On June 28 2012, Rupert Murdoch’s News Corporation confirmed it was to split its publishing and media and entertainment businesses into 2 publicly traded entities. On June 28 2013, this move will finally come to fruition.
News Corp. issued a statement earlier today, confirming that its board had greenlighted the split, and both new companies will be led by the current head honcho – Rupert Murdoch.
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However, the News Corporation brand will live on, and will continue to serve as the main publishing company, while 21st Century Fox will be spun off as the entertainment arm.
So why is News Corp. doing this? Here’s a quick recap.
The road to ruin?
July 7, 2011, was a momentous day in the history of Rupert Murdoch’s News Corporation. Why? Well, this was the day the plug was pulled on News International’s (News Corp.’s UK news publishing division) News of the World Sunday tabloid, over the bribery and phone-hacking allegations it couldn’t shake off. It was a pretty sudden and dismal end for the 168-year old publication.
Rupert Murdoch was hardly a popular man before the phone-hacking scandal came along, but he held a lot of power and generally got his way in most matters. When he killed The News of the World, here was a man on the back-foot. The balance of power had shifted.
Thus far, the scandal has pretty much remained on the UK side of the pond. But it was no surprise when we learned last year that News Corporation was considering this split.
It had been obvious for a long time that the damage caused by one UK newspaper could spread throughout his empire, so the need to create two separate entities, distinct from each other, became part of his plan. He didn’t want happenings in one part of his businesses affecting a perfectly healthy and more lucrative element elsewhere.
Welcome to News Corp. 2.0
The ‘new’ News Corp will remain an independent public company, and will still operate the likes of the Wall Street Journal, the Sun and the Times newspapers. 21st Century Fox, on the other hand, will take on Fox News and, of course, 20th Century Fox film studio.
“Today’s announcement is a significant step in creating two independent companies with the world’s leading portfolios of publishing and media and entertainment assets,” said Rupert Murdoch, who will become Chairman and CEO 21st Century Fox, and Executive Chairman of the new News Corporation. “We continue to believe that the separation will unlock the true value of both companies and their distinct assets, enabling investors to benefit from the separate strategic opportunities resulting from more focused management of each division.”
Rupert Murdoch’s sons, James and Lachlan Murdoch, will be on the board of both new companies too.
Feature Image Credit – James Knowler/Getty Images