Media mogul Rupert Murdoch wants to add Dow Jones (NYSE:DJ) to his collection. But if the third-quarter results his News Corp. (NYSE:NWS) released last week are any indication, he's got a good crop of assets as is. In an unusual performance for such a diverse company, the majority of News Corp.'s segments posted healthy improvements.
The film segment easily led the pack, increasing its contribution to operating income by 82% to $410 million, based largely on the strength of such releases as Borat, Night at the Museum, and The Devil Wears Prada. It was joined by the cable networks, satellite television, magazines and inserts, newspapers, and book publishing in contributing to the company's 22.6% operating income improvement, for a total of $1.24 billion. Only the broadcast TV operation's contributions fell in the quarter. Otherwise, total revenue increased 21% to $7.5 billion.
Two weeks ago, News Corp. announced a $60-per-share offer for Dow Jones, which is controlled by the Bancroft family and its super-voting class of stock. Thus far, the family's made no official response; observers close to the situation maintain that the Bancrofts oppose the buyout. Jim Ottaway Jr., a former Dow Jones board member and the company's largest non-Bancroft shareholder, has also voiced fears that a News Corp. takeover would result in a "loss of the independence and integrity of a leading national editorial voice."
Dow Jones owns The Wall Street Journal, Barron's, the Dow Jones Indexes, and the Ottaway group of community newspapers. While its special-interest financial publications have insulated it somewhat from the suffering of general circulation publishers such as Gannett (NYSE:GCI), Tribune (NYSE:TRB), and McClatchy (NYSE:MNI), it hasn't entirely been immune to the newspaper industry's current woes.
At News Corp., Murdoch plans to add a financial and business news network to his Fox group later this year. Enfolding the Journal and Barron's in his holdings would clearly benefit that effort.
In the meantime, it appears that News Corp. constitutes a strong operation overall. Fools would be smart to consider adding it to their media investments.
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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your questions or comments. The Motley Fool has a disclosure policy.
