The split will officially take place on June 28 and will include a $500 million stock buyback fund, which will be used to purchase shares “on an opportunistic basis following the completion of the separation.”

The company also announced what investors call a poison pill in the form of provisions that allows existing shareholders to purchase $180 worth of stock for $90 in the new News Corp if any new investor should acquire 15% of the company.

There is a similar provision for 21st Century Fox, which is the new corporate name for the entertainment and cable assets which will remain after after the spin-off. The provisions, which will be in force for one year , appear to be intended to thwart hostile takeovers:

The rights agreements are intended to protect the stockholders of the Company and the new News Corporation from efforts to obtain control of such companies that their respective Boards of Directors determine are not in the best interests of the companies and their respective stockholders.

News Corporation decided to split in two last year under pressure from investors who believe the publishing assets and related scandals associated with phone hacking were a drag on the company.

According to a court filing released on Tuesday, CEOs of the same publishing houses that once rejected the price-fixing theory will now offer evidence to suggest they colluded with Apple in order to increase ebook prices. The case involves allegations that Apple and its late CEO Steve Jobs organized a conspiracy with the Big Six publishers to introduce a commission-style pricing system in order to wrest pricing power from Amazon.

The new filing, posted below, says that the CEOs of Macmillan, Hachette, Harper Collins, Simon & Schuster and Random House will testify about various aspects of Apple’s role in the alleged conspiracy. All of these companies with the exception of Random House were also named in the antitrust lawsuit brought by the Department of Justice and agreed to settle the case last year.

The government’s new filing says Macmillan CEO John Sargent is expected to testify that:

“[T]he deal that 5 of us did with Apple meant someone was gonna have to do it. Just luck of the draw that it was me. . . . The optics make it look like I stood alone, but in the end I had no doubt that the others would eventually follow.”

Such evidence could prove damaging to Apple, which is also expected to confront testimony from Amazon executives. Apple will also be forced explain a growing list of possibly incriminating comments and emails. One of these, cited by the government to show Apple played an active role in the price changes, describes SVP of internet software and services Eddy Cue telling Jobs:

“In the end, they want us and see the opportunity we give them but they’re scared to commit! It [has] less to do with the terms and more about the dramatic business change for them. . . . They just have to get some balls.”

The new filing also includes the views of other prominent executives, including News Corp’s Rupert Murdoch. According to Harper Collins CEO Brian Murray, Murdoch was “pissed at Amazon” and wanted to “screw Amazon.”

In its own filings, Apple maintains its long-held position that it is not a “ringmaster” of a conspiracy, as the government alleges, but that it simply offered the same pricing system, which is based on a 30 percent commission, that it offers to any company that sells through its iTunes store. Apple also maintains that it helped to create competition at a time when Amazon dominated the ebook market.

The next important step of the proceedings will take place on May 23, when the parties meet before U.S. District Judge Denise Cote for a pre-trial conference.

Here’s the filing (all 156 pages of it!) with some of the key points underlined:

DOJ Motion of Facts and Law

Getty Images

If I ever run into New York Times executive editor Jill Abramson (unlikely as it might be) I will sure as hell let her know that she is absolutely right to be excited about what her paper did with Snow Fall, which in my opinion was one of the first truly post-tablet storytelling experiences. At the Wired Business conference in New York earlier this week, Abramson said:

“Snow Fall” is now a verb.  “Everyone wants to snowfall now, every day, all desks,” she said. Reporters are waiting for time to “Snow Fall” their bigger story.  She said that the story originated from the sports desk — and took “months and months and months” of time —  but Snow Fall-type projects can come from anywhere.

Snow Fall, in case you missed it, was a multimedia project that included a gripping six-part story by John Branch, one of the Times’ Pulitzer Prize-winning writers who was intrigued by the growing number of skiing fatalities. The stories were presented with interactive graphics, videos and bios of various snowboarders and skiers. It is brilliance personified and was rewarded with 2.9 million visits and 3.5 million page views within the first six days after publication. (The Times doesn’t reveal the total traffic it received since its release in December 2012.)

