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Earlier today, News Corporation announced that it willsplit into two publicly-traded companies--one for the entertainment interests and one for the newspaper and publishing businesses.

In a news release, the company said the split would be completed within the next 12 months, with Mr. Murdoch serving as chairman of both companies and chief executive of the entertainment business. Chase Carey would remain chief operating officer of the entertainment group, which would include cable channels like FX and Fox News, the 20th Century Fox studio and Fox Broadcasting. In the coming months, the board of directors would decide the leader of the publishing business.

“News Corporation’s 60-year heritage of developing world-class brands has resulted in a large and unparalleled portfolio of diversified assets,” Mr. Murdoch said in a statement. “We recognize that over the years, News Corporation’s broad collection of assets have become increasingly complex.”

Read the release here.  Somehow, Newscorp managed to say with a straight face that this has nothing to do with the phone-hacking scandal.  If anyone believes that, there's a bridge in Brooklyn I'd like to sell you.  Indeed, the BBC effectively called BS on that notion, saying it will almost certainly shield the entertainment side from the scandal even though Murdoch will remain chairman of both companies.

Murdoch wrote a memo to Newscorp employees in which he spun this as a natural product of the company's growth.  One really has to wonder if he actually believes what he wrote, considering the circumstances.

The split will likely be taken to Newscorp's shareholders sometime in the first half of 2013, and also requires regulatory approval as well.  I have to wonder if the regulators would have grounds to insist Murdoch give up the chairmanship of one or both companies as a condition of approving the deal.

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