News Corp. board OKs company split
Published: Thursday, June 28, 2012
Updated: Thursday, June 28, 2012 09:06
News Corp.'s board of directors has voted to split up the media empire, separating the conglomerate's newspapers and other publishing assets from its entertainment holdings, according to a person familiar with the situation.
The company was expected to announce the split Thursday. A News Corp. spokesman declined to comment.
Under the plan approved by the board Wednesday evening in New York, the film and television groups _ including the 20th Century Fox film studio, the Fox broadcast network and the Fox News Channel, would form one company.
The second company would comprise News Corp.'s newspapers, its HarperCollins book publishing house and its education businesses. Both companies would be publicly traded.
Wall Street has agitated for years for News Corp. to shed its newspaper holdings, which include the Wall Street Journal, New York Post, Times of London, British Sun tabloid and other papers in Australia. Once cash cows, newspapers have fallen on hard times as readers and advertisers turned to online sites.
The breakup of the company represents a major shift for founder Rupert Murdoch, who built the $54 billion global powerhouse from a single Australian newspaper he inherited from his father. In recent years, Murdoch had adamantly opposed any plans that would have separated the publishing group from its TV and film operations.
But the newspapers became a liability for News Corp. in the wake of a phone hacking scandal in Britain. Revelations that reporters working for Murdoch's London papers hacked voice-mail messages left for sports figures, politicians and even a 13-year-old murdered schoolgirl rocked the British political establishment and the company.
News Corp. was forced to close its News of the World tabloid, which was at the center of the ethics crisis, and abandon a $12 billion bid to acquire full control of Britain's largest pay-television provider, British Sky Broadcasting.
News of the potential reorganization, which broke Tuesday in the Wall Street Journal, drove News Corp.'s stock price up 11 percent.