Snow Fall (and other such attempts) represent a great opportunity and the future for news organizations like The New York Times, especially as they are right now in a losing battle for attention with upstart competitors that include everyone from BuzzFeed to The Huffington Post. If you are the New York Times management, it is time to take a gamble: spend $25 million on creating 100 Snow Fall-like projects.

Money for something and clicks for free

In fact, it is important that our media brethren at the Times think even bigger than that, eventhough it would also mean taking a more prosaic, mercantile and business-like perspective to what they do.

They need to NOT think about Snow Fall as an add-on — as something that makes traditional content more web- or mobile/tablet-friendly — and instead treat it as a brand-new kind of media product that is created especially for the multiple device/many-screen world.

I have been involved with online publishing for a very long time — 18 years to be exact. And in that time I have seen the incumbent media make the same mistake again and again. They’ve often tried to adapt the content they’ve created for newspapers and magazines to the online world. And when they did embrace online, even then the online reporters were asked to do the same thing they did for the newspapers or the magazines.  (The Times, to its credit, published Snow Fall first online, and then in print three days later, which suggests it had a pretty clear understanding of the digital potential of a project like this.)

Yes Dorothy, the Internet is different

The internet is and will always be an immersive, interactive and communal platform. Many publishers continue to treat it like the old two-dimensional medium. Every time we have some major news events, such as the recent Boston tragedy, the social web brings the consumers of content into our newsrooms and makes them part of the process. It is one of the reasons why most of the big media still don’t get blogs. Sure, some writers like David Carr or Paul Krugman are an exception, but look at some of the Times blogs and you see they are just news stories (or features) retrofitted for the blog medium.

Federal agents descend on the home of a suspect-at-large in the Boston Marathon bombing. Getty Images

Blogging is a way of editing the world and presenting it to my community, and that means everything from photos, links, tweets and videos, in addition to sharing my raw thoughts and fully packaged features, scoops and even basic news. Every act of sharing tells you what I am interested in and what I am willing to learn and talk about.

There is a failure in the media business to understand that the medium and the content are intertwined much like those lovers on the walls of Ajanta and Ellora caves. It was one of the many reasons why Rupert Murdoch’s The Daily failed to impress me. It didn’t really invent a new form of storytelling for the tablet.

Now take all of that as context and then understand why I keep harping on the point that Snow Fall-type products are a brand new media, a whole new style of storytelling and a model for 21st-century journalism — one that doesn’t sacrifice the best of our profession, but takes it by the scruff of its neck, and drags its bloated, aging body into the new world and revives it with a shot of adrenaline.

Mr. Excel meets Ms. Editor

Getty Images

However, that is only part of the story. The trick is not to get married to just the oohs-and-aahs of the Snow Fall, but to think of it as a business opportunity, much like the way Hollywood studios creatively monetize their blockbusters. My question is why can’t newspapers and magazine companies take the same approach and build a business model that actually factors in various opportunities that something like Snow Fall can offer?

So instead of starting with a newspaper story and adapting it to different formats, the Times should start with the Snow Fall. If you look at Snow Fall closely, you can see a cohesive approach to content, one that adapts and morphs to not only the medium of access, but to diverse business models — much like the movies.

From my own experience at magazines, I can tell you producing features isn’t cheap and can easily cost tens of thousand dollars, depending on the publication. The longer the lead time and higher the profile of the story, the bigger the costs. So from that perspective, spending some more on the post-tablet version of the feature shouldn’t break the bank.

The current editorial effort is to create something for a day or two of attention in the newspaper and hopefully for tens of thousands of pageviews. Why not start with the apps and e-readers (both paid), then follow up with the web version and then get to the newspaper. While apps and selling e-reader-oriented content might involve the Times learning new tricks, the company doesn’t need to change much for the latter two channels.

