Murdoch mulling News Corp split
27 June 2012
News Corporation chairman and chief executive Rupert Murdoch is considering splitting the media empire into two publicly held entities following the fallout from the phone-hacking scandal in the UK.
Internal discussions are currently taking place to decide whether or not to split the publishing arm of the company from the entertainment arm, according to reports. The move is one that investors have recommended for several years.
Following investigations into New Corporation’s UK newspapers that commenced last year, the company had to put plans to take full control of BSkyB on hold.
If the split goes ahead, the Murdoch family would keep control over both companies. Fox’s film and television studios, broadcast network and new divisions would form the core of the entertainment company but exactly how the company might be divided is unclear.
At least 70% of the firm’s annual profits come from its television operations and it is continuing to expand its operations overseas. Earlier this year it took full control of ESPN Star Sports in Asia and it announced plans to launch MundoFox in January to serve of Hispanic communities in the US. It is also tipping its toe in the Chinese media landscape by acquiring a 19.9% equity stake in China’s Bona Film Group.
News Corporation’s annual revenues reported in May this year showed that it saw a 2% year-on-year increase to $8.4bn despite reputational damage to the publishing arm. The closure of the UK’s New of the World in July in the wake of the phone hacking scandal cost the company $87m and Murdoch’s son James Murdoch stepped down as chairman of the UK publishing arm New International as well as BSkyB.
David Hing, London