You have to give newsman Rupert Murdoch credit. Pressured by Wall Street's demands for higher returns, the media titan is spinning off his collection of newspapers with a $2.6B in cash and no debt.

He’s giving the papers a fighting chance. The Wall Street Journal, New York Post, Times of London, Sun and Australian newspapers will have a fat financial cushion to deal with the rocky transformation of the media world.

It also puts CEO Robert Thomson, a news hound in the mode of Murdoch, in position to pick up some of the available properties in the Tribune Co. bankruptcy auction.

Murdoch reportedly would love to go Hollywood by picking up the Los Angeles Times, but is held back by the Federal Communications Commission’s cross ownership rules. Murdoch though has a knack of getting what he wants.

With a blessing from an unlikely ally, former New York Governor Mario Cuomo, News Corp. was able to acquire the stumbling New York Post in 1993 as the FCC waived its cross-ownership rule to save the financially faltering daily. And what of President Obama’s nightmare of Murdoch getting his mitts on the Chicago Tribune? Wouldn’t that be a fun thing to watch?

Murdoch’s papers get to stand on their own in March. They’ll miss the financial safety net offered by Fox TV network/programming and Hollywood film studio, but the papers will give competitors a run for their money.

In sharp contrast to News Corp., Time Warner CEO Jeff Bewkes, who has a cable background as former CEO of HBO, is kicking the Time Inc. magazine group out the door with an expected $1B in debt. He tried to cut a merger deal with Meredith Corp. and after that collapsed Bewkes resorted to Plan B.

Time Inc., which is led by Time, Sports Illustrated, Fortune and People, recorded a $420M operating profit, which is less than half of what it earned eight years ago. Time Inc. CEO Laura Lang is jumping ship after a 15-month stint because she feels the spin-off will need a different type of CEO.

Good luck to the new captain of the Time Inc. ship. There are tough seas ahead.

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