Which looks like a pretty cunning plan.
Rupert Murdoch’s News Corporation is planning to hive off its troubled UK newspaper business into a separate company (along with its other papers like the Wall Street Journal), leaving its ‘entertainment’ assets – Fox, Star in Asia and, presumably, its various Sky TV businesses in a bigger, supposedly higher growth company.
This, the company hopes, will mollify shareholders and get UK regulator Ofcom off its back. Ofcom is currently looking into News Corp’s ownership of 39 per cent of fabulously profitable UK pay-TV broadcaster BSkyB and, as things stand, may demand that News Corp reduces its holding as its antics in the phone hacking and other scandals call into question its status as a ‘fit and proper’ owner of a UK broadcasting licence.
Down the line, the plan appears to be to come back with another bid for the 61 per cent of BSkyB it doesn’t own. Its last bid, valuing the whole of Sky at around £12bn, was pulled when the phone hacking scandal reared out of control with the hacking of murdered schoolgirl Milly Dowler’s phone.
There’s worse to come on the scandal front, with former News International CEO Rebekah Brooks and, no doubt, many other News staff, due to appear in court in the UK next year to face some juicy charges including conspiring to pervert the course of justice, an offence that carries a maximum life sentence (although this would be a tad harsh).
News Corp has no chance of coming back with a bid for Sky as things stands. But Fox, or whatever the entertainment company is to be called, probably would.