News Corp to Buy Investor’s Business Daily for $275 Million

News Corp announced last week that it plans to buy Investor’s Business Daily (IBD) from O’Neil Capital Management for $275 million. Founded in 1984 by William J. O’Neil, IBD has close to 100,000 digital subscribers across its platforms. IBD also distributes a print publication once a week, as well as up-to-date financial and investment news on Investors.com. In February 2021, Investors.com reached 10.8 million average monthly unique visitors.

The acquisition is expected to close in the fourth quarter of News Corp’s fiscal year 2021 which ends June 30, 2021, assuming it meets also closing conditions and successfully passes any regulatory hurdles. After the deal closes, IBD will operate as a stand-alone brand as part of Dow Jones. IBD’s 130 employees will continue to work out of the company’s Los Angeles headquarters.

The acquisition will help Rupert Murdoch’s News Corp expand Dow Jones’s offerings by adding proprietary data and tools for investors to help them identify top stocks. In addition to Dow Jones, News Corp owns the Wall Street Journal, New York Post, News Corp Australia, HarperCollins Publishers, Fox Sports, The Times and Sunday Times in the U.K., and Realtor.com.

Enhance expertise, coverage and tools

“IBD will greatly enhance our e-expertise in finance, with compelling digital coverage, unique tools and high-yielding services. We will be able to cross-sell and up-sell with Dow Jones financial products and provide specialist insights for a knowing business audience,” said Robert Thomson, Chief Executive of News Corp, in the March 25, 2021 announcement.

“Dow Jones and the Wall Street Journal reported record profits in the last quarter, and I have no doubt that IBD’s savvy digital products and journalism will significantly bolster profitability at the Dow Jones segment. This transformative deal obviously comes as investor interest is surging in stock and bond markets and there is a premium for intelligence, insight and integrity,” Thomson added.

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Almar Latour, CEO of Dow Jones shared his comments as well.

“The prospect of combining our collective skills and strengths, especially our shared legacies of trusted, rigorous journalism and research, opens up a wide range of potential. It creates exciting possibilities to grow quality at scale, diversify our tailored digital offerings and forge even deeper connections with the professional and retail investment communities,” Latour said.

News Corp’s Q2 FY2021 financials

By leveraging IBD’s digital subscription portfolio to complement Dow Jones, News Corp could continue to see growth in its quarterly financials. For the period ended December 31, 2020, News Corp reported total revenue of $2.41 billion, a 3% decrease over the same period in fiscal year 2020. News Corp attributed the slight drop in revenue to lower revenue in News Media which included some changes in News Corp’s Australian operations. Despite the revenue decrease, the company reported net income of $261 million, more than double the $103 million reported for the second quarter of fiscal year 2020.

“The second quarter of fiscal 2021 was the most profitable quarter since the new News Corp was launched more than seven years ago, reflecting the ongoing digital transformation of the business. We reported the largest profits for Dow Jones since the acquisition of the company in 2007, with segment EBITDA increasing 43 percent and traffic across the Dow Jones digital network surging 48 percent,” said Thomson in a February 4, 2021 news release.

William Scott O’Neil, CEO of O’Neil Capital Management and IBD said the company prides itself on helping to educate and empower investors to make informed investment decisions.

“We can’t think of a better place than News Corp and Dow Jones to take Investor’s Business Daily into its next phase of growth and create even more value for our loyal subscribers,” O’Neil said.

Jerry Ferrara, president of IBD, also commented on the sale to News Corp.

“After a period of rapid growth and digital innovation, now is the right time for us to take our next big leap forward. Joining the News Corp and Dow Jones family will afford us many opportunities to continue scaling our business, increase our global distribution and accelerate our initiatives. IBD’s core purpose will not change but will only be amplified as we embark on the next chapter of our humble but storied history. We are in a unique moment in time where new retail investors are entering the financial markets. They need authoritative resources, quality information and truthful guidance like never before,” Ferrara said.

Insider Take

While IBD doesn't bill itself as a media organization, per se, News Corp and Dow Jones do. This acquisition can be considered part of the media consolidation we predicted earlier this year. It also seems to be a win-win. Dow Jones is on the uptick, and IBD's subscription revenue will immediately boost News Corp's bottom line. The products are a great complement to one another.