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News Corp. Considering Splitting Off Film and TV Businesses

26 Jun, 2012 By: Erik Gruenwedel

News Corp. said it is contemplating dividing into two separate publicly traded companies, with one focusing on film and television and other on publishing.

The possible separation, which was first reported by The Wall Street Journal, citing sources familiar with the situation, was confirmed June 26 by News Corp. in a statement. The WSJ is owned by News Corp.

Australian-based News Corp. would diverge the 20th Century Fox film studio, Fox broadcast network and Fox News channel from its publishing portfolio, which also includes Dow Jones Co., The Times of London and HarperCollins book publishing, among other properties.

The film studio includes 20th Century Fox Home Entertainment.

The move would be similar to what Viacom did with CBS in 2006, spinning off the network into a freestanding media company (film, TV, publishing, billboards, cable, etc.) headed by CEO Les Moonves under the auspices of Sumner Redstone.

Any split would keep News Corp. founder and chairman Rupert Murdoch firmly in control of both companies, according to The WSJ.  

The division, which has been under discussion internally for years, comes as News Corp. deals with the ongoing fallout from the phone-hacking scandal at its London-based newspaper division. The publishing business, which is where Murdoch started his career, generated $458 million in operating income on $6.2 billion in revenue during News Corp.’s most recent fiscal period (ended March 31).

Print has been a source of investor concern, specifically how the ongoing transition to digital media affects consumer and advertising behavior.

Filmed entertainment reported operating income of more than $1 billion on $5.5 billion in revenue.

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