News. Corp.’s Separation of Publishing & Media Businesses

 

News Corp. separated its publishing and media/entertainment businesses after the market closed on June 28, 2013.

For every four shares of News Corp. (NWSA) common stock which shareholders previously owned, they will now own four shares of stock in the new media company (21st Century Fox, FOXA) and one share of stock in the publishing company (News Corp., NWSA):

• 

  News Corp. Cl. A (NWSA)
  post-split
  07-02-13

  One share of News Corp. (NWSA), which represents the publishing business.  The publishing business plans to have $2.6 billion cash-on-hand, no debt, a $500 million repurchase program, and will pay dividends to shareholders.

1. Dow Jones & Co.

2. British and Australian newspapers

3. HarperCollins book publishing

4. Australian television

• Four shares of 21st Century Fox (FOXA), which represents the media & entertainment business.  These businesses generated approximately 90% of operating income in fiscal 2012.  The company will concentrate on launching a national sports network called Fox Sports 1, which will compete with ESPN.

1. 20th Century Fox film studio

2. Fox News cable channel

3. Fox broadcast network

Here’s the explanation from News Corp. on how to allocate the cost basis of former News Corp. shares to the separated companies of News Corp. and 21st Century Fox.  Scroll down to the paragraph which overlaps the bottom of page one and the top of page two.  It essentially says that an investor can allocate 88.55% of their cost basis to their FOXA shares and 11.45% of their cost basis to their NWSA shares.  Or alternately, that the allocation percentages can by slightly different:  88.50% and 11.50%.

Make sure to save the cost basis explanation, and give it to your accountant after you sell any of the aforementioned shares, so that he/she can properly calculate your profit/loss when you file income taxes.  It’s important: please do it now.

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