News Corp’s board authorised its management to go ahead with the separation following a board meeting yesterday (27 June).
The move means businesses such as News International, the Wall Street Journal and book publisher HarperCollins will soon be operated separately from News Corp’s Fox television network and movie studio arm as well as its 39% stake in BSkyB.
News Corp says the split will help focus on the distinct strategic and industry-specific opportunities of each business to maximise their long-term potential.
The entertainment arm is set to “build on its deep heritage” in developing premium content for distribution “on screens of all sizes”, News Corp says.
It will also benefit from the rapidly-growing and high margin cable network and pay-TV assets and distribution from its global businesses across North and South America, Europe and Asia.
News Corp says the new global publishing company “would have the opportunity to leverage its trusted brands for innovation and value creation across all traditional and digital platforms”.
Rupert Murdoch is set to serve as chairman of both companies and CEO of the entertainment company. Chase Carey will become president and COO of the entertainment company. More leadership roles are set to be announced in the coming months.
The separation is expected to complete in a year, subject to board and shareholder approval. It will also be subject to regulatory approval from bodies such as the US Securities and Exchange Commission.