Blame my enteprenurial tendencies, but when I was experiencing Snow Fall, all I could see was stunning brand-advertising opportunities, that went beyond the dumb, commoditized advertising the Times is forced to put on its website. Why not embed a tasteful Land Rover ad or throw in one for Moncler? That is native advertising that actually allows organziations like the Times to live by their ethos and maintain the fidelity of their brand.

Hollywood, Baby

Now, let me explain why the Times can do it. And for that I will point to Hollywood again. One of the reasons why Hollywood studios succeed with the multi-tier approach to their “product” is because they do their best to ensure that they create an optimum experience. And they can do that with the right story, the right stars, the right production values and, most importantly, they have distribution. And gobs of money.

The Times and other big media companies have a lot of those same capabilities. They have great stars (real people, for god sake, are better stars than anything Hollywood can produce — see the Cleveland samaritan), they have great storytellers (editors and reporters, whose Pulitzers are testimony enough) and they have the ability to create the right production values (photographers, visual artists and designers). The Times also has a big audience – 35 million monthly visitors to their website in the U.S. alone, according to comScore – which means it has a lot of attention, which can be channeled effectively to promote new concepts.

Distribution Matters

Just as blockbuster movies get a lot of attention from media, Snow Fall got a lot of attention from the rest of the media community. Those millions of monthly visitors and lots of advertising space on print means distribution isn’t really a problem. And despite the financial headwinds, many of them — including the Times — still have a lot of money to try and finance a few dozen Snow Falls.

It isn’t clear how much money the Times spent on Snow Fall, but let’s just assume it was a small fortune. (Yes, I asked them and got this response: “We can’t disclose details about costs. Really, this is a newsroom effort. The business side works with the newsroom, of course, to provide the infrastructure and technology they need to tell stories in innovative ways.”)

And in exchange, it got a few million page views, but I am guessing they also built a nice backend infrastructure to create more such projects. As a result, the next Snow Fall is going to cost less, with most future spending going to the creative: words, photos, other multimedia elements and design.

So what will the Times (or someone like them) need to get it done? Simply put, a departure from the incumbent thinking, embracing today’s reality and re-imagining the work flow of a big city newspaper. In other words:

• Re-imagining its business model to factor in the reality of today’s world and forget the legacy of newsprint.
• Create a new breed of “producer” who can switch between Excel and content.
• Create a whole new breed of a journalist — one who has old-school values but also the ability to tell a story that works in many mediums of today.
• Build an editorial creative machine that works differently from a print-centric editorial group.

Now, if they can actually overcome their angst — and it hurts me to say this — they can change the conversation in the media business away from the increasingly shallow content and instead bring the focus back to quality and in-depth journalism, which is their stock in trade. If the New York Times management were feeling bold, it would put $25 million to work on creating 100 other Snow Falls and basically change the reader’s expectations of what long-form digital content and journalism are in the new century.

So if you want to fight BuzzFeed and HuffPo, there you go, Jill!

Let me say that again: a door-to-door salesman.

I think that’s a first, for me at least. While lots of internet services market heavily — television ads, radio spots, billboards, leaflets and print — I have never come across this sort of feet-on-the-street approach before. Trying to prevent customer churn is one thing, but this just has the ring of desperation about it… and comes as another piece of anecdotal evidence that suggests Lovefilm’s feeling incredible pressure from Netflix.

When Netflix launched in the UK and Ireland a year ago, it was a clear who would be in its sights. Reed Hastings and his team may say they are targeting the bigger pay-TV services, such as Rupert Murdoch’s Sky, but their first hurdle was undoubtedly trying to surpass the Amazon-owned rival.

Lovefilm has been competing where it can, particularly in trying to head Netflix off at the pass by signing exclusive content deals with Universal, Fox, and others. But it’s also trying extremely hard to defend itself by stopping customers from fleeing: when I tried to unsubscribe a while back I realized it was one of those irritating services that forces you to phone up to cancel (a surefire sign that I will never go back).

