Buy News Corp. for Its Brands

The opportunities in old media have been on my mind recently. Last Saturday on Fox News' "Cavuto on Business," I picked The New York Times (NYT - commentary - Cramer's Take) as a buy. Why am I excited about it?

I'm making a contrarian bet that the old-media brand names are actually more valuable because of the Internet. Companies such as The New York Times and the others in the May edition of my newsletter, TheCodyReport.net, have produced superior content and are being enabled by the Internet to reach a greater addressable audience, through more outlets, with lower costs. The Internet allows producers of content to monetize their assets in greater ways than ever before and with higher gross margins.

And it is the reason News Corp. (NWS - commentary - Cramer's Take) is such a screaming buy.

The worst nightmare of my Aunt Mokiet, conglomeration of the media, is happening and it's happening right now. We are at a very liquid (maybe too liquid?) stage of the business cycle, with M&A in the Internet space (DoubleClick, aQuantitative (AQNT - commentary - Cramer's Take)) picking up recently. Synergy became a dirty word with the AOL-Time Warner (TWX - commentary - Cramer's Take) debacle, but it has come full circle and is being embraced by consumer and mogul alike.

The synergies of owning multiple platforms in the media world are obvious, but no one has been brash enough to fully leverage all their platforms. Rupert Murdoch is the man for the job.

The Bancroft family (the controlling shareholders of Dow Jones (DJ - commentary - Cramer's Take)) has been skeptical of Murdoch for the very brashness that has been such a valuable tool for him. From turning the New York Post into a right-wing tabloid to his centerfolds in London's papers, Murdoch has been unafraid to make News Corp. a player in any realm.

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The company's reach encompasses publishing (Harper-Collins) and TV (Fox News), but News Corp. also has interests in gaming, software, outdoor ads, satellite and broadcast TV, movies, sports teams, magazines, newspapers, radio and even a handful of restaurants. The Bancrofts might get what they want from Murdoch (editorial control of The Wall Street Journal) if it means that News Corp.'s voracious appetite for media properties is satiated for some time.

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At the time of publication, the firm in which Willard is a partner was net long The New York Times, Google and News Corp., although positions can change at any time and without notice.

Cody Willard is the manager of CL Willard Capital Management, LLC. He is a regular guest on Fox News, CNBC and other networks, and he writes a monthly column for the Financial Times. He is also an adjunct professor at Seton Hall University and the author of TheCodyReport.net, a monthly stock market newsletter. Willard appreciates your feedback -- click here to send him an email.