Rupert Murdoch’s News Corporation (NasdaqGS: NWS - news) is preparing to split on December 31, as it attempts to limit the damage of the News of the World phone hacking scandal on the rest of the media empire, the Daily Telegraph can reveal.
Robert Thomson, managing editor of the Wall Street Journal and editor in chief of Dow Jones (DJI: ^DJI - news) , is expected to be named chief executive of the publishing division , which will be separated off in the carve up.
News Corp said in June that it would separate its troubled newspaper and book publishing assets from its more valuable film and television businesses , which generate 74pc of its $33.4bn a year revenues and 90pc of its profits.
At the time, Mr Murdoch said he hoped to complete the process within 12 months but that he had been advised by his finance and legal times that it could take longer. However, the businesses will be separated much sooner than expected, in a move that is set to please investors.
Mr Murdoch will retain his iron grip on the empire, by becoming chairman of both operations and chief executive of the entertainment arm, whose assets range from Fox Television and a 39pc stake in BSkyB (LSE: BSY.L - news) to Twentieth Century Fox film studios.
However, the question of who would lead the beleaguered publishing division had remained open until Mr Murdoch alighted on Mr Thomson, a former editor of the Times .
The two men share a deep love of newspapers something that some of the other contenders for the title lacked but this is not all they have in common. Both Mr Murdoch and Mr Thomson come from Australia, share the same birthday and have Chinese wives. Mr Thomson was the only non-family member from News Corp to attend the baptism of Mr Murdoch’s youngest daughters in the river Jordan, whilst Mr Thomson made Mr Murdoch godfather to his two sons.
“Robert is part of Rupert’s inner circle. He is fond of Robert in the same way he was of Rebekah Brooks [the former News International chief executive], whom he regarded as some kind of surrogate daughter,” a source told The Daily Telegraph .
More importantly for News Corp, Mr Thomson shares Mr Murdoch’s combative approach to the establishment and willingness to make cuts if necessary. The question over what to do at the financially struggling New York Post will be at the top of his to-do list.
Mr Thomson’s probably move to the helm of News Corp’s publishing division is also expected to trigger a shake-up of other executive roles, with sources speculating that James Harding, editor of the Times, could move across to the Wall Street Journal .
However, Mr Thomson’s ascendance at News International will come as a blow to Tom Mockridge, chief executive of the company’s UK newspaper division, News International, who had also been widely tipped to lead the new publishing arm. Sources thought he would land the job partly as a reward for agreeing to swap his job as chief executive of Sky Italia to help revive the troubled newspaper business after it was left in tatters by the phone hacking scandal.
Other potential contenders included Lachlan Murdoch, already a member of the News Corp board, although his father Rupert Murdoch had indicated in recent weeks that this was looking unlikely. News Corp is already facing charges of nepotism and Lachlan Murdoch has shown little interest in the newspapers, or leaving his existing job in Australia.
Mr Murdoch has claimed that News Corp’s split into two divisions has nothing to do with the phone hacking or police bribery scandals in the UK, that have engulfed the entire company and left its reputation in tatters. However, the separation will allow the business to draw a clean line between its damaged publishing assets and the most valuable parts of the empire.