News Corp. mulling splitting into two entities, sources say

News Corp. is considering splitting into two companies, separating its publishing assets from its entertainment businesses, say people familiar with the situation. The split would carve off News Corp.'s film and television businesses, including 20th Century Fox film studio, Fox broadcast network and Fox News channel from its newspapers, book publishing assets and education businesses.

News Corp.'s publishing assets include The Wall Street Journal, The (London) Times, The Australian newspaper and the Dow Jones Local Media Group, which is the parent company for the Mail Tribune and Ashland Daily Tidings, as well as HarperCollins book publishing. If a separation occurs, the publishing company would be far smaller than the entertainment company.

A final decision on the split has not been made. News Corp. Chairman Rupert Murdoch previously has opposed such a move, which has been discussed internally for several years, say people familiar with the situation. Murdoch recently has warmed to the idea, said one person familiar with the situation.

The idea under consideration is not expected to change the Murdoch family's effective control of any of the businesses, exercised through the family's roughly 40 percent voting stake in News Corp.

Consideration of the restructuring at News Corp. comes after the phone-hacking scandal at the company's British newspaper operations. That scandal has so far resulted in the closure of the News of the World tabloid, the resignation of several senior executives and prompted News Corp. to abandon a bid for shares it does not already own in the U.K. satellite-TV operator British Sky Broadcasting.

A split of News Corp.'s businesses would be welcomed by outside investors who are more interested in News Corp.'s television and film assets than its slow-growing publishing businesses. The entertainment assets make up by far the bulk of the company, contributing three-quarters of the $25.34 billion in revenue for the first nine months of the fiscal year. Those assets accounted for roughly 90 percent of the operating profit in that period.

In the nine months through March, News Corp.'s various segments together had operating profit of $4.2 billion, of which the publishing division contributed $458 million.

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