September 26, 2020

News Corporation Board Approves Split of Company

The company is expected to complete its separation on June 28, with publishing assets like The Wall Street Journal, The New York Post and HarperCollins, and a handful of Australian pay television units, forming a company that will retain the name News Corporation.

Fox Broadcasting, Fox News, FX and the Hollywood film and television studio will form an entertainment company to be called 21st Century Fox.

Rupert Murdoch, chairman and chief executive of News Corporation, called the board’s approval of the split a “significant step in creating two independent companies with the world’s leading portfolios of publishing and media and entertainment assets.”

The announcement may do little to dispel criticism that the News Corporation board is too heavily made up of members of the Murdoch family. After the division Mr. Murdoch will serve as chairman of both companies. He will maintain his role as chief executive of 21st Century Fox. Mr. Murdoch’s two sons, James and Lachlan, will be directors of both companies.

But the boards will also include new faces. Robert Thomson, as chief executive of the new News Corporation, will join the publishing company’s board, as will Ana Paula Pessoa, a partner at the public relations firm Brunswick Group; Masroor Siddiqui, managing partner of the investment firm Naya Management; and John Elkann, chairman of Fiat. Joel I. Klein, chief executive of News Corporation’s fledgling Amplify education division, will maintain a role on the company’s board.

Chase Carey, president and chief operating officer of 21st Century Fox, will join several new directors — Delphine Arnault, a French businesswoman and deputy general manager at Christian Dior Couture; Jacques Nasser, a former chief executive of the Ford Motor Company; and Robert S. Silberman, executive chairman of Strayer Education Incorporated — on the entertainment company’s board.

“New blood is always a good thing for a company as it tries to overcome” scandals like the phone hacking crisis in Britain that News Corporation has gone through, said Laura Campos, director of shareholder activities at the Nathan Cummings Foundation, a charitable organization and institutional investor that owns 3,686 shares of News Corporation’s Class B voting shares.

But, Ms. Campos added, “We’re anxious to see how these directors will demonstrate their commitment to all the News Corporation shareholders and not just the Murdoch family.”

News Corporation also said on Friday that it expected to report at least a $1.2 billion pretax, noncash impairment charge related to its publishing division this quarter.

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