Look beyond the soap opera at News Corp.

Rupert Murdoch's media empire has more than its share of family drama, but that doesn't mean it's a bad investment.

By Jonathan Berr Jun 17, 2013 9:33AM
News Corp. (NWS), the media empire that tycoon Rupert Murdoch has spent decades building, has been making headlines of its own lately -- for all the wrong reasons.

On Thursday, Murdoch, 82, announced he had filed for divorce from his third wife, Wendi Deng, after 14 years of marriage, which may set the stage for a nasty family battle over money and power.
Though the 44-year-old Deng reportedly has no equity in the global media giant company, her daughters Grace Murdoch, 11, and Chole, 9, are holders of both Class B and A shares worth about $276 million held in trust, according to published reports. When Deng found out a few years ago that Murdoch hadn't given her daughters voting rights in the company that his adult children had, she threatened to leave him. They worked out their differences.

The timing of the Murdoch divorce couldn’t be worse. The company is in the process of separating its slow-growing publishing business from its more profitable operations such as Fox News Channel. Plus, questions abound about succession planning at News Corp.

Rupert Murdoch in October 2011 (© Justin Sullivan/Getty Images)Rupert Murdoch had groomed his son Lachlan to take over his empire, but the two couldn't work together, leading the younger Murdoch to quit News Corp. in 2005. His second son, James, got caught up in the U.K. phone-hacking scandal. Elisabeth Murdoch, one of his daughters, reportedly has blamed James for getting their father into one of the worse public relations crises of his career.

Still, even with all this internal drama and the many questions about its future, News Corp. has plenty going for it.  

Though 20th Century Fox ranks fourth at the box office this year, with 10.4% share, several coming releases look promising, such as "The Heat," a comedy starring Sandra Bullock and Melissa McCarthy. Fox News Channel continues to rule the ratings, attracting more viewers than CNN and MSNBC combined.

Shares of News Corp. are pretty cheap, trading at a price-to-earnings multiple of 12.47, near their five-year low. That's also a discount to Disney's (DIS) 19.5 and Time Warner's (TWX) 17.8. The average 52-week price target on NWS is $36.61, about 16% higher than where it currently trades.

Despite the soap opera, News Corp. offers a compelling value. However, investors should wait for the split and snap up shares of the broadcast business, which will trade under the 20th Century Fox name.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
19Comments
Jun 17, 2013 10:30AM
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I can't believe you actually published this:  "    Fox News Channel continues to rule the ratings, attracting more viewers than CNN and MSNBC combined.     "

Jun 17, 2013 1:02PM
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Barry, the truth is, if Obama was white you would be his biggest cheerleader praising

him from forein policy to the stock market.Of course, you missed the bull market and

like most Repubs,are overcome with bitterness.

Jun 17, 2013 12:40PM
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Fact is, Murdock gave up his Australian citizenship in order to grow his business of misinformation, here. He has also spread and mislead the British for Decades. He is worst than any Terrorist, yet he is loved by some Americans. Go Figure.
Jun 17, 2013 12:50PM
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Barry, I`m still waiting for you to be man enough to say 5 positive things about

Obama.Most times you can`t even spell his name.Are you attracted to his wife?

Jun 17, 2013 12:37PM
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BARRY S. Don`t act like you`re objective.we all know you`re an extreme right winger

with racist views who never says anything good about Obama.I challenge you to say

5 things good about Obama.

Jun 17, 2013 11:50AM
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Unspeakable perversions are willfully, gleefully ignored when committed by a

liberal/leftist/progressive/dimocrat/communitarian/marxist (what ever they are calling themselves this year).  However, a divorce becomes breaking news when it involves a conservative.  Media bias, much? 

Jun 17, 2013 12:33PM
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Lincoln would role over in his grave if he saw what the Republican party has turned into.

All the Republican lies, the whinning,the war mongling,the racism,the crying, the blaming

would ake honest Abe physically ill.He`ld be a Democrat if he were alive.I didn`t even

mention the Nazi TEA party that`s infiltrated the party.

Jun 17, 2013 2:33PM
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I thought he was pretending to be "Little Red Riding Hood" one of his possible alternate egos...

 

Release the Hounds...

Get off my Lawn...

Go shidt elsewhere...

Jun 17, 2013 2:29PM
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Well at least it sounds like you are a Republican, ABS...

 

I find it amusing how so many label the News Media,shows and programs; Liberal or Conservative even some that I think might be better known as Progressive...

I personally believe it's more in the "eye of the beholder" that we may label entities as such..

If they don't follow a Party line strictly or the Agendas we put forth, we do our best to discredit "anything" they say or present..

I also can't believe how so many Americans aren't "thankful" that we have these opposing viewpoints to make better choices about our lives and be informed about what goes on around us.

And how we have better guidance then most to move forward. 

Jun 17, 2013 12:30PM
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Fact is, most TV media is Fair and Balance other than Fox. In fact, most go overboard to make sure they don't appear left leaning. So Sure, MSNBC mostly leans Left but they give the Right more than enough Airtime to voice their views. This everything is far Left is BS was created by the Right so that smart people can become dumb people. And that exactly what you will become if you only listen to Fox. That's why we no longer have a living wage here and our country is falling apart, far too many puppets that watch Fox and think it's from God's mouth to your ears. It isn't.

I actually find most news outlet to be mostly crap. Fox just happens to be the worst.

Jun 17, 2013 12:11PM
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IQ168:LMFAO !This isn`t 1980.Most of the media is far right these days.Some of the

media is extreme right wing, bordering on Nazi.Look how much grief the media has

given Obama.

Jun 17, 2013 11:52AM
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Who cares about their bitter,whinning,racist problems.They are on par with the National

enquirer and pro wrestling.Nobody with brains believes all their right wing lies.

Jun 17, 2013 11:42AM
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Murdock is proof that the British never lost their fight Against America. The British are still spilling their lies to Americans, and Fox is the outlet.

Having more viewer is only more Proof that far too many Americans are puppets. If Fox is your primary news source, then you have a serious problem. The British are coming, the British are coming, hell, they never Left.

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