News Corp. Makes Split Plans Official; Rupert Murdoch to Remain Chairman of Both Companies
UPDATED: The company will separate its publishing from its entertainment assets, with Murdoch also serving as CEO of the latter, while a publishing CEO will be named later.
Rupert Murdoch's News Corp. made it official Thursday, saying it will move ahead with a plan to split its publishing businesses from its higher-growth entertainment assets.
And Murdoch said he will remain chairman of both entitities and CEO of the entertainment business, with a publishing CEO expected to be named later.
Either way, Chase Carey will remain president and COO at the entertainment group. The release didn't mention son James Murdoch, who has served as deputy COO at News Corp.
"There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corporation’s businesses to grow to new heights and enable each company and its divisions to recognize their full potential – and unlock even greater long-term shareholder value,” said Murdoch in a statement. "News Corporation's 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognize that over the years, News Corporation’s broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe. I am 100 percent committed to the future of both the publishing and media and entertainment businesses and, if the board ultimately approves a separation, I would serve as chairman of both companies."
The Murdoch family is expected to retain its 40 percent stake in both companies, which are expected to be separated next year.
Analysts in recent days have suggested that Lachlan Murdoch, the mogul's oldest son, could return to his father's empire to run the publishing business. Other candidates mentioned by observers were Tom Mockridge, CEO of U.K. newspaper unit News International, and News Corp. executive vp Joel Klein.
The company said it will put together management teams and board members in the coming months.
News Corp.'s film and TV businesses, including the Fox studio, Fox broadcast network, Fox News and other cable networks, would be part of one entity along with News Corp.'s 39 percent stake in U.K. pay TV giant BSkyB.
The company's U.S., U.K. and Australian newspapers, book publishing unit HarperCollins and education business would be united in a separate company. Key assets in that entity will be Dow Jones -- including flagship newspaper The Wall Street Journal -- The Times of London and The Sun tabloid, part of News International in the U.K., which has been at the center of the phone-hacking scandal.
The publishing company would have much smaller revenue and operating profit, with many analysts ascribing much less value to it.
News Corp.'s stock hit another multiyear high of $22.73 on Wednesday amid continuing positive reviews from Wall Street, which has long pushed for a separation of the growth-challenged publishing assets.