First, News Corp reported 26% growth in its cable networks division. This offset weakness in its other businesses, particularly publishing, which was off nearly 49% year-over-year.
News Corp plans to spin off its publishing segment, which should help unlock value in its core television and film areas. Don't be surprised if the company eventually disposes of publishing altogether (or completely retools it). That's a move I hope Time Warner considers as well.
I remain bullish NWSA and TWX because of their relative outperformance on the cable side, but also because they currently air and recently inked long-term major professional sports contracts. For example, earlier this month News Corp's Fox and Time Warner's Turner locked up Major League Baseball for the next 8-9 years.
That's something Viacom does not have: Appointment viewing, particularly sports. And this becomes more of a liability every day.Consider the moves Comcast has made. It controls and owns a 51% stake in NBCUniversal (General Electric (GE) owns 49%). It raised the stakes when it introduced NBC Sports Network on New Year's Day 2012. Now, NBCUniversal secures multi-year U.S. rights to English Premier League (EPL) soccer. NBCUniversal will use NBC, NBC Sports Network, NBCSports.com as well as the Spanish-language Telemundo to air the games. (I first saw this story via Ed Shermna's excellent Sports Media Report). This is a major coup for CMCSA. The company snags a sport with a growing U.S. following and dings News Corp's Fox and Disney's (DIS) ESPN in the process. EPL is valuable across the globe. Earlier this year, rumors indicated that Apple (AAPL) and Google (GOOG) led the bidding for EPL rights in the United Kingdom. From a long-term standpoint, big media that embraces multi-platform delivery and controls key sports -- RCI, BCE, TWX, DIS, NWSA, CMCSA -- remain strong buys. In the near term, I expect NWSA to show strength as the spinoff nears. The company reports earnings on 11/6. CMCSA hit a 52-week high, intraday, Friday. I'll wait for a pullback and start a position.
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