News Corp (NWS) Deep Dive: Deciphering the Valuation Gap in a Digital-First Era

January 09, 2026 at 10:25 AM EST

Date: January 9, 2026

Introduction

In the rapidly evolving landscape of global media and digital information services, News Corp (NASDAQ: NWSA, NWS) stands as a unique conglomerate that has successfully navigated the treacherous transition from the "Gutenberg era" to a data-driven, AI-integrated future. As of early 2026, the company is no longer defined solely by its storied newspapers like The Wall Street Journal or The Times, but rather by its high-margin professional information services and its commanding presence in global digital real estate.

Under the persistent gaze of activist investors and the strategic leadership of CEO Robert Thomson, News Corp has spent the last 24 months aggressively simplifying its portfolio—most notably through the 2025 divestiture of its Australian subscription video unit, Foxtel. This research deep dive explores how the company is leveraging its premium intellectual property to extract record licensing fees from AI developers while fighting a multi-front war for market share in the U.S. residential real estate portal space.

Historical Background

The modern iteration of News Corp was born in June 2013, following the corporate "split" from 21st Century Fox. While the entertainment assets went one way (eventually being sold to Disney), the publishing and Australian assets remained under the News Corp banner. This "new" News Corp inherited a legacy of print journalism that many analysts initially viewed as a declining liability.

However, the last decade has been a story of radical reinvention. Founder Rupert Murdoch’s decision to appoint Robert Thomson as CEO proved pivotal; Thomson shifted the focus from scale for scale's sake toward premium "proprietary" data. Key milestones include the acquisition of the OPIS energy data business and Base Chemicals in 2021/2022, which transformed the Dow Jones segment into a professional information powerhouse. In late 2023, Lachlan Murdoch became the sole Chair, marking a generational shift in governance that coincided with a renewed focus on shareholder returns and digital-first growth.

Business Model

News Corp’s current business model is structured around five primary pillars, with a clear tilt toward recurring digital revenue:

Dow Jones: Comprising The Wall Street Journal, Barron’s, and a burgeoning Professional Information Business (PIB). This segment focuses on high-value corporate subscriptions and specialized data for risk, compliance, and energy markets.
Digital Real Estate Services: This includes a 61.4% stake in Australia’s REA Group (ASX: REA) and an 80% stake in Move, Inc. (the operator of realtor.com). These platforms generate revenue through premium listings and lead generation.
Book Publishing: HarperCollins, the world’s second-largest consumer book publisher, operates across all genres and formats, including a significant and growing audio and e-book segment.
News Media: A global portfolio of news brands including The New York Post, The Times, The Sunday Times, and The Sun in the UK, as well as News Corp Australia. Revenue is driven by a mix of digital subscriptions and advertising.
Divested/Simplified Assets: In early 2025, the company completed the sale of its Subscription Video Services (Foxtel) to DAZN, a move that significantly improved the company’s margin profile and simplified the balance sheet.

Stock Performance Overview

As of January 9, 2026, the performance of NWSA shares reflects a company in the middle of a valuation re-rating.

1-Year Performance: Shares have traded relatively flat, down roughly 3.7% over the last 12 months. This underperformance relative to the S&P 500 (+17%) is largely attributed to the "wait and see" approach investors took during the Foxtel sale and the ongoing litigation regarding AI copyright.
5-Year Performance: The stock has delivered a compounded annual growth rate (CAGR) of approximately 5%. This period was marked by the post-pandemic advertising slump followed by a surge in digital real estate valuations.
10-Year Performance: Since 2016, the stock has mirrored the company’s digital transformation, seeing steady but volatile growth as the market gradually recognized the value of the REA Group stake, which often trades at a higher multiple than the consolidated News Corp entity.

Financial Performance

News Corp’s FY 2025 (ended June 30, 2025) was described by management as a "sterling" year, and the momentum has carried into Q1 of FY 2026.

Revenue & Income: For the full year 2025, revenue hit $8.45 billion, with net income surging 71% to $648 million.
EBITDA Margins: Total segment EBITDA reached a record $1.42 billion in FY 2025, a 14% increase year-over-year. This expansion was driven by the high-margin Professional Information Business within Dow Jones.
Q1 2026 Update: In the quarter ended September 30, 2025, the company reported revenues of $2.14 billion (+2%). Adjusted EPS of $0.22 beat analyst consensus, largely due to a 67% surge in News Media EBITDA following aggressive cost-cutting and pricing power in digital subscriptions.
Balance Sheet: With the proceeds from the Foxtel sale, News Corp has significantly reduced its debt and accelerated its stock buyback program, purchasing shares at four times the pace of the previous year.

Leadership and Management

The leadership duo of CEO Robert Thomson and Chair Lachlan Murdoch has maintained a remarkably consistent strategy. Thomson, recently extended through June 2030, is the architect of the "digital-first" pivot. Under his tenure, digital revenues have grown from 20% to over 50% of the company total.

Governance, however, remains a point of contention. The Murdoch family’s dual-class share structure (controlling ~39% of the voting power) has been a primary target for activist investors. Despite this, the board has made concessions, including a $1 billion share repurchase program and the disposal of non-core assets, which has helped quiet some institutional dissent while maintaining the current leadership’s strategic autonomy.

Products, Services, and Innovations

Innovation at News Corp is currently centered on the intersection of premium content and Artificial Intelligence.

