by Christopher Freeburn | June 26, 2012 9:42 am
Media mogul Rupert Murdoch is mulling the division of his global media giant News Corp. (NASDAQ:NWSA) into two separate companies.
According to unnamed sources, the plan involves separating the company’s publishing operations from its entertainment business, The Wall Street Journal, itself owned by News Corp., reports. The story sent News Corp. shares up more than 5% in early Tuesday trading.
Under the potential split, News Corp.’s book and newspaper business would be run by one company, while TV and movies would be handled by another.
The company owns a string of prominent newspapers and publishing houses, including the New York Post and The Sun. Murdoch’s newspaper empire in the U.K. came under scrutiny after allegations emerged that reporters at his London newspapers illegally accessed voice mail accounts of subjects they were reporting on, including crime victims.
The scandal led Murdoch to abruptly shut down the News of the World last year. Its former chief is now facing prosecution.
While Murdoch has previously resisted the idea of dividing the company, its publishing business is less profitable than its entertainment units.
In fact, News Corp.’s movie studios and TV channels produced roughly three-fourths of the company’s revenues, and about 90% of operating profits, during the first nine months of the fiscal year.
Under any division, however, the Murdoch family would retain its control over 40% of voting shares. No decision has yet been made regarding a split, the Journal notes.
Source URL: https://investorplace.com/2012/06/is-murdoch-preparing-to-divide-news-corp/
Short URL: http://invstplc.com/1nAftCH
Copyright ©2017 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.