Goldman Sachs, one of the two bankers handling the forthcoming News Corporation split, is forecasting a sharp fall in newspaper operating earnings in the 2013 financial year that started yesterday. The earnings forecast is contained in research circulated last week ahead of the formal announcement of the split on Thursday night, Australian time. It calls into question the value of the mastheads in the News Corp accounts for the June 30, 2012 financial year.

Goldman Sachs forecast the earnings before interest and tax for the newspapers would fall to $US321.2 million in 2012-13, a fall of close to 50% from the $US600.3 million forecast for the 2011-12 financial year. It is about a third of the $US989 million earned in the 2010-11 financial year.