The OpenAI Partnership: In mid-2024, News Corp signed a landmark five-year deal with OpenAI worth over $250 million. This allows ChatGPT and other products to access current and archived content from the company's major publications.
Dow Jones PIB: The Professional Information Business is the company’s most advanced technical arm. Innovations in AI-driven risk and compliance tools have led to a 16% revenue growth in this sub-segment, as corporations seek automated solutions for regulatory monitoring.
REA Group Dominance: In Australia, REA Group continues to out-innovate competitors with AI-driven property valuation tools and an integrated mortgage broking service, maintaining its position as the clear market leader.

Competitive Landscape

News Corp competes in three distinct but overlapping arenas:

Financial Information: The Wall Street Journal faces fierce competition from The New York Times (NYSE: NYT) in the general news and subscription space. While NYT has more total subscribers (11.8M+), Dow Jones leads in the business-critical B2B space, competing more directly with Bloomberg LP and Refinitiv.
Digital Real Estate: In the U.S., realtor.com is currently fighting a "portal war" with Zillow Group (NASDAQ: Z) and CoStar Group (NASDAQ: CSGP). While Zillow remains the traffic leader, realtor.com has focused on higher-intent leads and rental syndication deals to improve profitability.
Book Publishing: HarperCollins competes with Penguin Random House for top-tier manuscripts. The market remains consolidated, though the growth of AI-generated content and self-publishing platforms poses a long-term structural threat.

Industry and Market Trends

Three macro trends are currently defining News Corp’s trajectory:

AI Licensing Arbitrage: As Large Language Models (LLMs) hungry for high-quality data run out of public internet content, the value of "behind-the-paywall" premium journalism has skyrocketed. News Corp is leading the charge in monetizing this "intellectual property goldmine."
The Death of the "Free" Internet: The shift toward subscription models is accelerating as ad-supported models struggle with privacy regulations and AI-driven search changes.
The "Flight to Quality" in Real Estate: High interest rates in 2024-2025 led to a lower volume of home sales, but a higher reliance on premium digital platforms for lead generation. This has benefited established players like REA and realtor.com who provide verified data.

Risks and Challenges

Despite strong financials, News Corp faces significant hurdles:

Dual-Class Share Structure: The control held by the Murdoch family remains a "valuation discount" in the eyes of many institutional investors.
Advertising Volatility: While digital subscriptions are growing, the print and digital advertising markets remain sensitive to macro cycles and the dominance of Google and Meta.
AI "Pillaging": Despite the OpenAI deal, News Corp is in active litigation with other AI companies (like Perplexity) over alleged copyright infringement. A legal loss could undermine the company’s IP valuation.
U.S. Housing Market: Any prolonged downturn in the U.S. residential market directly impacts Move (realtor.com) revenues, which are already under pressure from CoStar's aggressive marketing spend.

Opportunities and Catalysts

Investors are looking toward several key events in 2026:

Portfolio Breakup: Activist Starboard Value continues to push for a spin-off of the digital real estate assets. Many analysts believe the "sum of the parts" valuation of News Corp is significantly higher than its current market cap.
New LLM Deals: News Corp is currently in negotiations with other tech giants (Google, Meta, Anthropic). Each new multi-million dollar licensing deal acts as a direct catalyst for EBITDA growth.
Realtor.com Market Share: With CoStar (Homes.com) signaling a 35% cut in marketing spend in early 2026, realtor.com has a strategic opening to reclaim the #2 spot in the U.S. market.

Investor Sentiment and Analyst Coverage

Sentiment toward News Corp is currently "Constructive to Bullish."

Wall Street Consensus: The consensus rating is a "Strong Buy," with an average price target of $37.63, suggesting significant upside from current levels in the mid-$20s.
Hedge Fund Activity: Beyond Starboard Value, institutional interest has increased following the sale of Foxtel, as the company’s "cleaner" P&L makes it an easier target for quantitative analysis.
Retail Sentiment: While often overshadowed by high-growth tech stocks, NWSA has seen a resurgence in retail interest due to its aggressive share buybacks, which are viewed as a floor for the stock price.

Regulatory, Policy, and Geopolitical Factors

The geopolitical landscape of 2026 is complex for a global media entity:

The Trump Administration: The administration's "AI Action Plan" favors federal deregulation. News Corp must navigate this to ensure that federal copyright protections are not weakened in the name of "unfettered AI development."
Australian News Code: The Australian government continues to tighten the News Media Bargaining Code. As original agreements with Meta and Google expire, News Corp’s Australian assets remain at the heart of a trade tension between the U.S. and Australia.
UK Competition Law: The UK’s Digital Markets, Competition and Consumers (DMCC) Act, which became fully active in 2025, provides News Corp with additional leverage when negotiating with Big Tech platforms operating in the British market.

Conclusion

News Corp in 2026 is a study in calculated adaptation. By pivoting away from traditional broadcast (Foxtel) and doubling down on digital real estate and professional data (Dow Jones), the company has built a resilient, high-margin foundation. The "woo and sue" strategy regarding AI ensures that its legacy assets are treated as modern intellectual property rather than dying print relics.

For investors, the central thesis remains the "valuation gap." The market currently values the consolidated company at a discount compared to the sum of its parts—specifically the REA Group stake and the high-growth Dow Jones PIB segment. Whether the company finally chooses to unlock this value through a spin-off or continues to narrow the gap through aggressive buybacks and AI royalties will be the defining story for the remainder of 2026.

Disclaimer: This content is intended for informational purposes only and is not financial advice. The author has no position in the securities mentioned as of the time of writing.