new digital investments and distribution partnerships, working with CTO Paul Cheesbrough," according to the release.
The proposed News Corp. split was first announced back in June. It is seen as a strategy for relieving the company's booming television and film entities, such as Fox News and 20th Century Fox, from its less lucrative newspaper and publishing plays. It's also a way to appease investors displeased with the phone-hacking scandal that has wreaked havoc on News Corp's British newspaper operations.
The entertainment side will be called Fox Group, of which Murdoch will serve as chairman and C.E.O., while the publishing company will retain the name News Corp. "in keeping with the company's 60-year heritage of bringing news to the world," according to the company's statement.
The decision reflects Murdoch's long-held love of newspapers and his continued willingness to invest in them.
"Many of you know that a belief in the power of the written word has been in my bones for my entire life," Murdoch told employees in a staff memo obtained by Capital. "I witnessed the hunger people had for well-written, thoroughly observed stories ... stories that provide not just information, but insight. That hunger is alive and well today." (Scroll down to read the full memo.)
It appears that The Journal, which News Corp. acquired through its purchase of Dow Jones in 2007, will become the centerpiece of the standalone publishing company. Aside from The Journal, the Post, and its British papers like The Times of London, News Corp. also owns newspapers in Australia and elsewhere in the U.S.
"Thomson’s elevation ... reinforces the fact that The Wall Street Journal is the center of the new Newsco," media analyst Ken Doctor wrote over the weekend. "The Journal is the both its center of digital innovation — in video, in tablet, in ad inventiveness — and home to by far the greatest growth potential."
"The Journal's growth has exceeded even the most optimistic of expectations because of the extraordinary men and women who fill our newsrooms," said Lex Fenwick, C.E.O. of Dow Jones and publisher of The Journal, in a separate announcement issued by Dow Jones this morning, adding of Baker:
"Gerry Baker's extensive background across digital and print, as well as publications and geographies, has helped shape the Journal's coverage during his time as Deputy Editor-in-Chief. I am thrilled to work with him as he builds on Robert Thomson's fantastic work to steer us to even greater heights."
Baker, who's outspoken conservative views make him a controversial choice for some in the newsroom, had this to offer: "I am honored and excited beyond words to be given the opportunity to lead the finest team in journalism."
You can read Murdoch's full memo to staff below:
I have great news to report regarding the proposed separation of our company into two global leaders.
In keeping with our rich, 60-year heritage of bringing news to the world, the publishing entity will retain the name News Corporation. The media and entertainment company, which has excelled at engaging, entertaining and enlightening people around the globe for almost three decades, will be named Fox Group.
In addition to announcing the names of the two entities, we are taking an important step in advancing this separation process today by announcing several additional details. We have appointed Robert Thomson as Chief Executive Officer of the proposed publishing company. Robert, who has served as Editor-in-Chief of Dow Jones and Managing Editor of The Wall Street Journal, is a true visionary, as proven by his outstanding leadership at the Journal, which has become the dominant newspaper in the U.S. and has greatly expanded its global reach through WSJ.com, which now publishes in eight languages.
In addition, today we are announcing key members of the leadership team for the new News Corporation, including Bedi Ajay Singh, who will assume the role of Chief Financial Officer, and Paul Cheesbrough who will serve as Chief Technology Officer (he holds the same title at News Corp. currently). Keisha Smith, formerly of Morgan Stanley, will be the new company’s director of Human Resources. I am excited about the appointments of Bedi, Paul and Keisha, as they bring incredible talents to the team and share with Robert and me the desire and will to bridge the triumphs of our past with the opportunities of tomorrow.
Many of you know that a belief in the power of the written word has been in my bones for my entire life. It began as I listened to my father’s stories from his days as a war correspondent and, later, a successful publisher. It deepened when, starting in grammar school, I rolled up my sleeves and worked alongside fellow students to publish school journals. I witnessed the hunger people had for well-written, thoroughly observed stories ... stories that provide not just information, but insight. That hunger is alive and well today; my personal mission is to serve and satisfy the human need for insight as well as I possibly can.
Storytelling of a different kind has also empowered us to fuel the human spirit and enlighten the lives of millions of people through our film, TV and sports properties. We began more than 25 years ago with the acquisition of a modest but promising film studio and bucked conventional wisdom at every opportunity on our way to creating the world’s most successful media and entertainment portfolio. Fox Group will continue this mission and in doing so will engage audiences in a way that not only drives financial success, but also inspires the imaginations of millions of people around the world.
During our history, you – the people of this company – have told these stories with astonishing skill and ever-increasing success. The key to that success – one that has been reinforced time and time again as this company has grown – is in finding the brightest, most talented, most innovative people and setting them out on a journey of discovery.
Because of your creativity, commitment to innovation, and continuous dedication to achieving the future, we have barreled through the boundaries of what is possible.
That’s the secret to our success: Your talent. Your inspiration. Your passion.
While we will face challenges at both companies going forward, together, we have already achieved the seemingly impossible. Now imagine what we can accomplish with the focus, flexibility and collaboration that two independent entities will make possible.
Change always breeds uncertainty, but let me be very clear about one thing that is certain: We aren’t finished achieving what others deem impossible. Not even close.
It is an honor and a pleasure to work alongside you. The work you do every day never fails to amaze and inspire me.
And the best news of all ... We’re just getting started.
My very best regards,
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