News Corp Chief Rupert Murdoch is driven away from the High Court in central… (Justin Tallis / AFP / Getty…)
Rupert Murdoch's News Corp. has long been a company divided.
The media monolith's financial foundation rests on profits from television channels, satellite TV operations, and a movie and television production unit. But Murdoch -- the company's chief executive, who got his start in newspapers in his native Australia -- has long had a soft spot for publishing, a soft spot not generally shared by Wall Street.
On Tuesday, News Corp. confirmed that it was "considering a restructuring to separate its business into two distinct publicly traded companies."
The Wall Street Journal, part of Murdoch's publishing empire, broke the news that the company plans to split its businesses into two parts.
The split would separate News Corp.'s film and television operations, including the 20th Century Fox film studio, the top-ranked Fox broadcast network and the profitable Fox News Channel, into one company. The corporation's newspapers, Harper Collins book publishing assets and education businesses would form the second company.
News Corp.'s publishing properties include the Journal, the New York Post, the Times of London, the British Sun tabloid and papers in Australia. The publishing company would be the smaller of the two.
The move would likely mollify Wall Street investors, who have long grumbled about Murdoch's purchase of the Wall Street Journal at an inflated price and Murdoch's adamant stance that newspapers were, and should be, a core part of News Corp.
But during the last year, the company has been roiled by an ethics scandal within its British newspaper arm, which has led to Murdoch's youngest son, James, being distanced from decision-making in the corporation, the arrests of numerous former News Corp. employees, the shuttering of the hugely popular News of the World tabloid, and about $200 million in losses.
The Journal reported that the concept being considered would not change the Murdoch family's effective control of any of the businesses, exercised through their roughly 40% voting stake in News Corp. Six years ago, media mogul Sumner Redstone did something similar by dividing his Viacom Inc. into two publicly traded companies: Viacom and CBS Corp. Redstone, 89, controls both.
The move might also give Murdoch the ability to more easily snap up ailing newspaper properties. Murdoch once considered buying the Los Angeles Times, whose corporate parent Tribune Company, has been mired in bankruptcy proceedings for more than three years. Murdoch gave up on the notion following Wall Street's negative reaction to his purchase of the Wall Street Journal.
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