News Corporation confirms split
28 June 2012
News Corporation has confirmed that it will spin off its entertainment group and publishing group into two separate companies.
Company chairman Rupert Murdoch will be the chairman of both companies and chief executive of the entertainment group but a chief executive for the publishing company is yet to be named.
The publishing company will include News Corporation’s newspapers and information businesses in the US, the UK and Australia, the company’s book publishing brands, its marketing services company, digital education group and other assets in Australia.
The entertainment company will be formed of its broadcast and worldwide cable networks, film and television studios, television stations and its pay-TV businesses in Europe and India.
"There is much work to be done, but our Board and I believe that this new corporate structure we are pursuing would accelerate News Corporation's businesses to grow to new heights, and enable each company and its divisions to recognize their full potential,” says Murdoch. “We recognize that over the years, News Corporation's broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities.”
Murdoch added that he was “100% committed” to both the publishing and entertainment businesses. The process of spinning off the company’s publishing assets is expected to take a year.
Reports stated yesterday that the split was on the table and it is a move that investors have wanted for several years. The fallout from the phone hacking scandal that hit the company’s UK-based newspapers and prevented a take over of BSkyB has proved a significant incentive to separate out the two parts of the business.
James Murdoch stepped down as BSkyB chairman in April and News International chairman in February following the hacking scandal. He is currently News Corporation’s deputy chief operating officer.
David Hing, London