Rupert Murdoch: News Corp. Split is ‘Logical Next Step in Our Evolution’

NEW YORK: Speaking to analysts this morning about the plan to split News Corporation into two separate entities, one focused on entertainment and one on publishing, Rupert Murdoch said the move marked "the next transformative phase in our history" and was a "logical next step" in the company’s evolution.

The media and entertainment company, which Murdoch will continue to run as chairman and CEO, with Chase Carey as president and COO, will include the broadcast and cable networks, film and TV production studios, local stations and pay-TV platforms. The publishing company—with Murdoch as chairman—will consist of News Corporation’s newspapers and information businesses in the U.S., U.K., and Australia, its book publishing brands, integrated marketing services company, digital education group, and some other assets in Australia. The transaction is expected to take about 12 months to conclude, Murdoch said, and is still subject to board and shareholder approval.

In the conference call with analysts, Murdoch said that "each entity will be better managed and more easily managed." He later added, "The benefits of separation should lead to greater alignment with the different market landscapes and opportunities before each company." Each company, he continued, will have greater flexibility in focusing on their own strategic and operational priorities, allowing them "to more nimbly react to fast-evolving technologies and global market opportunities."

In a memo to News Corp.’s employees about the separation, Murdoch said, "We will wow the world as two, as opposed to merely one…. We have never accepted the status quo. We have always been driven by the belief that we can do better—deliver a better product for our audiences and provide better performing businesses for our shareholders. Our success has come from our speed, flexibility and creativity in responding to changing markets, in combination with our commitment to serving our customers’ needs."

Murdoch also noted that the publishing businesses have been "greatly undervalued by the skeptics. Through this transformation we will unleash their real potential, and be able to better articulate the true value they hold for shareholders."

The memo continues: "On the media and entertainment side, we have a reputation for inspiring and entertaining millions of imaginations every day. We have a history of empowering truly visionary, creative talent to take chances that have redefined the landscape again and again. Today, our creative content businesses have never been stronger. Our distribution assets, globally, are on full throttle. These businesses, at the core of an independent media and entertainment entity, will innovate and grow even faster."

Murdoch goes on to say, "Over the years, I have become accustomed to the noise of critics and naysayers … and pretty thick-skinned! Remember what they said when we started the Fox Network, Sky, Fox News and The Sun? These experiences have made me more resilient. And they should you, as well. And time and time again, we persevered, creating new businesses, new products, telling new stories, informing and educating the public in new ways—and giving jobs to thousands more people. I am extremely excited by this big change. It is a testimony to our entrepreneurial spirit and determination to educate, inspire and entertain millions of families across the globe."