News Corp. to cut ties with tech site AllThingsDNews Corp., which is severing ties with AllThingsD founders Walt Mossberg and Kara Swisher at the end of the year, objected to the terms of the journalists’ contract soon after the media company took over the operation in 2007, two people with knowledge of the matter said.
Mossberg and Swisher together take slightly more than 50 percent of AllThingsD’s conference revenue, including ticket sales and sponsorships, according to people familiar with the business, who asked not to be identified because the terms are private. The contract was originally negotiated years before News Corp.’s Rupert Murdoch acquired AllThingsD as part of his Dow Jones purchase, and he and other executives bristled at the arrangement, people with knowledge of their thinking said.
The AllThingsD Web site was begun a few years after the conference business started in 2003 and became a top source of news on start-ups, media and the technology industry. Even though executives didn’t view the contract terms as ideal, the arrangement was profitable for News Corp. and the company extended the partnership for three additional years in 2010, according to the people. Still, management didn’t expect the agreement to continue beyond 2013, they said.
Swisher disagreed with that characterization yesterday, saying in an interview, “I have no idea if Rupert was unhappy or not with the previous contract, but News Corp. negotiated a new one that they happily signed in 2010.”
The split leaves News Corp. without two of its highest-profile business journalists, while sending Mossberg and Swisher in search of new partners and investors. The pair said this week that they would have a new Web site and conference business starting Jan. 1 under a different corporate structure. Mossberg and Swisher have been in talks with two potential backers: Comcast Corp.’s NBCUniversal and magazine publisher Hearst Corp., according to people with knowledge of the negotiations.
The talks with NBCUniversal included the possibility of creating a new technology show for CNBC that would be based on the same kind of coverage found in AllThingsD, two people said. The financial cable network has recently looked at ways to increase its coverage of Silicon Valley start-ups and businesses, according to people with direct knowledge of those discussions.
Mossberg and Swisher also are working out plans to bring along all of the current AllThingsD editorial and administrative staff and would give them an equity stake in the new venture, three of the people said.
Ashley Huston, a spokeswoman for News Corp., declined to comment on the company’s contracts with Mossberg and Swisher. CNBC’s Brian Steel also declined to comment, while Hearst’s Alexandra Carlin didn’t respond to requests for comment.