News Corp split seen as positive for BSkyB

Following News Corp's confirmation that it would split itself into two on Thursday, rumours of a revived bid for British Sky Broadcasting (BSkyB) resurfaced.

Rupert Murdoch's media empire will separate its entertainment and publishing businesses into two publicly listed companies.

News Corp owns a 39% interest in BSkyB, the satellite broadcaster which it failed to take over last year. It will now form part of the entertainment group, together with 20th Century Fox, the Fox network, Fox news and Sky Italia.

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Ian Whittaker from Liberum Capital said that a split "suggests [News Corp] may even have another tilt at Sky in the medium term".

Analysts at Deutsche Bank have said that BSkyB could also benefit from the split as it would distance the company from the phone-hacking scandal that took down News International's The News of the World last year.

They said that the split would lower the risk of an investigation into whether or not the Murdoch family is a 'fit and proper' broadcast licence holder.

However there are some that claim that the split has done nothing to quash these concerns and is merely cosmetic, as the Murdochs will still maintain the same interests in each companies.

If regulators do indeed force News Corp to sell its stake in BSkyB, then it would likely attract interest from other Pay-TV groups.

BC