News Corp. (NWSA) Pops on Stock Split Rumors

One of the largest media conglomerates in the world is considering splitting into two companies.

News Corp. (Nasdaq: NWSA) – whose properties include The Wall Street Journal, HarperCollins book publishing and the Fox broadcast network, among others – is proposing a split of its publishing and entertainment companies. The restructuring would divide News Corp. into two publicly traded companies.

Mere consideration of the split has pushed News Corp. shares up 6.3% in mid-day trading today. The stock has now risen nearly 20% in 2012.

If News Corp. does go through with its rumored stock split, the entertainment company would dwarf the publishing company. It would essentially allow the entertainment side of News Corp.’s business to flourish and not be dragged down by the company’s floundering publishing branch. News Corp.’s TV and film assets accounted for $25.4 billion of the company’s revenue in the past nine months – about three-quarters of the company’s overall revenue, and 90% of the company’s operating profits.

That News Corp.’s publishing assets are struggling comes as no surprise given the move toward web and mobile content over the traditional print and newspaper route. A split would give News Corp. investors a choice of whether or not they want to invest in a dying industry, or invest solely in the company’s booming entertainment business.