On Thursday, News Corp. (NASDAQ: NWSA) (NASDAQ:NWS) confirmed its plans to split into two companies with one as entertainment operations and the second one encompassing its publishing business.
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The entertainment businesses include 20th Century Fox, Fox broadcast network and Fox News Channel while the publishing assets encompass The Wall Street Journal, the Times of London, HarperCollins book publishing and News Corp.’s education business, reported the Wall Street Journal.
The plan had been unanimously approved by News Corp.’s board.
In a statement by News Corp.’s chairman and chief executive Rupert Murdoch, he said, “We recognize that over the years, News Corporation’s broad collection of assets have become increasingly complex. 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.”
Murdoch will oversee the entertainment business as chairman and CEO while chief operating officer Chase Carey will take over the reins at the publishing arm with Murdoch as its chairman. There was no news who would have the CEO title.
Look for additional changes to follow as the company said, “Over the next several months, the company will assemble management teams and boards of directors for both businesses.”
After the announcement, the company held a conference call. Murdoch said for the publishing company he sees it having a “robust net cash position” in order to make “the right investments” while the entertainment side will continue expanding as “we’ll be interested in growing everything.”
Various sources at different branches of NewCorp have expressed no fear of layoffs.
In addition to publicly announcing the news, News Corp. also sent out an internal memo to employees on Thursday. Here’s a copy of it.
Highlights from the memo include the following:
“Our publishing businesses are 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. Our aim is to create the most ambitious, well-capitalized and highly motivated publishing company in the world, consisting of the largest collection of our news and publishing brands, as well as our groundbreaking digital education group; we will also work to create the world’s top media and entertainment company, encompassing our premier broadcast and cable networks, leading film and television production studios and highly successful pay-tv businesses.”
“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.”
“I will personally be leading the creation of our new companies and will serve as Chairman of both organizations and as CEO of the media and entertainment company. Chase Carey will continue to partner with me on leading the media and entertainment business, by serving as President and COO. We are busy working on other important details and will inform you as they become available.”
News Corp. is down 1.55 percent to $21.96.