May 28 (Reuters) - Robert Thomson, chief executive of the new News Corp, said there will be “relentless” cost cuts in store for the newspaper business as it prepares to separate from Rupert Murdoch’s entertainment empire.
The cornerstone of the company will be its balance sheet - more than $2 billion in cash - to buffer the company and appease investors in the long term.
The new News Corp, as it will be known on June 28, will be “relentless” in cost cutting, said Thomson, who remained bullish about the business.
“Let me be clear, print is still a particularly powerful platform,” Thomson said.
Murdoch reminded investors gathered in Manhattan that he had built one of the world’s most successful media conglomerates and that indeed some of the properties he assembled “have their individual challenges. But they are undervalued, and underdeveloped.”
“I am not saying I didn’t make many mistakes along the way -even some spectacular ones... Why do it all over again? The simple answer, there is opportunity everywhere,” Murdoch said.
Late on Friday, News Corp said it would write down the value of its Australian and U.S. publishing assets by up to $1.4 billion, potentially wiping out the company’s estimated profit for the quarter ending June 30.
The new News Corp will include The Wall Street Journal and The Times in London, Australian pay-TV services, book publisher HarperCollins and fledgling education division Amplify.
The Fox network, the movie studio and a set of lucrative cable properties will become a separately traded company called 21st Century Fox.
The spin-off of the publishing division comes as newspapers face plunging advertising revenue and readers who increasingly prefer to get news on smartphones and tablets.
Newspaper companies - once considered blue-chip investments - have seen their shares tumble over the decade as investors fear a permanent drain in advertising revenue.
The new News Corp also unveiled its logo Tuesday - written in a cursive script based on handwriting of Murdoch and his father Keith, whose Australian newspapers were the seeds of the News Corp empire.