News Corp. Considering Split Into Two Companies (Report)
CEO Rupert Murdoch has reportedly warmed to the idea of separating the conglomerate's entertainment businesses from its publishing assets.
LONDON - Rupert Murdoch's News Corp. is considering a split into two companies that would separate its entertainment businesses from its publishing assets, the conglomerate's Wall Street Journal reported, citing people familiar with the situation.
One of these people said that the mogul has "warmed" to the idea, of which investors and analysts have long been proponents.
a separation would put News Corp.'s film and TV businesses into one group, and its U.S., U.K. and Australian newspapers, book publishing unit HarperCollins and education businesses into another. The latter would have much smaller revenue and operating profit and include the 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 scandal has made calls for a separation louder over the past year, but Murdoch has so far opposed a separation that is mindful of the Viacom-CBS Corp. split in 2006, which separated broadcast and cable networks assets. Sumner Redstone continues to control both companies.
Similarly, a potential News Corp. split isn't expected to change the Murdoch family's control of the company's assets through a voting stake of about 40 percent, the Journal said.
A final decision on a possible News Corp. split hasn't been made, it said.
Chase Carey, News Corp.'s deputy chairman, COO and president, told investors in May that he was aware that some shareholders would love the conglomerate to spin off its newspaper assets. He acknowledged that the firm's executive team and board have discussed the idea in the past, but didn't plan to pursue it.
A News Corp. spokeswoman declined to comment.
The conglomerate's stock traded higher in Australia and is expected to also get a boost in the U.S. in Tuesday trading.