News Corp. Investor Tells Murdoch to Ditch Newspapers

NYP-Times

One of the world’s largest media businesses is getting some bold advice from one of its biggest shareholders: Kevin Holt, a senior fund manager at an investment management company called Invesco, is publicly urging News Corp. Chairman and CEO Rupert Murdoch to ditch his various newspaper holdings around the world.

While Murdoch is unlikely to heed the advice, Holt’s position lays bare the woes facing the newspaper industry around the world. Holt’s words carry some weight because Invesco is the third-largest shareholder in News Corp., according to The Sunday Telegraph, which first published Holt’s public advice to the News Corp. boss.

However, Invesco’s holdings are small compared to Murdoch himself: Invesco owns roughly 14 million of News Corp.’s B shares, or 1.75% of a total 798.5 million B shares -- compared to 317.3 million held by Murdoch, or 39.7% of the total.

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Still, Holt’s decision to take his complaint public will doubtless stir controversy in the media business. Holt was quoted in the Telegraph as saying: “It's a digital world now, and the competitive advantage that newspapers had has been competed away.” Asked whether Invesco’s stance was prompted by the recent phone-hacking scandal, Holt said that was a marginal concern, as Invesco always viewed News Corp.’s newspapers as a liability: “We don't own the stock because of the UK newspaper print business. We own it despite the UK newspapers.”

Murdoch’s career began when he inherited News Limited -- a regional Australian newspaper publisher -- from his father in 1953, and accelerated with the acquisition of additional newspapers in Australia, New Zealand and the U.K. in the 1950s and 1960s. Although News Corp. has developed substantial business interests in areas including television and entertainment, newspapers have remained central to Murdoch’s long-term strategy -- in part as sources of content for other media platforms.

For example, one of News Corp.’s more recent acquisitions brought Murdoch control of Dow Jones, publisher of The Wall Street Journal, in 2007, with an eye to integrating some WSJ and other Dow Jones content with his newly launched Fox Business News.

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