Last updated: July 19, 2011 - 8:37am
In the eyes of Wall Street, News Corp. Chairman Rupert Murdoch's Achilles' heel has always been his unabashed love of newspapers. Now media analysts are hoping the phone-hacking scandal at the company's now-closed News of the World tabloid will finally convince the 80-year-old mogul that it is time to stop the presses that threaten the family empire.
In a global conglomerate with revenue of more than $30 billion and assets that include a major movie studio and broadcast and cable television networks, News Corp.'s newspaper holdings are one of the smallest profit centers. The division, which includes British papers the Sun and the Sunday Times as well as the Wall Street Journal and the New York Post in the U.S., will contribute about $6.2 billion, or 18% of News Corp.'s total revenue for fiscal year 2011 and $543 million, or 10%, of the company's $5 billion in operating income, according to estimates by Nomura Equity Research. But Wall Street's concerns about Murdoch's newspaper operations extend far beyond their financial results. Dubbing News Corp.'s newspapers "toxic," Nomura analyst Michael Nathanson said in a report that the company should use the News of the World debacle to "take another look at its assets to determine which are noncore."
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