News Corp confirms split of publishing and entertainment
Rupert Murdoch announces separation of assets as one-time rival Fairfax goes for radical restructure too
AS WIDELY expected, News Corp, the global media giant whose assets include movie studio 20th Century Fox, publishers HarperCollins and newspapers such as The Sun and the Wall Street Journal, has announced plans to split its assets into two distinct groups - a publishing wing and an entertainment division.
In a statement today, Rupert Murdoch, chief executive and chairman, said: "We recognise that over the years, News Corp'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."
The move was initially floated in a story in the News Corp-owned Wall Street Journal on Tuesday, and has been picked over by UK media analysts trying to discover what it will mean for the media group's arm in this country, News International, and the company's three newspapers - The Sun, The Times and The Sunday Times.
The splitting of the company will see the severing of Murdoch's ties to his newspapers, where the mogul began to build his empire, as he will become the CEO and chairman of the entertainment and media business, while Chase Carey, currently chief operating officer at News Corp, will take on the same role with the publishing company.
US shareholders - who have agitated for the company to hive off the British newspapers from the more lucrative film and television operations since last year's hacking scandal flared up - have welcomed the move, with News Corporation shares jumping by more 10 per cent since the story first appeared in the Wall Street Journal.
It is expected that the demerger will take a year to undertake after the board of News Corporation formally approves the decision, which will require the assent of investors, probably at a special shareholder meeting.
Media observers note the coincidental timing of the move with the decision by Fairfax Media - once Murdoch's greatest rival in the Australian newspaper market - to radically restructure its own operations. Fairfax announced it will turn all its broadsheet papers into tabloids, erect paywalls to guard the digital content, and sack almost 2,000 staff.