News Corp. considering splitting businesses in two

News Corp. considering splitting businesses in two

Seattle : WA : USA | Jun 26, 2012 at 8:34 AM PDT
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Maurice Roufe News Report - Rupert Murdoch Phone Hacking Report -Maor Roufe

The past year and a half have not been very kind to the Murdoch family owned, News Corporation, following the News of the World phone hacking scandal that so many heads roll and saw the paper itself close amidst inquiries, shareholder waning shareholder confidence and a lot of bad press. Of course while News Corp itself and Murdoch patriarch, Rupert Murdoch continue to deal with the fallout of the phone hacking scandal, reports have it that the media group is considering to split into two.

The bifurcation was reported by the Wall Street Journal, itself owned by News Corp, which said that the media corporation would be dividing into two, separating its entertainment and TV businesses from its publishing concerns. The newspaper also added that regardless of the division, the Murdoch family would continue to control the corporation, having a 40 per cent stake in News Corp.

The spilt itself would see News Corp’s entertainment portfolio, which includes the likes of 20th Century Fox and the Fox group of channels merge into one company while News Corp’s publishing business, with the Wall Street Journal, the Times of London and HarperCollins publishing, among others, forming the other business unit. News Corp’s entertainment business is responsible for at least three quarters of its $25.34 billion that it made in the first nine months of last year while the publishing half of News Corp is said to provide around 25 per cent of the corporation’s revenues and about 10 per cent of its profits.

Commenting upon this supposed split, analysts have said that it will help certain businesses under the News Corp umbrella to distance themselves from the bad press or “reputational bleed” the News of the World had generated, namely BSkyB, which would reallocate News Corp’s 39 per cent share in the company into a separate entity.

Speaking about this, media consultant Theresa Wise told the BBC, "The media side of the business is a much faster growth business... the publishing side of the business, the books and the newspapers, are very slow or no-growth businesses. The whole company of News Corp is less highly valued because investors can't split out the slow growth from the faster growth."

News Corp itself has not yet commented upon the split reports but it is certainly being mulled, as the proposal has been kicking around at the corporation for a couple of years now though it had been objected too by Rupert Murdoch himself. But it seems that the possibility of such a move may be received well as shares of the corporation rose by 2.4 per cent following reports of the split.

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News Corp. chairman and chief executive Rupert Murdoch
News Corp. chairman and chief executive Rupert Murdoch
arkar is based in Seattle, Washington, United States of America, and is an Anchor on Allvoices.
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