In a follow-up to its recent decision to split into two separate publicly traded entities, News Corporation (NWSA) named Robert Thomson, Editor-in-Chief of Dow Jones and managing Editor of The Wall Street Journal, as the new CEO of its publishing company.
News Corporation hit the headlines in June, when it proclaimed its decision to split into two separate publicly traded publishing and media and entertainment entities. There has been immense pressure from shareholders to divest the publishing arm, which has been grappling with lower operating profit compared with the entertainment unit.
The Publishing Company (to be known as News Corporation) will comprise publishing businesses, education unit and the integrated marketing services business. On the other hand, Entertainment Company (to be named as Fox group) will encompass cable and television assets, filmed entertainment, and direct satellite broadcasting businesses.
The company announced Rupert Murdoch as the Chairman of the publishing entity as well as the Chairman and CEO of the entertainment company. Alongside, the company named Chase Carey as the president and COO of the new entertainment company, while James Murdoch will continue as the deputy COO.
The split is expected to augur well for News Corporation, which has been in troubled waters since the revelation of the phone hacking scandal that eventually led to the closure of the publication of ‘The News of the World’. Moreover, the company was held back from acquiring the remaining 61% stake in the British Sky Broadcasting Group.
Currently, we have a long-term ‘Neutral’ recommendation on the stock. Moreover, News Corporation, which competes with Time Warner Inc. (TWX), holds a Zacks #3 Rank that translates into a short-term ‘Hold’ rating.
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