Should Rupert Murdoch break up his media empire?

The head honcho of News Corp. is considering a major split that would divide the lucrative Fox News and 20th Century Fox from his struggling newspaper business

Rupert Murdoch
(Image credit: Getty Images)

News Corp., the media empire controlled by Rupert Murdoch, confirmed this week that it is considering a plan to split into two companies. Reportedly, one company would comprise Murdoch's publishing business, which includes The Wall Street Journal, New York Post, Britain's The Times of London, and book publisher HarperCollins. A separate (and much bigger) company would house News Corp.'s far more lucrative entertainment units, such as the film studio 20th Century Fox, the Fox television network, and the Fox News cable channel. The divorce would represent a significant reordering of priorities for Murdoch, who started his empire in the 1950s with a single Australian newspaper and has long thought of newspapers as the core of News Corp. Is the break-up a good idea?

Yes. Newspapers are a drag on News Corp.: It's long been said that News Corp. is a "sports and entertainment company with a newspaper problem," says Derek Thompson at The Atlantic. Publishing accounts for only one-tenth of News Corp.'s profits. Furthermore, the newspaper industry is "flat-lining while the entertainment business takes off." News Corp.'s entertainment units "could be valued significantly higher" on the stock market without their print anchor. Newspapers are preventing Murdoch from "unlocking the value in the rest of the company."

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