According to a Reuters news report,
) Fox Sports Media Group acquired SportsTime Ohio, a
Cleveland based regional sports network.
The acquisition is expected to enhance its portfolio of
regional sports channels and strengthen the company's Fox Sports
Media Group's position in the lucrative sports entertainment
business, where it competes with
Walt Disney Company
) sports coverage network, ESPN.
Moreover, with the buyout, News Corp. gained exclusive
long-term local broadcasting rights for Cleveland Indians
baseball games. The move will also facilitate the company to
generate incremental revenues through advertising and
Earlier, in a similar move, the company entered into a deal to
acquire 49% stake in the Yankees Entertainment and Sports Network
(YES). The agreement also provides an option to the diversified
media conglomerate to increase its stake up to 80% after three
News Corporation strives to add diverse revenue streams to
hedge against the persisting economic volatility. The company is
also focusing on the emerging markets to consolidate its media
business, since these regions have millions of viewers.
The company remains on track to split into two separate
publicly traded publishing and media and entertainment entities.
There has been immense pressure from shareholders to divest the
publishing arm, which has been grappling with lower operating
profit compared with the entertainment unit.
The Publishing Company (to be known as News Corporation) will
comprise publishing businesses, education unit and the integrated
marketing services business. On the other hand, Entertainment
Company (to be named as Fox group) will encompass cable and
television assets, filmed entertainment, and direct satellite
The company announced Rupert Murdoch as the Chairman of the
publishing entity as well as the Chairman and CEO of the
entertainment company. Alongside, the company named Chase Carey
as the president and COO of the new entertainment company, while
James Murdoch will continue as the deputy COO.
The split is expected to augur well for News Corporation,
which has been in troubled waters since the revelation of the
phone hacking scandal that eventually led to the closure of the
publication of 'The News of the World'. Moreover, the company was
held back from acquiring the remaining 61% stake in the British
Sky Broadcasting Group.
Currently, we have a long-term 'Neutral' recommendation on the
stock. Moreover, News Corporation, which competes with
Time Warner Inc.
), holds a Zacks #3 Rank that translates into a short-term 'Hold'
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