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News Corporation (NWSA)
Deutsche Bank's DbAccess 21st Annual Media and Telecom Conference
March 05, 2013 8:40 am ET
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So we're going to get started, if everyone can have a seat, with our next presentation this morning. So very pleased to have with us Chase Carey, Deputy Chairman, President and COO of News Corporation. So we're sticking with 3 titles so far, same as last time.
Kind of down to 2, but yes.
Thanks for coming.
Nice to be here.
So last year, we did a deep dive into the company structure and the cable network outlook, it was a focus. I think we'll cover the breadth of the company this year, so a little bit broader. But I did want to start same place as last year, with structure. Given the upcoming split, what are the steps yet to be completed to separate Publishing from FOX, and will it still be completed by this June?
Everything's pretty much on schedule. I mean, most of that steps I'd call better as sort of more of a process than substance, and I think probably falling into 2 camps: sort of the tax rulings we need for various places; and the regulatory process that we need to follow through vis-à-vis shareholders and the like. But everything is largely on track. We're still shooting for June, and everything seems to be falling in place.
So how do you think about the new Publishing stock? How would you sort of characterize how you think investors will look at that company and those businesses?
I think in -- I'm not going to sort of speculate to where it'll trade, but a lot of -- to some degree, I think increasingly, there's a recognition that the company has -- is more than simply the newspaper group, and that's not a negative comment about the newspaper group, but it really is a broad-based Australian multimedia company that is in television, video, digital and publishing, so it's sort of a broad-based Australian multimedia business, and then really, a global publishing business in books and newspapers that I think really represents unique strengths in terms of franchises, unique strengths in terms of scale and particularly some unique assets that have the potential to really build exciting businesses in a digital age. And I guess if you sort of think of Dow Jones, the Wall Street Journal is, in particular, being businesses that really have the potential to really generate unique proprietary information and data in an age -- in a digital age where essentially, unique information is going to be more valuable than ever. So I do think that, that business, as it gets out there, have potential to really build some interesting businesses. And for those who believe, which we do, that uniquely branded news, quality-branded news has a real long-term future, I guess it's a company that can be exciting for people and take advantage again of its scale, its brands and its franchises, as well as some of the assets that probably aren't -- don't get as much -- don't get talked about as much, particularly in the Australian multimedia area.
The -- we're $2.5 billion in cash. I think there was some press speculation around $3 billion. Are we in the ballpark in terms of what the balance sheet might look like at News Corp. coming out the gate?
I'm not to get into the specifics of the balance sheet. I think actually, this month, we'll have some filings that provide visibility people have been looking for in a number variance like that. What I would say with this, I think we feel both these businesses have really exciting futures. We think it's important they both have balance sheets that enable them to fulfill the opportunities they have to build exciting long-term businesses.
How should -- if shareholders of News Corp are going to get News Corp. and FOX shares, how should investors today think about how capital might be deployed at News Corp. once it's split off at the Publishing company?
At the Publishing company? I think it is really going to be -- I mean, I think it'll be a well-capitalized business. And I think it'll be deployed opportunistically. I don't think it's a business that would be viewed as having necessary holes in it, but I think it's a business where they think there will be -- they believe, we believe -- I guess today, it's still we -- believe there'll be opportunities to grow exciting businesses. And I think we've always believed we should build over -- build rather than buy, although in some places, they're probably in businesses in the publishing side, in books and newspapers that have a degree of -- degrees of maturity that sort of would bode for potential consolidation in places. So I think you -- when you look at those businesses, they are businesses one could argue where we create value out of consolidation. But they're a leader. I mean, they're a unique leader in those places, and I think they'll -- with those franchises, I think they believe there'll be opportunities for them to build and grow exciting businesses and I think largely probably focused on digital media. There's no question that in the Publishing side, the business is clearly going to continue to gravitate from a print format to a digital format. It doesn't mean there won't be printed products for a long time, but the growth and the energy will really come out of digital side of those franchises.