Murdoch Leaves the Outback Again

Certainly, economics was the main reason -- perhaps the only reason -- that the Australian-born Murdoch became a naturalized U.S. citizen in 1985.

Back then, Murdoch was on the brink of making what was turned out to be an epochal deal in the history of American television: the purchase of six TV stations in New York, Los Angeles, Chicago and other major cities -- TV stations that became the cornerstone of the Fox (FOX) TV network, the force behind such cultural icons as "The Simpsons" and "American Idol."

There was only one little holdup: As a non-U.S. citizen, he couldn't take control of the stations' broadcast licenses. So Murdoch, who had been living in the U.S. for more than a decade, and who already owned the New York Post, the Chicago Sun-Times and other U.S. publications, did what was necessary to complete the deal: He became a U.S. citizen.

Murdoch's spokesman confirmed as much to the Associated Press in 1985, after a meeting Murdoch had with the Federal Communications Commission. "Mr. Murdoch said that he would become a U.S. citizen in order to complete the transaction," the spokesman said. "He also said he would comply with the law."

In the moneymaking spirit Tuesday, analysts issued reports indicating that, yes, there is money to be made off News Corp.'s immigration.

Repeating the company's point that 75% of News Corp.'s revenue and profits are U.S.-generated, Merrill Lynch analyst Jessica Reif Cohen wrote, "We view this very positively." Cohen has a buy rating on the NWS shares; her firm has done recent underwriting for the company.

Fulcrum Global Partners analyst Richard Greenfield recommended that clients go long NWSA and short NWS to take advantage of the likely narrowing spread between the two stocks. In fact, Greenfield predicted that NWSA will end up trading at a "modest premium" to NWS, an outcome that would prompt News Corp. to buy in its majority-owned Fox subsidiary.

Greenfield has a buy rating on NWSA and a neutral rating on NWS; his firm hasn't done banking for the company.

NWSA will "almost certainly" enter the S&P 500 index, wrote Greenfield. He estimated 154 million shares worth of incremental demand for the stock, not including "closet indexers."

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