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Fox board creates committee to probe reunion with News Corp

The Fox Broadcasting logo appears on a building in Phoenix, Arizona in an undated image posted to Flickr and licensed through Creative Commons
(Photo by Tony Webster via Flickr Creative Commons, Graphic by The Desk)

The corporate board of Fox Corporation has formed a special committee that is exploring a possible merger of the broadcast network with News Corp, the parent company of the Wall Street Journal.

The affirmation came Friday afternoon after the Journal reported News Corp founder and executive chairman Rupert Murdoch was exploring the idea of reuniting his two media empires nearly a decade after they were spun off into separate companies.

In a press release, a Fox Corporation spokesperson confirmed the special committee was formed after receiving letters from Murdoch and his family trust that outlined the idea of reunifying the companies. The spokesperson said the committee would be comprised of “independent members” of Fox Corporation’s board.

“The special committee has not made any determination at this time, and there can be no certainty that the company will engage in such a transaction,” the spokesperson warned, adding that additional information would not be made public unless the committee “deems further disclosure is appropriate or required.”

“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,” Robert Thompson, the chief executive of News Corp, wrote in a memo to employees on Friday. “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.”

A merger of Fox Corporation and News Corp would bring Murdoch’s broadcast and publishing empires under a common entity. Fox Corporation operates the flagship Fox broadcast network as well as Fox News Media (Fox News, Fox Business, Fox Weather, Fox News Books), Fox Sports and the free streaming service Tubi. News Corp owns Dow Jones, the parent company of the Wall Street Journal, as well as book publisher HarperCollins, tabloid newspaper New York Post and Australian and British news companies.

Financial disclosures filed on behalf of Fox and News Corp showed the Murdoch family trust has roughly equal voting stakes in each company, the Journal said. If the companies merged, the trust’s voting share is likely to remain the same.

People familiar with the matter told the Journal that the deal is likely to be one involving stock. The balance sheet at Fox Corporation is the stronger of the two, with the company valued at around $17 billion as of Friday afternoon; News Corp is valued at around $9 billion.

Murdoch spun off Fox Corporation from News Corp in 2013. At the time, Fox Corp consisted of the television and cable networks as well as a film library, production studios and general entertainment cable channels under the 21st Century Fox brand. The film, studio and general entertainment cable networks were sold to the Walt Disney Company several years ago.