News Corp's Strategic Shift: Leveraging Asset Sales for Shareholder Value and Growth

In the ever-evolving media and publishing landscape, News Corp has emerged as a masterclass in strategic reinvention. The company's recent $1 billion share buyback announcement, layered atop an existing $1 billion repurchase program, signals a bold commitment to shareholder value. But this move is not merely a short-term tactic—it is part of a broader, long-term strategy to leverage its financial strength, digital transformation, and high-margin assets like Dow Jones to create sustainable growth. For investors, the question is whether this aggressive capital allocation plan, combined with margin expansion in core segments, can deliver outsized returns in a competitive market.

The Buyback as a Strategic Lever

News Corp's latest buyback program, which brings total repurchase authorization to $1.3 billion, is underpinned by a fortress balance sheet. The company's cash reserves of $2.1 billion and free cash flow of $539 million in Q3 2025 provide ample flexibility to execute the plan without compromising investment priorities. CEO Robert Thomson has emphasized that the buyback reflects management's conviction that the stock is undervalued—a belief reinforced by a 2.5% price jump on the day of the FY2025 results announcement.

The timing of the buyback is also noteworthy. With the company set to accelerate repurchases after its Q4 earnings release in early August, the move aligns with a disciplined approach to capital allocation. By prioritizing buybacks over speculative acquisitions, News Corp is signaling confidence in its ability to generate returns through organic growth and asset optimization. This strategy is particularly compelling in a low-interest-rate environment, where companies with strong cash flow can deploy capital more effectively than in the past.

Dow Jones: The Engine of Margin Expansion

While the buyback grabs headlines, the real story lies in News Corp's ability to drive margin expansion in its most profitable assets. The Dow Jones segment, which includes The Wall Street Journal and professional information services, has been a standout performer. In fiscal 2025, the segment reported $2.33 billion in revenue, with digital subscriptions accounting for 82% of total revenue. This shift to digital has not only stabilized revenue streams but also amplified margins.

Key drivers include:
- Digital Subscription Growth: Total average subscriptions to Dow Jones' consumer products reached 6.1 million in Q3 2025, with digital-only subscriptions growing by 9% year-over-year. The Wall Street Journal's digital-only subscriptions now represent 90% of its total, a testament to the segment's ability to convert users from print to higher-margin digital models.
- Professional Information Services: The Risk & Compliance and Energy divisions saw 11% and 10% revenue growth, respectively, driven by demand for premium data and analytics. Strategic acquisitions like Oxford Analytica and Dragonfly Intelligence have further strengthened these offerings, enabling Dow Jones to charge premium pricing for specialized insights.
- Cost Discipline: Segment EBITDA for Dow Jones rose 8% in fiscal 2025, despite higher employee and technology costs. This resilience underscores the segment's ability to manage expenses while investing in innovation, such as generative AI tools for Factiva and partnerships with platforms like Spotify for audiobook distribution.

The Long-Term Investment Case

News Corp's strategic shift is not without risks. The media industry remains volatile, with advertising revenue in its News Media segment declining 8% in Q3 2025. However, the company's focus on high-margin B2B services and digital subscriptions provides a buffer against these headwinds. The Dow Jones segment's 25% EBITDA margin in Q4 2025 highlights the potential for sustained profitability, even in a macroeconomic downturn.

For investors, the combination of an aggressive buyback program and margin expansion in Dow Jones creates a compelling value proposition. The buyback is expected to reduce the share count, potentially boosting earnings per share (EPS) and enhancing returns. Meanwhile, the digital transformation of Dow Jones ensures that the company remains relevant in an AI-driven world, where data and analytics are increasingly commodified.

Conclusion: A Buy-and-Hold Opportunity

News Corp's strategic shift—from speculative acquisitions to disciplined buybacks and margin-focused growth—positions it as a long-term investment. The company's strong cash flow, digital-first approach, and high-margin assets like Dow Jones provide a solid foundation for shareholder value creation. While the stock's current valuation may still appear undervalued relative to its intrinsic metrics, the execution of the buyback and continued innovation in professional information services could drive significant upside.

For those willing to take a contrarian stance, News Corp offers a rare blend of financial discipline and strategic clarity. As CEO Thomson noted, the company's balance sheet is “immaculate,” and its cash flow has been “fundamentally transformed.” In a market that often overvalues short-term noise, News Corp's long-term vision may prove to be its greatest asset.