Rupert Murdoch’s flagship media group News Corporation — facing a backlash from shareholders in the wake of the News of the World phone hacking scandal — was on Tuesday reported to be considering splitting itself into two companies.
Media reports said the group confirmed that it was exploring the creation of “two distinct publicly traded companies” by separating its publishing and broadcasting businesses.
Protective move
According to experts, the move would protect News Corporation’s television operations, such as Sky TV in which it has 39 per cent stake, from its newspaper business — reeling from the fallout of the hacking scandal.
The frustration [of investors] is that Rupert Murdoch has maintained his enthusiasm for newspapers despite abundant evidence that they are in decline, they are not a growth business any longer, and in investment terms that is not where you want to be. The other thing of course that a separation like this does is it attempts to draw a very clear line, produce real blue water if you like, between the infectious potential of News International and the newspapers, and the rest of the business,” media analyst, Steve Hewlett, told the BBC.
The publishing business is expected to be smaller than the new broadcast company, it said.
According to The Wall Street Journal , the Murdoch family – which has 40 per cent of the voting shares in News Corporation – would retain control of both firms.