And you can’t blame them: it would take a brave gambler to bet against the American company right now.

Netflix is storming on almost all fronts, from its acclaimed original programming, to its balance sheet: Wall Street loves it again, as it finally recovers from the farcical series of events it inflicted upon itself in 2011.

And that is having an impact on its rivals.

Former Lovefilm boss Adam Valkin told me last year how the company had feared Netflix since 2004. And though Netflix still has some way to go — it’s still unclear whether Netflix is making inroads against its real targets, the broadcasters, and claims almost dubiously high membership numbers across the British Isles — it definitely has some crucial competitors, at least, running scared.

The new board is heavy on entertainment industry veterans and includes former Yahoo and News Corp. exec Ross Levinsohn, former News Corp exec Peter Liguori, former Walt Disney exec Peter Murphy and entertainment attorney Craig A. Jacobson, along with Tribune Co. CEO and Los Angeles Times publisher Eddy Hartenstein and Bruce Karsh and Kenneth Liang of Oaktree Capital Management, which owns 23 percent of the new company. The Chicago Tribune notes that Liguori is expected to be named CEO in coming weeks, replacing Hartenstein.

According to the Chicago Tribune:

“Before cash distributions and new financing, a 2012 analysis by financial adviser Lazard valued the broadcasting assets, including the TV stations, WGN-AM 720, CLTV and national cable channel WGN America, at $2.85 billion. Other strategic assets, such as online job site CareerBuilder and cable channel Food Network, are worth $2.26 billion.

Tribune Co.’s newspaper holdings, including the Tribune, Los Angeles Times and six other daily publications, have withered to $623 million in total value, according to Lazard.”

News Corp. CEO Rupert Murdoch, Warren Buffett and Aaron Kushner have expressed interest in buying Tribune Co. papers.

Photo courtesy of Shutterstock / Steve Broer

According to an SEC document filed on Friday, news operations, which make up about 80 percent of the restructured News Corp and include the flagship Wall Street Journal, made a 2012 operating profit of $939 million after special items. The books division, which includes publisher HarperCollins and accounts for 14 percent of the new company, had a profit of $86 million.

These figures are the EBITDA (“earnings before interest, taxes, depreciation, and amortization”) — the number investors examine closely when looking at the health of a company. Other reports today say News Corp’s publishing business is “losing money,” but that is only the case when one-off items like restructuring costs and payments related to the hacking scandal are included. The EBITDA is the more important number.

So what does all this mean for a nervous news and book industry? The good news is that the publishing operations have a fighting chance to flourish on their own. Recall that the split came about in part because many investors believed the newspaper and book businesses were a drag on the company’s money machines like Fox TV and movie studios. Until now, though, it was unclear what cash and assets the new company would be given to start its new life.

The new SEC filing clears up some of these questions by showing that “new News Corp” will have around $1 billion in cash on its balance sheet and little debt. And, in a surprise sweetener, the company will hold on to Fox Sport Australia, which will provide it with a cash cow in the future.

Going forward, though, the company’s news operations are still overly reliant on advertising, a business that is declining dramatically. While the New York Times‘ revenue is now roughly evenly split between advertising and circulation, the ratio at the News Corp properties are closer to 3:2.

The new filing, unfortunately, does not break out financials for individual newspaper properties such as the Wall Street Journal, which has a robust digital subscription model, or The New York Post, which is reportedly losing millions of dollars a year.

Overall, the bottom line is that News Corp’s publishing operations have been thrown out of the nest with a fair parachute. If certain positive trends continue — including the growth of ebooks and the Dow Jones brand — the company will be fine for a few years at least.

It’s easy to forget now, but when The Daily was first launched a little less than two years ago in February of 2011, there was a tremendous amount of attention paid to it. Apple’s iPad was still relatively new, and many publishers were hoping it would become a kind of magic carpet that would whisk them all out of the doldrums and into the promised land of revenue-generating digital content — and Murdoch was seen by some as leading the way. Obviously, the tablet newspaper failed to do anything of the sort, and in that sense its failure is just part of a gradual process of publishers waking up from their dream about apps.

