Rupert Murdoch's biographer has suggested that the media tycoon could sell News International in order to pursue more profitable interests.
Michael Wolff is a contributing editor to Vanity Fair and author of the 2008 biography, Inside the Secret World of Rupert Murdoch, for which he spent 50 hours interviewing the media tycoon.
According to the British newspaper, The Daily Telegraph, Wolff believes there are people within News International who question the need for the company to hold onto its stable of newspapers.
Murdoch's newspaper division, which includes titles in Australia and the United States, is reported to provide a lesser and declining share of profits than the company's cable-television and film businesses.
The Telegraph reported that analysts at Needham & Co in New York believe News Corp's titles in the United Kingdom – The Sun, The Times and The Sunday Times - account for 10% of the $956 million of earnings in the current financial year, while the cable television channels led to a 25% profit hike to $735 million in the last quarter.
News Corp's cable-television and film arms stretch across Europe, Latin America, India, the Middle East, Asia and New Zealand. In the United States, News Corp owns Fox Filmed Entertainment, Fox Broadcasting Company, Fox News, Fox Sport and Fox International Channels. The company also owns newspapers such as The Daily Post and The Wall Street Journal. In Australia, News Corp owns 146 news brands including The Australian and Herald Sun, but also has stakes in Premier Media Group, Premium Movie Partnership and Foxtel.
The news follows a spate of bad publicity for Murdoch's News Corp, which yesterday afternoon withdrew the undertakings it offered the government to avoid referral to the country's Competition Commission.
News Corp has withdrawn a pledge to spin Sky News into an individual company with a 39.1% ownership stake, an independent editorial board and a long term ad contract arrangement, as a grounds for its 8 billion pound take over of satellite broadcaster, BskyB.
When News Corp submitted the withdrawal, Culture Minister Jeremy Hunt was preparing to announce that the government would refer the undertakings to the Commission. After hearing of News Corp's move, Hunt continued to make the referral.
The House of Commons has been rife with opposition to the takeover in the past few days, with Labour Opposition Leader Ed Miliband calling for a vote on whether the proposed merger should be stalled until after the police investigation into alleged phone hackings was complete.
BskyB's share price has plummeted since the revelations about the phone hackings at the News of the World were broken in the Guardian newspaper last week, and since Murdoch's son and News Corp deputy, James Murdoch, announced last Friday that the newspaper would close.
BSkyB shares dropped 57 pence (7.6%) to 6.93 pounds sterling in London last night. Meanwhile, News Corp non-voting shares fell 88 cents (5.4%) yesterday to close at $15.37 and voting shares fell 85¢ (5%) to close at $15.92.
The referral process is expected to take around six months, raising questions about whether the entire deal could be scrapped.
Meanwhile, fresh allegations have emerged that other News International journalists, possibly from The Sun and Sunday Times newspapers, could be embroiled in further phone hacking scandals.
Former Prime Minister Gordon Brown is reported to have been targeted through attempts to access his voicemail, bank accounts and legal files.
Adding to the ongoing saga, it is understood that News International chief executive and former News of the World editor Rebekah Brooks has expressed her willingness to speak to Scotland Yard as a witness for their inquiries.
Staff at News of the World, together with members of the public, had called for Brooks's resignation but Murdoch maintains she will remain in the role.
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