How a global media empire split itself to survive a phone hacking scandal
Rupert Murdoch built a media juggernaut that once dominated news, film, and print worldwide. Yet, a massive phone hacking scandal in 2011 forced a radical transformation. To protect shareholder value and distance its publishing assets from toxic controversies, the company executed a historic split into two distinct, publicly traded entities.
Founded in 1980, the original News Corporation grew from its Australian roots into a sprawling multinational conglomerate. By the early 21st century, it held iconic properties including The Wall Street Journal, 20th Century Fox, and News of the World. Its growth was fueled by aggressive acquisitions, such as the 1985 purchase of Metromedia stations—which launched the Fox network—and the 2007 acquisition of Dow Jones & Company for $5 billion. Murdoch maintained effective control through voting shares, even as his family's ownership stake was diluted over time.
The turning point arrived in 2011 when the News of the World newspaper faced intense scrutiny over illegal phone hacking. Allegations revealed that the tabloid had targeted victims of the September 11 terror attacks, family members of fallen soldiers, and even a missing schoolgirl. The scandal triggered government probes in the United States and the United Kingdom, leading to the closure of the newspaper and the resignation of Dow Jones CEO Les Hinton. The reputational damage became a significant liability for the broader corporation.
In response, Murdoch announced a restructuring in 2012 to separate the company's publishing and media assets. The split, finalized on June 28, 2013, created a new News Corp focused on publishing and Australian broadcasting, while the original entity was renamed 21st Century Fox. This move aimed to unlock shareholder value and isolate the publishing business from the media conglomerate's other interests. The saga continued as 21st Century Fox was eventually acquired by Disney in 2019, leaving the modern News Corp as a distinct entity. Despite attempts to re-merge with Fox Corporation in 2022, the two remain separate, marking the end of the original News Corporation's unified era.
Source: News Corporation
