News Corp Division: Murdoch’s Still in Charge

On Monday, News Corporation (NASDAQ:NWSA) released some details about the long-awaited separation of its publishing and entertainment businesses. Rupert Murdoch’s media empire will be split into a publishing entity that will retain the name News Corporation, while the media and entertainment company will be named Fox Group.

Why is News Corp. Splitting Itself in Half?

The short answer is: pressure. Murdoch was attacked by media and regulators over the criminal investigations of his company’s involvement in a phone-hacking scandal in the U.K. that caused the News of the World tabloid to be shut down last year. According to CNN, a report from the British Parliament following the investigation said that Murdoch was not a “fit person to exercise the stewardship of a major international company.”

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Many shareholders also favor the decision, perhaps siding with U.K. authorities about Murdoch’s leadership or seeing a greater competitive advantage in two more focused, streamlined companies. Shares are up over 22 percent since June when the split was first announced, outperforming both the S&P 500 and competitors like CBS Corp. (NYSE:CBS) and Walt Disney Co. (NYSE:DIS).

CHEAT SHEET Analysis: Is There Enough “A-Level Management” to Go Around?

News Corporation’s release is packed with information detailing the wide-sweeping changes in leadership that will take place with the separation. One of the core components of our CHEAT SHEET investing framework asks us to investigate whether A-Level managers are jockeying the horse. No matter how thoroughbred a horse, the jockey is critical to success…