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News Corp. Mulls Splitting Into Two

By Franklin Yu
Epoch Times Staff
Created: June 27, 2012 Last Updated: July 23, 2012
Related articles: Business » Companies
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The company headquarters of News International, publisher of British national newspapers, in east London in this file photo from last year. News Corp., the parent company, is considering splitting itself into two companies: a publishing arm and an entertainment arm. (Ben Stansall/AFP/Getty Images)

The company headquarters of News International, publisher of British national newspapers, in east London in this file photo from last year. News Corp., the parent company, is considering splitting itself into two companies: a publishing arm and an entertainment arm. (Ben Stansall/AFP/Getty Images)

LONDON—News Corp., the media giant controlled by Rupert Murdoch, is mulling splitting itself into two companies, in a strategy, which may lessen concerns of U.K. regulators over the company’s control of the British media industry.

Sources within the New York-based company were quoted in multiple reports—including the News Corp.-owned Wall Street Journal—that the board is looking into dividing the company into an entertainment company and a publishing company.

News Corp. was created by Murdoch, an Australian, from one newspaper he had inherited. A split would separate the publishing side of the business—which includes book publisher HarperCollins, Dow Jones, the New York Daily News, the Times of London, and papers in Australia—from the more lucrative and profitable entertainment side consisting of Fox News and Fox Studios.

Shareholders and analysts have long argued that a split would drive up shareholder value. Analysts also say that splitting the company would not change the company’s current ownership structure and the Murdoch family would retain control of both companies separately.

A Reuters report speculated that current COO Chase Carey would be a leading candidate to run the entertainment business, with Murdoch himself, or one of his children, running the publishing business.

In the U.K., News Corp. is still dealing with the aftermath of the notorious phone-hacking scandal, which occurred at former subsidiary News International. A U.K. committee declared the 81-year-old Murdoch as “not a fit person to exercise the stewardship of a major international company” following an investigation.

The company on Tuesday confirmed the potential split, saying in a statement that the company is “considering a restructuring to separate its business into two distinct publicly traded companies.” Shares of News Corp. traded higher Tuesday following the news of a possible split.

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