Murdoch's newspapers for sale?

The man with ink in his veins might have to consider the unthinkable

Everybody knows Rupert Murdoch loves his newspapers. He launched The Sun on Sunday last weekend to replace the News of the World and couldn't contain his excitement, constantly tweeting news about advertising and circulation performance. As has often been said, Mr Murdoch has ink running through his veins.

So, at first glance, the idea that the News Corporation chairman and chief executive, who turns 81 later this month, might sell his papers, including The Sun and The Times, seems almost impossible to believe. But increasingly the talk in the City and on Wall Street is that Mr Murdoch might have to consider the unthinkable.

Chase Carey, Rupert's number two and chief operating officer at News Corp, has fuelled the speculation this week by publicly admitting that the company had considered a sale or spin-off of the titles. Mr Carey told US investors "there certainly is an awareness" that the company would be worth more if it did not own the papers.

Wednesday's resignation of Rupert's son, James, as chairman of the UK newspaper group, News International, in the wake of the phone-hacking scandal has added further grist tothe rumour mill. Some observers claimed that meant the family was loosening its ties with the UKnewspapers.

Publishing contributes only around 15 per cent of profits at News Corp, which also owns The Wall Street Journal, the New York Post and a string of papers in Australia. Cable and pay TV and movies, including interests in Fox and BSkyB, generate the vast majority of income, prompting some investors to call for the papers to be sold.

Claire Enders, the founder of Enders Analysis, cautioned that Mr Carey's comments were expected as he needs to keep shareholders onside. "He needs to be seen to be engaging in a dialogue in an open way," she said. Ms Enders believes News Corp remains committed to the papers, pointing out it has invested some $50m (£31m) in The Sun's Sunday edition. "I really don't think the idea that Rupert Murdoch launches The Sun on Sunday and by Thursday there's a long-term plan to get rid of the newspapers makes any cognitive sense," she said.

What's more, Mr Murdoch is not under financial pressure from shareholders to sell. News Corp shares have recovered all their losses since the hacking scandal exploded in July.

James Murdoch's exit from NI hardly means his family has cut all links, either. Rupert Murdoch still sits on the board of NI. His eldest daughter, Prudence, joined the editorial board of The Times a year ago.

But Lorna Tilbian, a media analyst at the broker Numis Securities, said it is important to look at the bigger picture, and the TV business is key. Rupert Murdoch and Chase Carey still desperately want to buy the 61 per cent of the pay-TV giant BSkyB that it does not already own. Sky, which Mr Murdoch helped to launch in 1989, is hugely profitable, and is forecast to reap even bigger profits in the next few years – in contrast to the newspapers.

It should not be forgotten that it was the Murdochs' £8bn bid for Sky in June 2010 that encouraged rival news organisations to step up the pressure over phone hacking. The takeover was just weeks away from getting the green light from regulators when claims were reported in July 2011 that the News of the World had hacked the murdered schoolgirl Milly Dowler's mobile. That forced News Corp to drop the bid, but it remains high on the agenda.

A year ago, News Corp proposed hiving off Sky News as a separate company from BSkyB to win over regulators' concerns about plurality in news. Now Ms Tilbian thinks selling the papers makes more sense: "Because Sky News fits in with a global TV content business, with Fox and so on, this time I'd think they try to hive off or sell the newspapers because they're the ones that are causing the grief."

Some think it would be difficult for News Corp to find a buyer for the UK papers, particularly The Sun, when so many legal clouds hang over the paper. Another Sun journalist was arrested yesterday – the 11th in the police investigation. However, if the legacy of legal problems can be ringfenced, there ought to be no shortage of interest. One option is that Mr Murdoch himself hives off the papers into a family trust or collaborates with a wealthy partner.

If the papers were sold outright, sovereign wealth funds from Abu Dhabi or Singapore might be interested. Closer to home, Richard Desmond, owner of the Daily Express and Daily Star, has been keen. Germany's Axel Springer, owner of the popular tabloid Bild, has been mooted but has always maintained it has no interest.

Ms Tilbian says newspapers remain highly valued as trophy assets. "Horses are for gamblers," she says. "Newspapers are for the more intellectual."

Just don't expect Mr Murdoch to sell in a hurry.

Can James Murdoch stay at Sky?

How much longer will James Murdoch last as chairman of BSkyB? He survived Sky's annual meeting in November as the board unanimously backed him but 45 per cent of independent shareholders either voted against or abstained because of the News International hacking scandal.

Tom Powdrill, the spokesman for the shareholder watchdog Pirc, says some Sky investors are seriously concerned about the impact of hacking if the media regulator, Ofcom, conducts a "fit and proper" test into News Corp's 39 per cent shareholding and forces it to reduce its stake. "There have certainly been discussion among institutional shareholders about a negative ruling from Ofcom," he said.

News Corp is still desperate to buy all of Sky, so it does not make sense for James, a damaged figure, to stay as chairman. Given his decision to quit as NI chairman and as a director of GlaxoSmithKline, his exit from Sky looks all but inevitable.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent