US Outlook Think of the The Sunday Times as Portugal. The Times (of London, as we say here) as Italy. The Sun as Ireland, The New York Post as Greece, and The Wall Street Journal as Spain. These are the PIIGS of Rupert Murdoch's media empire, News Corp's troublesome periphery.
Dealing with them inevitably involves a massive transfer of funds from the centre.
The old mogul may have been boxed in to agreeing to spin off his newspapers, but he sure as hell isn't giving up on the inky business he loves. News Corp investors who celebrated wildly on news of the split this week might have been celebrating prematurely.
Shareholder value would have been better served by auctioning off the newspapers to the highest bidders, but that could only have happened over Mr Murdoch's dead body. Instead, the plan is to bundle them all – the Wall Street Journal and New York Post in the US, The Times, Sunday Times and Sun in the UK and a slew of Australian titles – with HarperCollins book publishing in a new company, so that News Corp proper can concentrate on its faster-growing and more profitable television and film businesses.
But the demerger plan was announced only half-baked on Thursday. Now the real fighting starts.
For starters, it is not clear that Mr Murdoch is fully on board. Nothing from the News Corp chairman suggests he thinks this is a final plan yet, and since the restructuring will take a year to do he could cool to the idea as quickly as he says he has warmed to it. The question of who will run the publishing business was left open, which is significant.
Most important of all, the financial details matter. The business plan for the publishing division matters. Its revenues have fallen four per cent so far this year, its profits are down 30 per cent, and analysts predict modest-to-scary declines in the business in future years.
Publishing is a challenged business. The printing presses make it, still, a relatively capital-intensive business. In fact, while publishing accounts for about 14 per cent of News Corp earnings, before interest, tax and write-downs, it accounts for about 40 per cent of capital expenditure.
For all these reasons, News Corp shareholders want shot of the publishing division and are likely to dump shares in the new-born publishing company the minute they get them. The stock could plunge and keep plunging.
Meanwhile, the newspapers will no longer be a largely financially irrelevant part of a giant media conglomerate; the pressure to get a grip on their declining fortunes will be intense, and the cost-cutting could be savage. It's little wonder that journalists I've talked to from The Times and the Wall Street Journal see the demerger as nothing but bad news.
Plunging shares and savage cost cuts? Not on Mr Murdoch's watch. The 81-year-old, who started in the newspaper business at his father's knee in Australia, has 12 months to fight for a large transfer of funds from the centre.
A few analysts have already published back-of-the-envelope calculations on what the publishing arm could be worth, and it looks pretty weak. Taking the same earnings multiple as other US newspaper publishers like Gannett gives a valuation of less than $3bn (£1.9bn) – that is less than the $5bn News Corp paid for the Wall Street Journal five years ago.
But such calculations are moot until News Corp decides how much of a subsidy to hand to the business. News Corp debt is staying largely with the main company, it said, and the new publishing group will have a net cash position. How much cash, though, is likely to be the subject of a big fight.
As well as needing a fund to fight legal actions from the phone-hacking scandal and a robust balance sheet to reflect the relatively capital intensive nature of the publishing, Mr Murdoch will argue that he also needs a cushion to help weather the turmoil that newspapers are currently going through without having to slash costs so much they cannot take advantage of new digital opportunities.
In the back of his mind, too, he might also want to have the funds for one final acquisition.
Investors who cheered the split this week will surely come over all Angela Merkel at the idea of throwing yet more of their good money after bad. But it might be the price of ridding News Corp of its PIIGS.