Putting a price on the two sides of News Corp.

Splitting into two companies - one for entertainment, one for publishing - seems like a real possibility. Top executives from the News Corp. empire are at a pow wow in NY this afternoon to discuss the potential division. Attending the meeting, the NYT reports, is CEO Rupert Murdoch, his son James, and Chief Operating Officer Chase Carey. Based on early assessments, It's doubtful that a split would change much - the Murdoch family would probably maintain a controlling share of both companies, and Murdoch is unlikely to make any major executive changes at the top. (Would they consider basing the entertainment company in L.A.? That would be interesting.) Analysts are comparing the move to the splitting up of Viacom in 2005 (one company for CBS and one company for Paramount). As you might guess, News Corp.'s entertainment side, which includes the Fox movie studio, and the television network and channels, are the most valuable part of the company. The entertainment assets generated $6.2 billion in revenue for the quarter ended in March; the publishing side generated about $2 billion. From DealBook:

Entertainment companies tend to command relatively high trading multiples compared to their more traditional publishing counterparts. The Walt Disney Company, for instance, trades at 16.7 times its diluted earnings per share, while Time Warner trades at 13.5 times and Viacom 11.3 times. Publishing companies trade at much lower heights. The Gannett Company trades at about 7.3 times earnings, for instance. Nomura's Michael Nathanson estimates that News Corporation's entertainment business will earn $3.1 billion for its 2012 fiscal year. Assuming the new company traded at Disney's multiple -- analysts consider it a reasonable level, given the high quality of the News Corporation operations -- the newly independent business would have a market value of about $52.5 billion. In other words, the business would be worth nearly as much as all of News Corporation today.

That's probably understating the publishing side, which includes Dow Jones, publisher of the WSJ, the HarperCollins book business, and a newly formed education division.