Both the Daily Telegraph and the Financial Times newspapers have reported that executives at Rupert Murdoch’s News Corporation are making plans about how to split off the company’s British newspapers in the wake of the phone hacking scandal. While The Sun, The Times of London and The Sunday Times make up less than 3 percent of the company’s $33.4 billion revenues, the ongoing investigation into the scandal has disproportionately damaged the company’s reputation.
News Corp. is said to be in the very early stages of creating a trust to manage its newspaper assets; of pursuing a joint venture with a media partner; or simply selling the papers to private equity.
A News International spokesperson emphasized that “There are absolutely no plans to put News International into a separate trust.”
The Daily Telegraph notes that one reason News Corp. is interested in letting go of its troubled newspaper arm is so it can restart its bid to control broadcasting company BSkyBMedia. News Corp. was on the verge of making a bid to take over BSkyB around the time it was revealed that staff at its News of the World tabloid had hacked into the voicemail of a murdered 13-year-old, Milly Dowler, before her body was found. Murdoch closed the 168-year paper last July and the scandal has dogged the company ever since, though News Corp.’s profits do not seem to have been affected.
Murdoch, News Corp.’s chief who began his media career in the newspaper business in Australia, has made it clear that he has no intentions of letting go of the three British newspapers. As he said in a statement:
News Corporation remains firmly committed to our publishing businesses, including News International, and any suggestion to the contrary is wholly inaccurate. Publishing is a core component of our future.
Murdoch has been mum on his Twitter feed (he has not posted since May 14, as of this posting) about the possible spinning off of the three papers.
According to the Daily Telegraph, News Corp. Chief Operating Officer Chase Carey has “already acknowledged the company would be worth more if it did not own News International.”
Related Care2 Coverage
Photo by crescrowel