With a key British regulatory judgment concerning News Corp’s satellite broadcaster BSkyB cleared last week, Rupert Murdoch can focus on cleaving his newspaper empire. Critically for investors, that means it’s time to pick a leader. Wall Street Journal boss Robert Thomson appears in pole position, though his appointment would spark an editorial chain reaction of its own.
Whoever runs Spinco (the least-disparaging name used by its future employees) will have one of the hardest jobs in media. The Times of London hasn’t covered its costs for decades. The New York Post is a perennial cash sinkhole. Inside a vast conglomerate, the profitability, or lack thereof, of some papers was relatively inconsequential. To attract investors to a standalone print business, the red ink can’t flow so freely. In its last fiscal year, the publishing arm saw operating income drop 31 percent.
A chief executive with demonstrable news business nous might have the credibility to hack away at costs. That probably explains why the name of Murdoch confidant Thomson is making the rounds in New York and London media circles.
Thomson’s experience reshaping the financial broadsheet Murdoch overpaid to acquire four years ago, plus six years as editor of The Times, give him unmatched understanding of the assets and a gravitas with staff that no other News Corp executive exhibits. While Tom Mockridge has led News International since Rebekah Brooks left last year, he hasn’t worked at the Journal, which presents the most promising global opportunity for the separated company.
That’s especially important in the face of potentially renewed competition from the New York Times, where Mark Thompson, the former BBC director general with extensive battle scarring from tangling with Murdoch, has arrived as the new president and CEO.
As chief of a newly public company, of course, Thomson would need to relinquish editorial duties, kicking off a game of journalistic musical chairs. The guessing over who will lead the Journal is already in full swing internally, with editors Gerry Baker and Alan Murray seen as potential candidates. Wrenching changes at the Times might also lead to changes there.
For now, this may just be pub gossip for journalists. But for the spinoff of the newspaper arm to proceed as planned, it will need a chief relatively soon. Now certified “fit and proper” to run BSkyB, Murdoch needs to get cracking on getting News Corp out of the newspaper racket.