News Corp.'s board of directors formally approved plans Friday to split the company into two distinct and publicly traded media conglomerates.
One company, 21st Century Fox, will be comprised of its television and film holdings, while the other, christened the new News Corp., will consist of its publishing and education assets.
The publishing division is worth a fraction of what the studio side is valued at -- under the separation, shareholders will receive a ratio of one share of the new News Corp. for every four shares of the old News Corporation.
The decision to fundamentally alter the makeup of News Corp. was announced last summer and was partly undertaken to shield the more valuable film and television assets from the phone hacking scandal that engulfed the company's United Kingdom-based tabloids. The illegal news gathering tactics at the now defunct News of the World has inspired a wave of legal issues and bad publicity for News Corp.
The great fracturing will take place on June 28, 2013. In addition to giving its blessing for the separation, the board also approved a $500 million stock repurchase initiative for shares of the new News Corp.
21st Century Fox will boast Fox broadcasting, 20th Century Fox, National Geographic, and Fox News. News Corp. will be made up of such titles as the Wall Street Journal and the New York Post.
Rupert Murdoch will serve as chairman and CEO of the proposed 21st Century Fox, and executive chairman of the new News Corporation. He will have a spot on both companies' boards as will his sons, James and Lachlan.
Daughter Elisabeth Murdoch, the chairman and CEO of the production company Shine Limited, is not listed as a member of either board. In 2011, she turned down an opportunity to join the board after News Corp. acquired Shine, deeming it "inappropriate."
"We continue to believe that the separation will unlock the true value of both companies and their distinct assets, enabling investors to benefit from the separate strategic opportunities resulting from more focused management of each division," Rupert Murdoch said in a statement.
Boards of Directors Effective upon Completion of Separation
21st Century Fox:
Sir Roderick Eddington
The new News Corporation:
José María Aznar
Ana Paula Pessoa*
(* indicates Directors not on the current News Corporation Board -- biographies below.)