Joyce said Rupert Murdoch’s decision to maintain his position as chairman in both the publishing and entertainment divisions, but to remain CEO of only the latter company, caught him off guard.
“The question as to the management of the publishing side is yet to be determined, but it’s known that he’s always been fond of the newspaper and assets, and for him not to have a direct role is a little bit of a surprise,” he said.
The split would separate the high margin cable and entertainment unit from the low margin publishing business, which may struggle depending on the decisions of management, he said.
“The financial health of the publishing side will depend on how they allocate capital [and] if they’re not putting any debt on it,” Joyce said. “They’ve already gone through some large capital expenditure programs in the last few years to upgrade the printing presses … so I think it could be a free cash flowing asset.”
—By Reid A. Spagna, Special to CNBC.com
Additional News: News Corp. Split The Right Thing to Do: Murdoch
Additional Views: Breakup Talk Is Good for News Corp. Stock: Analyst
CNBC Data Pages:
No disclosure information was available for David Joyce.