News Corp split will see cash boost for publishing arm
News Corp has unveiled details of how it plans to split into two separate publishing and entertainment companies – News Corp and Fox Group. In an SEC filing at the end of last week, the company revelaed that it would give the balance sheet of the new News Corp publishing company a cash boost of US$1.8 billion (€1.4 billion), giving it a solid financial basis in lieu of support from the more profitable film and television arm.
In addition to newspapers and books, News Corp will also hold News Corp’s stake in Fox Sports Australia and Australian pay TV group Foxtel.
“The new News Corporation’s strong balance sheet will provide the Company with full financial flexibility to pursue its strategic agenda, which is to further develop and expand the power of its market-leading brands over a myriad of platforms,” said Rupert Murdoch, chairman and CEO of News Corp. “We believe the new News Corporation’s strong balance sheet, along with its diversified revenue base, will be key competitive assets that will allow the company to lead in innovation and the creation of long term shareholder value.”
Separately, James Murdoch is expected to be appointed to the board of Sky Deutschland as a non-executive director at the German pay TV company’s shareholder meeting next month in what as being seen as the next stage in his rehabiliation following critcism of his role in the UK phone-tapping scandal. News Corp increased its stake in the German pay TV business in January, taking a majority stake for the first time.