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MUMBAI: Rupert Murdoch-controlled News Corporation has decided
to split its business into two entities separating its film
& television business from the publishing business.
While
most shareholders see the UK newspaper assets as a liability,
Murdoch wants them.
Investors
had every reason to cheer as the film and television vertical
contributes about 75 per cent of the company's revenue overall
while the publishing business was a drag on the conglomerates
bottom line. News Corp's film and television business includes
Fox News Channel and Fox Business Network, Star Television,
Fox Broadcasting Company, BSkyB and 20th Century Fox.
Publishing, including The Wall Street Journal, the Times of
London, New York Post and Australian newspaper, accounts for
about 18 per cent of News Corp's operating income.
“News
Corporation confirmed today that it is considering a restructuring
to separate its business into two distinct publicly traded
companies,” the company said in a brief statement without
specifying any details.
The
announcement was hailed by investors with the company’s
stock rising up 8.3 percent, to close at $21.76 Tuesday. During
the day, the stock reached $21.89, its best performance in
more than four and a half years.
Business
fundamentals apart, the Rupert Murdoch owned media and entertainment
conglomerate was also concerned about the wider implications
of the phone hacking scandal at the UK publishing subsidiary.
The
scandal had already led to the closure of News of the World
besides, forcing News Corp to abort its takeover of profitable
pay TV business BSkyB, where it holds 39 per cent ownership.
British
communications regulator Ofcom is in final stages of its review
of whether News Corp deputy COO is "fit and proper"
to hold a broadcast license.
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