Split won’t weaken Murdoch’s tight control of News Corp

RUPERT Murdoch showed no signs of relinquishing control of News Corporation yesterday after confirming plans to split the company into two divisions and installing himself as chairman of both.

The company expects to complete its separation into two publicly traded companies within a year after confirming its board had given its go-ahead.

The move will see the group’s film and television interests, including 20th Century Fox and its 39 per cent stake in satellite broadcaster BSkyB, operating under a new media and entertainment business, while its newspaper operations will become part of a new publishing company.

News Corp dropped its bid to buy the remaining 61 per cent of BSkyB last year after the phone-hacking scandal led to the closure of the News of the World.

Murdoch will serve as chairman of both companies and chief executive of the media and entertainment company, although the group did not name an executive to lead the publishing business, which will be the smaller of the two. News Corp chief operating officer Chase Carey will remain in that role in the entertainment business.

In the year to June 2011, the entertainment assets generated revenues of $23.5 billion (£15bn), compared with $8.8bn for the publishing business, which includes the Sun, the Times and book publisher HarperCollins.

News Corp will hold a special shareholder meeting next year and expects the process to be completed in about a year.

Murdoch said the group had become “increasingly complex” and its new structure would give each company “greater financial and operational flexibility”.

He added: “There is much work to be done, but our board and I believe [in] this new corporate structure.”