Are tablet-only publications an impossible dream?

Reuters writer Felix Salmon, in fact, argues in a post on The Daily’s death that it proves tablet-only publications may actually be impossible:

“I think that The Daily has taught us all an important lesson — which is that tablets in general, and the iPad in particular, are actually much less powerful and revolutionary than many of us had hoped… the tablet is basically just one of many ways to see material which exists on the internet; it’s not a place to put stuff which can’t be found anywhere else.”

The @daily bet traditional business/editorial assumptions would work in a new medium that resists them. Is that innovation?

—
John McQuaid (@johnmcquaid) December 03, 2012

In many ways, the seeds of The Daily’s demise were (or perhaps should have been) fairly clear from the start: in my initial review of the app, I mentioned that the two most obvious things about it were that it ignored the web almost completely — showing anyone who came to the website via a shared link what amounted to a photograph of the relevant page from its app — and the content seemed rather disappointingly dull, in a traditional newspaper sort of way. Both of these criticisms have also been echoed by many of those who responded to its death notice on Monday.

Why did it have to be daily?

In addition to criticizing The Daily for choosing to go with a paywall for product that was unknown to most of the market it was trying to reach, journalism professor and author Jeff Jarvis says the iPad venture also took a flawed approach to news:

“Finally, there was the absolutely befuddling decision to make The Daily daily. News was only ever daily because it was forced into that limitation by the means of production and distribution of print. The internet freed us from those shackles of time. Why put them on again? Nostalgia?”

@carr2n @mathewi @Penenberg Innovate? No, it tried to shoehorn an old business & product model into a new device built on pay wall zealotry

—
Jeff Jarvis (@jeffjarvis) December 03, 2012

Alexis Madrigal at The Atlantic notes that The Daily failed in part because it was aimed at a “general news reader” instead of a niche, but also says it ignored the fact that media outlets no longer control the distribution of their content, regardless of whether they have an app-only approach. By divorcing the product from what Om has called the “democratization of distribution,” The Daily doomed itself, he says:

“There’s not much anyone on your Internet’s favorite websites can do aside from stick a story on the homepage, tweet/Facebook/tumble/Reddit/LinkedIn it and then pray. We do not control the distribution of our work. Period. It’s horrible and bizarre and it is also the way that the media world works now. You can’t push; the content has to pull.”

Peter Ha, an early employee at The Daily who now writes for Gizmodo, echoes this point in a post he wrote about his experience with the iPad paper. Great content, he says “doesn’t do much good if there’s no good way to share it… The Daily had every chance of flourishing and succeeding, but operating independently of the Internet as a whole was clearly a huge mistake.” And another former employee, Trevor Butterworth, summed up his view of the venture’s cause of death in a posting on his Facebook page:

“You can’t create an entirely new brand and take it behind a paywall after 4 weeks, while limiting its footprint on the Internet, and then expect people to buy it. Where was the marketing? Second, it simply added more average-reader content to a market saturated with free average-reader content.”

If you are tablet-only and paywalled, it better be good

The Daily was never an "experiment," it was an expensive, stupid, business decision.

—
  (@dansinker) December 03, 2012

John Abell of Reuters also says that regardless of whether you believe an iPad-only app like The Daily could have survived, it was doomed in part because the content was so underwhelming. He writes that he “grew increasingly annoyed at the extent to which I was reading wire service copy… In other words, I couldn’t find any reason to turn to The Daily as a news brand, and that has to be the absolute baseline requirement for a publication.” Peter Kafka at All Things Digital made the same point:

“The Daily’s key issue was a conceptual one. While the app boasted lots of digital bells and whistles, in the end it was very much a general interest newspaper that seemed to be geared toward people who didn’t really like newspapers. You can’t make that work no matter what kind of platform you use.”

