NPR

Murdoch Splits Media Empire Into Two Companies

News Corp announced on Monday that it's making some changes to its management and structure. The company has decided to end The Daily, its tablet-exclusive newspaper. They have also named the management team for its split off newspaper division. David Folkenflik talks to Audie Cornish.

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Transcript

AUDIE CORNISH, HOST:

Rupert Murdoch made it official today, announcing details of how he's splitting News Corp into two parts. On one side, a publishing division for his newspaper, book, and Australian TV properties; it will include the Wall Street Journal and the New York Post. On the other side, something called Fox Group, with the company's TV and entertainment properties, including Fox News and Fox Studios. Murdoch also announced today who will lead these organizations.

NPR's media correspondent David Folkenflik joins us now. And first of all, David, what's the reasoning behind the split?

DAVID FOLKENFLIK, BYLINE: Well, there are a lot of careers and a lot of fortunes being made and broken with an announcement this big. It happens against the backdrop, of course, of the taint in the legal and financial implications of that phone hacking scandal we've been talking about over the last 15 months or so, over in England, the U.K.

The company has taken a hit of hundreds of millions of dollars and they're still counting. And they want to get the newspapers away from the rest of the very profitable elements of the company to sort of isolate that and quarantine it. It also will make shareholders happy. For years, they've agitated, many of them, to say why are we being dragged down by newspapers and the publishing divisions when in the last five, seven years or so the implications of the industry looks so bleak?

And thirdly, Rupert Murdoch himself, the octogenarian leader of this company, the driving engine, really loves newspapers. It's his first love. It remains so. He wants to figure out a way they can survive and this, he thinks, is the way to do it.

CORNISH: And as you mentioned, those papers have been having a tough time. So what are their prospects under this new structure?

FOLKENFLIK: Well, the hope is, Mr. Murdoch seems buoyant. He thinks it's going to be a more focused company based on this and publishing and some other things. You know, you look at today's announcement included, among things, the company is going to kill The Daily, which was a tablet iPad-only publication representing a digital future.

They said this was a bold experiment. They couldn't afford it. And there have been fears that Mr. Murdoch and his executives might shut down the New York Post. That doesn't appear likely to happen in the immediate future. People in England are also concerned about some of their papers there. There are questions about the paywalls, very severe at the Times of London and at the Sunday Times over whether or not readers can get access without paying. They have to do it now.

A lot of concerns. He says by focusing we can accomplish these things. We're going to endow it with a certain amount of money. We're going to give this new company, called again Newscorp, Australian television properties to help continue a flow of revenues and profits.

They're feeling buoyant. You know, Murdoch's people have even expressed interest in going and trying to buy the Los Angeles Times and even perhaps the Chicago Tribune, showing that they're displaying publicly, anyway, a more jaunty step for print journalism.

CORNISH: And you mentioned careers made and broken. Who will be leading these organizations?

FOLKENFLIK: Well, a close confidante of Mr. Murdoch, a guy named Robert Thompson - he's currently the managing editor of the Wall Street Journal, also the editor-in-chief of Dow Jones - he will rise to lead this new Newscorp. His deputy is a guy named Gerry Baker. He'll be taking over the Wall Street Journal. A very different figure, in some ways. A Brit who was the Washington bureau chief for the Times of London, a sister Murdoch publication.

But really known as a columnist in some ways, a conservative voice who's expressed a lot of skepticism of the liberal bias that he's found in newsrooms, including on occasion his own at the Wall Street Journal. The chairman of both companies, both the CEO of Fox Group, will be Rupert Murdoch. He's going to lead these two companies into the future but Mr. Thompson will be his top deputy there.

So Murdoch essentially is splitting these companies into two and yet leading both, he thinks, into more profitable futures. He tries to protect the newspapers but allow the more profitable entertainment and TV properties to prosper.

CORNISH: That's NPR's media correspondent David Folkenflik. David, thank you.

FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.

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