Last week, News Corp. confirmed that it has officially planned to split into two separate, publically traded companies. The move would divide the corporation’s television and film assets from its other faculties, including its publishing entities.
“We’ve come a long way in our journey that began almost 60 years ago with a single newspaper operating out of Adelaide,” chairman Rupert Murdoch said at a teleconference in Australia on June 28. “I’m convinced that each of these new companies would have the potential to continue that journey and prosper as independent entities long into the future.”
Under the arrangement, 20th Century Fox, Fox Broadcasting (along with its cable outlets), Sky Broadcasting, and other entertainment entities would comprise one of the new media companies. Its worldwide news and publishing properties, including the Wall Street Journal, the Times of London, and HarperCollins would be central components of the second company.
After an early bump in its stock price shortly after the deal was announced, details of the arrangement are causing some to express concern about the publishing side of the future split. Before, losses at News Corp.’s newspapers could be offset by the company’s lucrative entertainment and television operations. Now, as components making up a larger portion of a smaller company dedicated to publishing, the papers are expected to see downsizing.
While it is too early to speculate on the specifics of the newspapers’ respective futures, it is clear that changes will be on the horizon as they prepare to function now without the financial cushion of highly profitable companies in other media industries.