As News Corp. continues to be besieged by a cellphone hacking scandal, one portfolio manager from The Yacktman Funds, which owns over 3 percent of the besieged company's stock, thinks Rupert Murdoch will get the situation under control quickly.
"The story here is it's all about context. UK newspapers are not very important either to the earnings or to the future of the company," Jason Subotky told CNBC Tuesday. "They have such strong growth drivers behind them that this [scandal] will be put in the rearview mirror very quickly."
News Corp. shares are regaining a bit of ground after the company announced a plan to buy back as much as $5 billion worth of stock over the next year. It is not obligated to do so, but the announcement is seen as a nod by CEO Rupert Murdoch to restless shareholders.
Driving News Corp. over the long-term is its cable content, which "has been a huge growth vehicle," Subotky explained. "If you look at core cable content, it's more than half the value of the business. It's been growing at 25 percent a year. There's no other media entity growing remotely that fast."
In addition, Murdoch voluntarily put News Corp.'s bid for the 60.1 percent of BSkyB it does not already own up before the British Competition Commission, which will delay the bid for a few months, allowing the company to get its house in order.
"Right now nobody's giving Rupert Murdoch credit, but he's built this empire. There are key acquisitions that went very well for him. Buying FOX back in the mid-80s ended up creating all of the content that has substantial value now. And he's one of the few newspaper barons to have successfully transformed his empire," Subotky concluded.
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