Is News Corp About to Split in Two?

News Corp. NWSANWS, the diversified global media company, is considering separating its publishing arm from its entertainment division. According to Dealbook, the move would mean splitting the far larger and more profitable Fox movie studio and television networks from the newspaper business. News Corp. has found itself in the headlines for all the wrong reasons over the past 18 months, as the phone hacking scandal threatened to engulf the company, in the process taking down the News of the World newspaper. Just this month, it emerged that Amalgamated Bank, the Central Laborer's Pension Fund and the New Orleans Employee's Retirement System are all suing the News Corp board for "disregarding" its duties to shareholders and basically covering up the hacking scandal. The News Corp. directors are accused of accepting the idea that the hacking was the work of one rogue reporter, when this is clearly not the case. They are also accused of setting up the Management and Standards Committee to internally investigate phone hacking, when in fact they were conducting more robust investigations. However, the controversy has not stopped the company from working. On June 6, News Corp. and ESPN announced that News Corp. has purchased a 50% equity interest in ESPN Star Sports. "News Corporation's acquisition of the interest of ESS that we did not already own continues the program of simplifying our operating model, consolidating our affiliate ownership structures, and furthers our commitment to delivering incredible sports programming to consumers across the globe, and particularly enhancing our position in emerging markets," said James Murdoch, Deputy Chief Operating Officer and Chairman & CEO International of News Corp. at the time. Two weeks later, on June 19, News Corp. announced a $2 billion deal to acquire Australian pay TV company Consolidated Media Holdings. The company said that, if the deal were approved by regulators, it would "double News Corp.'s stakes in Australia's leading pay television business, Fox Sports Australia and Foxtel, to 100% and 50% respectively. News Corp.'s entertainment business has been doing well, so it is possible that the Murdoch's are looking to distance the scandals that have plagued their publishing business from the television empire. If the split does happen, it will create a publishing business that would include the Wall Street Journal, the Times of London, the New York Post and the HarperCollins book business. On Tuesday morning, News Corp. is trading at about $20, down roughly 0.3%. Follow me @BCallwood.