For his part, Josh Benton of the Nieman Journalism Lab says that despite the issues with content and the paywall and ignoring the web, he believes that the biggest issue was the structure of The Daily — in other words, its sheer size and its daily-newspaper style approach to a digital business:

“The Daily had over 100,000 paying subscribers. That ain’t nothing! With most subscribers paying $39.99 a year (others paid 99 cents a week), minus Apple’s cut, that’s around $3 million in annual revenue — and that’s before you add in advertising revenue… You can absolutely build a real online news organization on that kind of revenue. You just can’t build one that has 200 staffers. Or 150 staffers. Or 100 staffers.”

Any analysis of The @Daily's fall that doesn't begin and end with it having a staff of more than 100 is useless on arrival.

—
Michael Roston (@michaelroston) December 03, 2012

A bold experiment, yes — but still doomed

A number of observers, including Benton, say that despite all of its flaws, Murdoch and News Corp. should be given some credit for at least experimenting with something like The Daily at a time when many newspaper companies are content to just cut costs by laying off staff. Benton said that News Corp. “made a pretty big bet on an idea. It didn’t work out. But at least they tried.” David Carr, media writer for the New York Times (which has just announced a new round of layoffs — its fourth round in five years — had a more visceral response on Twitter:

@mathewi @Penenberg Y'all kill me. You say dinosaurs need to innovate. News Corps tries something really new that flops, you grave dance.

—
david carr (@carr2n) December 03, 2012

In a sense then — to answer the question posed in the headline of this post — The Daily was both a bold experiment and doomed from the start. It was bold from the point of view of a major media empire with little or no understanding of the web or mobile, and a lot of other media companies without Rupert Murdoch’s deep pockets were watching it closely to see whether they should jump, and if so how to proceed. But then many of the lessons that could be learned should have been obvious even before The Daily launched: don’t ignore the web, don’t make your content platform-specific (unless it is unique), and don’t put a paywall around something no one has ever seen before.

Post and thumbnail images courtesy of Flickr user Stephen Brace

And yet, for all that text, there was very little heft. It detailed problems and offered a few solutions — but at no point did the inquiry really attempt to tackle the deep questions.

Sure, the report recommends replacing the UK’s current system of self-regulation for print media with a new, officially-sanctioned body that’s intended to guarantee freedom of the press while also holding outlets accountable for decisions. Beyond that, however, it feels like there was little to no understanding displayed of how the publishing world is changing — and how that is disrupting the news business it was supposed to investigate.

And this position isn’t just ignorance, either.

It seems to be deliberate.

Robert Andrews had a great blow-by-blow on how inquiry chair Lord Justice Leveson had specifically avoided many of the most important questions that news organizations are trying to address right now.

The world of online publishing, surely the future of almost all the organizations he was looking at, was dismissed with a careless wave. Questions that need answering were ignored: Where do the lines blur between news and not-news? What is the role of social networking? How is information being liberated from its traditional forms? What constitutes an act of journalism? These are topics that pre-occupy many forward thinkers in the media and yet none of these seem to have been dealt with because of the misguided opinion that “most blogs are rarely read as news or factual, but as opinion and must be considered as such”.

In fact, we all know information flows in ways that go way beyond the capability of traditional news-gathering organizations. Newspapers are weak, dying or dead — and those that are not are turning into something very different.

They have been broken by changes in supply and demand, turned upside down by the free availability of information, and knocked sideways by the internet’s ability to crush borders and barriers. And yet here, a huge public inquiry focused on wrongdoing ended up focused one tiny sliver of a much broader industry.

Leveson should have thought hard about the way that change has happened, because it is important to help the press be better in the future. Instead, he abdicated responsibility and focused on problems that already have solutions.

After all, there are many other ways to right the wrongs of phone hacking and invasions of privacy — and I’m not even talking about leaving it to the market to decide. The market’s role as a righter of wrongs is largely mythical: after all, if the market was able to reflect the moral outrage of phone hacking l, it took Rupert Murdoch just a few months between Rupert Murdoch’s decision to kill The News of the World and the launch of a Sunday edition of The Sun, which has already become Britain’s most popular weekend outlet. The market is not a perfect machine: it can be perverted.

