News Corp. Reviewing Options for News America Marketing Unit

(Bloomberg) -- News Corp. said it is evaluating options for its News America Marketing business that could include a sale, which would leave the publisher of the Wall Street Journal and New York Post more purely focused on media while removing what’s been a troubled unit.

• The review of News America, which offers in-store marketing and shopper circulars, “will result in enhanced shareholder , as we seek to streamline our company, with the aim of greater transparency and profitability,” News Corp. Chief Executive Officer Robert Thomson said in a statement. Media-focused investment bank Allen & Co. is advising on the process.

Key Insights

• News America has been something of an albatross for News Corp. in recent years. The company recognized noncash impairment charges totaling $165 million related to News America in the quarter ended March 2018, and the unit was the subject of a lawsuit by consumer brands that led to a $250 million settlement in 2016.
• The marketing unit is also suffering from a version of the same ailment afflicting News Corp.’s print-media properties: declining circulation. Revenue at News America dropped 7% in the nine months ended March 31, with the company mainly citing lower home-delivered revenue amid a drop in volume.

Market Reaction

• News Corp. shares rose as much as 2.7% to $12.57 in New York trading Tuesday. The stock is up more than 10% so far this year, though down 22% in the past 12 months.

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• See more details.
• Read the statement.

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