12.03.12 5:08 PM ET
Rupert Murdoch’s Incredible Shrinking News Corp.
Following the multiple arrests in the phone-hacking and police-bribing scandals that have engulfed his British tabloids, Rupert Murdoch has accelerated his plans to separate the lucrative Pay-TV from News Corp.’s troubled publishing assets, according to a series of announcements over the last 24 hours.
In what amounts to a radical shrinkage of the news empire that Murdoch built up over 50 years, News Corp. will represent only the famous upmarket and tabloid newspaper titles, most notably The Times of London, The Sunday Times, The Wall Street Journal, the Australian, the New York Post and The Sun, in addition to the book publisher HarperCollins. Robert Thomson, Murdoch’s long-term confidante and compatriot and former editor of both The Times and WSJ, will take over as CEO of the much-reduced News Corp. Murdoch himself will remain as chair. Jesse Angelo takes over as publisher of the New York Post, and Gerard Baker, deputy editor in chief of WSJ, replaces Thomson as Dow Jones editor in chief.
Though Murdoch welcomed the announcement on Twitter, there was less good news for the new publishing company. Murdoch’s bold experiment in tablet-based publishing, The Daily, will close on Dec. 15—but its former publisher, Greg Clayman, will now oversee the digital strategy for the publishing group.
This game of corporate musical chairs will be welcomed by shareholders, who always saw the declining world of print as a sentimental expression of Murdoch’s newspaper background and a drain on profits. But the demerger was very much forced by events at Wapping, the London newspaper base that provided the profits for Murdoch’s U.S. and pay-TV expansion, and where he had unprecedented political clout, having close relations with four of the last five British prime ministers.
Murdoch himself put the best gloss on the demerger. "We aren't finished achieving what others deem impossible. Not even close," he wrote in an email to the staff of his troubled U.K. publishing subsidiary News International. "And the best news of all ...” Murdoch concluded: “we're just getting started."
The effusive email failed to make any mention of the outgoing CEO of News International, who announced he was leaving the company in a surprise move last night. Tom Mockridge, the man brought in to replace Rebekah Brooks when she resigned in the summer of 2011, had been seen as a stabilizing hand after the shuttering of News of the World, during a period when senior editors and journalists from both the Sunday tabloid and daily Sun were arrested on suspicion of phone hacking and illegal payments to public officials. Mockridge was brought over from Sky Italia and was seen as an ally of James Murdoch, whose handling of the crisis, which happened on his watch, came under much criticism. Mockridge will be replaced by Mike Darcey, the chief operating officer of BSkyB, the lucrative British satellite company whose complete takeover by News Corp. foundered in the wake of the hacking scandal.
Mockridge’s departure and his replacement suggest that the role of CEO of News International, once one of the most powerful positions in the publishing world, has become a much reduced role, if not a poisoned chalice.
The remaining television, film, and entertainment assets—which represent over 75 percent of the old corporation’s profits—will be renamed Fox Group, with Murdoch remaining as both chair and CEO.