Friday 20 October 2017

News Corporation 'could split in two' separating publishing arm from entertainment

News Corp could split itself into two companies, separating its publishing arm from its entertainment business, according to reports.

The move would see the company's film and television firms, which include 20th Century Fox and Fox News, hived off from the newspaper and book publishing unit, according to the Wall Street Journal.

News Corp publishes the WSJ and The Times as well as owning the publisher Harper Collins.

Chairman Rupert Murdoch is thought to have previously been against the idea of carving up the company, but has recently changed his mind. A final decision on the split has not yet been made.

It is believed the plan would not alter the Murdoch family's control of News Corp.

The possible restructuring comes amid the fallout from the phone hacking scandal in News Corp's British newspapers, which led to the closure of the News of the World and the abandonment of a bid for the rest of BSkyB that the company doesn't own.

If a split were to happen, the publishing division would be a far smaller entity than the entertainment arm. The latter makes up three-quarters of the $25.34bn in revenue for the first nine months of the fiscal year. Those assets accounted for about 90pc of the operating profit in that period.

In the nine months through March, News Corp as a whole saw operating profits of $4.2bn, of which the publishing division contributed $458m.

Chase Carey, News Corp's chief operating officer, said in May that he was aware some shareholders favoured move to spin off the newspaper assets. He added that management and the board had discussed the idea but didn't have plans to pursue it.

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