News Corp has confirmed the heavily rumoured plan to split Rupert Murdoch's empire in two, with the company's publishing wing parting ways with the broadcasting and entertainment division. It also means Murdoch is further distancing himself from his beloved newspaper biz.
The media multinational, which has been knee-deep in scandal following revelations of phone-hacking at the now-defunct News of the World Sunday tabloid, is separating its brands presumably to help Murdoch recover from the "toxic" fallout surrounding the erstwhile 168-year-old redtop.
"There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corporation's businesses to grow to new heights, and enable each company and its divisions to recognise their full potential – and unlock even greater long-term shareholder value," CEO and chairman Murdoch said.
If the divorce gets the go-ahead from News Corp's board, Murdoch would remain as chairman of both "distinct publicly traded companies," but he will only serve as CEO on the television broadcasting and entertainment side of the house.
Murdoch said that the plan was needed because News Corp's "collection of assets have become increasingly complex".
He added: "We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe. I am 100 per cent committed to the future of both the publishing and media and entertainment businesses".
Under the split, a publishing company would be created comprising of News Corp's newspapers and "information businesses" in the US, UK and Australia. Its book publishing brands, marketing services outfit, digital education group and any other assets in Oz will also be pushed into the publishing side of the family.
A separate media and entertainment company would then be set up to scoop up Murdoch's broadcast and worldwide cable networks, film and TV production studios, television stations and pay-TV ventures and assets in Europe and India.
In Britain, News Corp owns 39 per cent of BSkyB. Murdoch failed to buy the remaining chunk of BSkyB last year during the height of the phone-hacking scandal.
That bid ended only after the government - under huge political pressure from Parliament - eventually intervened to stop News Corp acquiring BSkyB outright.
It's fair to surmise that Murdoch - as BSkyB's largest minority shareholder - could make another play for the company, even as UK regulator Ofcom mulls over the future of its broadcasting licence in Blighty.
When News Corp was forced to turn its back on a merger with BSkyB in July 2011, it was clear that the company could return to the table with another offer down the line.
In its regulatory filing ending the bid, Murdoch's company left some legal wiggle room by stating:
News Corp reserves the right to announce an offer or possible offer or make or participate in an offer or possible offer for BSkyB and/or take any other action which would otherwise be restricted under Rule 2.8 of the City Code within the next six months.
When questioned by The Register, BSkyB declined to comment on our conjecture about any second attempt from Murdoch to buy the company outright following News Corp's divorce.
It is clear, however, that Murdoch is now laser-focused on his television and entertainment empire. His son, James - who had overseen News International's turbulent phone-hacking scandal before fleeing to New York earlier this year - is also working in his dad's telly business.
News Corp failed to mention who would be in charge of any newly formed publishing company in its press release announcing the split.
It added that "Chase Carey would serve as president and COO of the media and entertainment company. Over the next several months, the company will assemble management teams and Boards of Directors for both businesses."
In the meantime, Murdoch's newspaper empire is left somewhat flapping in the wind.
Meanwhile, the Independent Police Complaints Commission is probing the conduct of Deputy Chief Constable Craig Denholm of Surrey Police force, relating to allegations that he was aware that murdered schoolgirl Milly Dowler's mobile phone had been illegally accessed by people working at the News of the World in 2002.
The IPCC said in a statement:
Mr Denholm was a Detective Chief Superintendent and the senior investigating officer for part of Operation Ruby, the Surrey Police investigation into the abduction and murder of Milly Dowler in 2002. The IPCC investigation is considering whether Mr Denholm was aware during Operation Ruby that the NOTW had accessed Milly Dowler’s voicemail in 2002 and his handling of that information.
A referral was also received from Surrey Police on Thursday, 21 June in relation to the conduct of temporary Detective Superintendent Maria Woodall who was a Detective Chief Inspector and the senior investigating officer on Operation Ruby from 2006 onwards. The IPCC investigation is examining the information she provided to Surrey Police during the course of the internal inquiry into the force response to allegations that Milly Dowler’s voicemail had been illegally accessed in 2002.
Murdoch described the behaviour exhibited by the NotW toward the Dowler family as "abhorrent".
News Corp agreed to pay £2m to the Dowler family in October last year. Murdoch recently declared regrets about not having closed down his Sunday tabloid many years ago. ®