UK Markets close in 7 hrs 13 mins

News Corp Confirms It Will Split In Two

(c) Sky News 2012

Rupert Murdoch has said he would be reluctant to invest in Britain and that Europe (Chicago Options: ^REURUSD - news) is in for a "long, tough haul", as he confirmed his intention to split News Corporation (NasdaqGS: NWS - news) in two.

The move would divide the business into separate publishing and entertainment operations, insulating the company's TV and film interests from its newspaper and book publishing divisions.

In a conference call with analysts, Mr Murdoch said it was "an exciting day at News Corporation, and one of great pride for me personally, as we move towards the next transformative phase of our history".

Under the initial plans, which will take around 12 months to complete, Mr Murdoch would remain chairman of both new companies, but chief executive of the entertainment operation alone, meaning for the first time in almost 60 years, he will have no executive role in his newspaper business.

He has previously resisted calls to move away from the company's newspaper origins, and said the decision was the culmination of more than three years of reviews by their management, but admitted it had not been easy.

He said: "I've spent my life at this, it's a very big move and a very big decision for me to say we would go forward with this."

But he denied that decision was influenced by the hacking scandal and subsequent closure of the News Of The World, or the ongoing criminal investigation into alleged payments to public officials.

He told analysts: "We’re not doing this in any sense as a reaction to anything in the UK or Australia or anywhere else. We think this is the right thing for the company going forward.

"It is not a reaction to anything in Britain."

But he said he was pessimistic about the country's economic outlook.

Asked by Fox Business whether he was still interested in pursuing a bid for BSkyB (LSE: BSY.L - news) , he replied: "No, I think we’ve moved on in our own thinking from that. There were billions and billions of dollars - Britain didn’t want it - we’ve got good places to put them here.

"I’m much more bullish about America than I am about England."

He continued: "I would be a lot more reluctant to invest in new things in Britain today than I would be here."

"As a result of what you went through?" he was asked.

"No, not at all, just the English," he replied.

"It has everything to do with the Euro. I think Europe’s in for a very long, tough haul, and semi-recession, if not real recession."

He was asked why he was so confident that the publishing business could prosper when global newspaper advertising revenues are in decline.

The answer, he said, was one word: "Digital (Milan: DIB.MI - news) ."

"People aren’t buying pure papers printed on crushed wood the same, but they are equally getting their news in many other forms.

"I took a strong lead on this and said people will pay for news - that it is the most valuable commodity in the world - and as the world gets more complicated people need to know what’s going on."

There had been speculation that Mr Murdoch’s eldest son, Lachlan, might head up the new publishing operation and follow in his father’s newsprint-marked steps - Mr Murdoch senior’s father was a great newspaper man before him.

But the News Corporation chairman was dismissive of the prospect.

Asked whether any of his children would be given expanded roles in the new businesses, he said: "Well, they have to earn it, and they have to want it.

"Lachlan is very happy running his own businesses in Australia and loves living there, so we’ll see."

"So, he wouldn’t take over the publishing?” he was asked.

"I think that’s highly unlikely," he replied.

Mr Murdoch said the split was 'not a fait accomplait' and there were many steps yet to take, but if the company does divide along the proposed lines, and none of his children take on the senior role in the publishing operation, it will be the first time in six decades that there has not been a Murdoch in direct control of their newspaper business.