No, I mean that there is plenty of legal recourse available. Breaking into people’s voicemail is criminal activity: it can be punished as such (and it is). Wrongly inferring that public figures are pedophiles is something the courts can deal with (and they are).

Instead we got a report that apparently made no effort to understand the deep corruption at the heart of many media organizations, or the pressures on them that encourage unethical behavior. We got a report that seems to believe that trying to control “the press” is the same as trying to control information. We got a depressing, obscurantist read focused on the worst excesses of a dying industry — not something that tried to understand the interplay between different forms of communication.

Agreeing to the new regulatory proposals is the equivalent of a deathbed confession over a crime committed long, long ago. It’s a way to expunge a feeling of guilt by someone who is on the edge of oblivions: it doesn’t make up for the original infraction and it doesn’t make tomorrow any better.

We all crave a better understanding of how those issues play out, because those are the guidelines that help regulate the future. But in the end, the world doesn’t need Leveson, because the world has already moved on.

Unidentified sources “cautioned that a deal isn’t imminent.”

Simon & Schuster and HarperCollins declined to comment.

It seems clear that News Corp CEO Rupert Murdoch is in a book publisher-buying mood: News Corp. had previously expressed interest in buying Pearson’s Penguin, right after Random House and Penguin’s talks to merge became public. News Corp is in the process of spinning off its publishing unit, including HarperCollins, into a separate company, and Murdoch recently said that the company will provide more details about the spinoff “by the end of the calendar year.”

Simon & Schuster’s revenues totaled $787 million in 2011, and according to CBS’s most recent earnings report, digital sales (ebook and audiobooks) now make up 21 percent of the publisher’s total sales. News Corp has not released details about HarperCollins revenues in recent years.

Photo courtesy of Shutterstock / Thomas Bethge 

First, some background: Reuters and the LA Times on Friday cited two senior News Corp executives to say that Tribune Corporation will soon exit bankruptcy and that CEO Rupert Murdoch is in “preliminary talks” to acquire its two flagship properties, the Times and the Chicago Tribune. News Corp today said this was “wholly inaccurate.”

Despite the denial,the reports are consistent with earlier credible reports that “Mr. Murdoch has long eyed titles such as the Los Angeles” ties. There is also Murdoch’s recent travel schedule:

In Windy City, Chicago.What a truly great metropolis.Great challenges, but great people.

— Rupert Murdoch(@rupertmurdoch) October 18, 2012

Putting aside the “will he or won’t he” question, there is the more basic question of whether such a deal would make business sense. Frankly, it’s hard to see how it does.

News Corp, recall, is in the process of spinning off its publishing assets from the cable and entertainment empire that brings in most of its cash. The company has yet to disclose the degree that it will capitalize the new publishing company but it’s safe to assume that the future corporation’s newspaper budgets will be scrutinized like never before. The challenge seems especially daunting given that the new company’s biggest asset will be Australian newspapers — which are still squeezing out strong earnings from print ads but otherwise seem on borrowed time.

If Murdoch plans to add flagship papers in Chicago and Los Angeles, he will have to come up with a quick plan to monetize them. While News Corp’s Wall Street Journal has been a model for paywall success, a lot of this success derives from its role as a business brand. If the LA Times and Chicago Tribune brands are to survive in the long run, they will likely need additional revenue streams beyond advertising and subscriptions.

It’s possible that Murdoch could use a flagship news presence in America’s three biggest cities to find new efficiencies of scale — a task that would be easier if regulators loosen restrictions to permit direct partnerships with the cities’ Fox affiliates.

All of this is speculative, of course, until Murdoch reveals his true intentions. But if he makes a play for Chicago and LA, he will have to act quickly to persuade investors that the plan isn’t simply the swan song of the last of the great newspaper barons.