The two parts of Rupert Murdoch’s media empire are discussing a merger nearly a decade after they split.The merger would combine Murdoch’s Fox News and TMZ assets with News Corp’s newspaper and online news operations, including the Times and the Sun in the UK, the Wall Street Journal and New York Post in the US, and the Australian.In a press release, News Corp confirmed that following instructions from Murdoch and the Murdoch Family Trust, the companies have formed a special committee “composed of independent and disinterested members of the board” to begin exploring a potential combination.The Murdoch-owned Wall Street Journal reported on Friday that the News Corp chief executive, Robert Thomson, had informed staff about the potential merger.“At News Corp, we are constantly pursuing ways to enhance our performance and expand our businesses, and the upheaval in media presents both challenges and opportunities,” he wrote in a memo. “However, I would like to stress that the Special Committee has not made any determination at this time, and there can be no certainty that any transaction will result from its evaluation.”After years of expansion globally, Murdoch split his empire in 2013, placing the print business in a newly created public entity, News Corp, and the TV and entertainment under 21st Century Fox.Murdoch said at the time that his vast media holdings had become “increasingly complex” and that a new structure would simplify operations. The split also shielded Fox’s entertainment assets from any potential financial fallout from a phone hacking scandal involving the media conglomerate’s now-defunct News of the World publication in the United Kingdom.The thinking at the time was that separating the companies ultimately would generate value for shareholders, according to one person familiar with the decision-making. That vision was realized as Fox sold the bulk of its film and television assets to Walt Disney for $71bn in 2019.The sale left Fox focused on live events such as news and sports, rather than “disruptable” scripted entertainment content on the streaming platforms, Wall Street analysts observed at the time.The major streaming services, however, have begun breaching the protective moat. Apple and Amazon, two technology giants with deep financial resources, have begun bidding for sports, securing rights to stream Major League Baseball, soccer and football games.Fox recently renewed a long-term deal with the NFL to continue broadcasting Sunday afternoon games, but relinquished Thursday Night Football to Amazon.Reuniting Fox and News Corp would give the combined companies greater scale to compete, and complement their assets, the person familiar with the proposal said. The combined companies would have about $24bn in revenue.Murdoch, 91, currently has near-controlling stakes in both the companies. His son Lachlan Murdoch is chairman and CEO of Fox Corp. Companies that adopt such arrangements typically make subsequent mergers subject to approval by a majority of shareholders not affiliated with their controlling shareholder, though it’s not clear whether this will be the case in this instance.As of market-close on Friday, News Corp had a market cap of $9.31bn and Fox Corp was $16.84bn. News Corp shares surged 5% and Fox rose about 1% in after-market trade.Reuters contributed to this story.
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