News Corp and 21st Century Fox, the media companies controlled by the Murdoch family, said they won't be moving to a new building at New York's World Trade Center, as previously planned.
The companies will keep their current headquarters at 1211 and 1185 Avenue of the Americas in midtown Manhattan. The two businesses have options to extend their leases there through 2025. In June, News Corp and Fox said they had reached a non- binding agreement with developer Larry Silverstein to move to a new skyscraper downtown, which would be known as 2 World Trade Center.
"We have concluded that a relocation project of this scope could be distracting in the near-term and, given the scale of investment in a relocation of this size, that our resources would be better directed elsewhere," brothers James and Lachlan Murdoch said in a statement to employees on Friday.
The decision is a major setback to plans to complete the World Trade Center rebuilding project, a decade and a half after terrorists destroyed the original Twin Towers. Just Thursday, at a quarterly market briefing, brokers from CBRE Group, the firm that represented the Murdoch companies in negotiations with Silverstein, said that the move would validate lower Manhattan as a hub for media tenants following magazine publisher Conde Nast's relocation of its headquarters to 1 World Trade Center.
As part of Fox and News Corp's tentative deal to anchor 2 World Trade Center, a design by architect Norman Foster was scrapped in favour of a new one by Danish architect Bjarke Ingels, which called for a series of blocks, one on top of another, with stepped green terraces. The Murdoch companies saw the Ingels design, which would have included space for television studios, as better suited for media companies than Foster's, which was more in line with the needs of financial tenants.
Ingels said in an interview that he found out by phone on Friday morning that the Murdoch companies weren't going to occupy the building. He said he was optimistic that his design would work for another company.
"We spent a year and a half to make something that we believe holds some very unique qualities," he said. "It combines both the historical and the new New York."
Investor sentiment in the media business has changed since the deal was first announced. Walt Disney said in August that its flagship ESPN sports network was losing subscribers and that its profits would climb less than expected in its TV business. The news sent the shares of cable-TV programmers tumbling. Fox, which owns networks such as Fox News, Fox Sports and FX, has seen its stock slide 24 per cent since then.
The companies will keep their current headquarters at 1211 and 1185 Avenue of the Americas in midtown Manhattan. The two businesses have options to extend their leases there through 2025. In June, News Corp and Fox said they had reached a non- binding agreement with developer Larry Silverstein to move to a new skyscraper downtown, which would be known as 2 World Trade Center.
"We have concluded that a relocation project of this scope could be distracting in the near-term and, given the scale of investment in a relocation of this size, that our resources would be better directed elsewhere," brothers James and Lachlan Murdoch said in a statement to employees on Friday.
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As part of Fox and News Corp's tentative deal to anchor 2 World Trade Center, a design by architect Norman Foster was scrapped in favour of a new one by Danish architect Bjarke Ingels, which called for a series of blocks, one on top of another, with stepped green terraces. The Murdoch companies saw the Ingels design, which would have included space for television studios, as better suited for media companies than Foster's, which was more in line with the needs of financial tenants.
Ingels said in an interview that he found out by phone on Friday morning that the Murdoch companies weren't going to occupy the building. He said he was optimistic that his design would work for another company.
"We spent a year and a half to make something that we believe holds some very unique qualities," he said. "It combines both the historical and the new New York."
Investor sentiment in the media business has changed since the deal was first announced. Walt Disney said in August that its flagship ESPN sports network was losing subscribers and that its profits would climb less than expected in its TV business. The news sent the shares of cable-TV programmers tumbling. Fox, which owns networks such as Fox News, Fox Sports and FX, has seen its stock slide 24 per cent since then.