News Corp weighs splitting business into two

MUMBAI: Rupert Murdoch-owned News Corporation plans to split the business into two verticals separating film & television from its publishing business.

Although the final decision has not been taken, it is believed that News Corp chairman Rupert Murdoch, who in the past resisted calls for split in the business, has warmed up to the idea.

The move comes in the background of phone hacking scandal at the company?s UK publishing business which led to the closure of News of the World tabloid and reorganisation of the top level with James Murdoch stepping down from the News International board. 

The scandal, which is being probed by local authorities, prompted News Corp. to abandon plans to increase its shareholding in UK?s BSkyB, in which it holds 39 per cent stake.

UK?s media watchdog Ofcom is also investigating whether James Murdoch, who had to resign from BSkyB board in April, is ?fit and proper? person to hold broadcasting license.

News Corp?s film and entertainment business includes Fox News Channel and Fox Business Network, Star Television, Fox Broadcasting Company, BSkyB and 20th Century Fox. 

The group?s publishing assets include The Wall Street Journal, the Times of London and the Australian newspaper, as well as HarperCollins, the book publishing company which has a joint venture with India Today Group for the Indian market.

The move, if fructifies, will not change Murdoch family?s control of the two businesses. The family exercises effective control over the company through 40 per cent voting stake.

The conglomerate?s outside investors are believed to be in favour of a split more so since television and film assets contribute three-quarters of the $25.34 billion in revenue for the first nine months of the fiscal year.

News Corp.?s chief operating officer Chase Carey, who is believed to be a key proponent of spinning off publishing biz, had in May said that the management and the board had discussed the idea but didn?t have plans to pursue it.