News Corp heading for a split, sources claim

Media conglomerate News Corp is weighing up whether or not to split itself into two companies by dividing its publishing and entertainment businesses, The Wall Street Journal (WSJ) has reported.

According to people familiar with the situation, the WSJ, which itself is part of News Corp, says that the entertainment company (which includes Fox broadcast network and Fox News) would be significantly larger than the publishing company, which includes all of its newspapers and its education businesses.

No decision is said to have been made, although Chairman Rupert Murdoch is believed to have recently lent his support to the plan, having previously opposed it.

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Such a move is said to be popular amongst outside investors, who are more interested in the entertainment side of News Corp, given its fast-growing nature.

The entertainment business contributed to around 90% of the company's operating profit in the first nine months of the last fiscal year, and brought in three-quarters of the revenue.

Speaking in May, Chase Carey, the Chief Operating Officer of the group, said in an investor call that while he was aware such a split was favoured by some shareholders and the idea had been discussed, there were currently no plans to pursue it.

If the business were split, Murdoch would retain his family's stake in the business, which currently stands at around 40%.

NR