The Hollywood Reporter -- News Corp. has taken another step in its plan to separate its business into individual entertainment and publishing companies, filing a formal registration of those units with the U.S. Securities and Exchange Commission.
The move comes after a June announcement that it would be going ahead with the split. The bulk of News Corp.'s TV, film and other entertainment assets will be operated under president Chase Carey as the Fox Group, while the publishing entity will retain the News Corp. name and be led by CEO Robert Thomson.
Rupert Murdoch will be executive chairman of the publishing company and chairman and CEO of the entertainment company.
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The move to register with the SEC starts the process of detailing the separation. The company has filed a Form 10 Registration Statement as well as a preliminary proxy statement to allow shareholders to consider amendments to the company's charter to enable consummation of the separation.
"Today we are pleased to provide further details on the new News Corporation -- a global diversified media and information-services company uniquely positioned to take advantage of exciting growth opportunities and new business models," said Murdoch.
The papers reveal that the publishing business (called the New News Corporation in the filing) lost $2.1 billion last year after making a profit of $678 million in 2011. Revenue was off from $9.1 billion to $8.65 billion amid write-downs, falling sales and the shuttering of the News of the World tabloid after the hacking scandal. The publishing unit is acknowledged by many as offering lesser growth, but the company has signaled that it will be spun off with significantly less debt. The publishing business acknowledges its core challenge ahead as responding to changing consumer behaviors as the result of new technologies in the industry.
Thomson will earn $2 million in base salary and stands to double that in bonuses and incentives. According to the SEC filing, Murdoch's pay will "increase modestly." He made about $30 million last year.
The proxies will allow shareholders to vote on changing the Certificate of Certification to allow for a name change as well as authorize distribution of stock. An amended certification will mean other things, too. For example, the company says it "may have the effect of making the acquisition of control of our company in a transaction that is not approved by our board of directors more difficult."
The filing also indicates that the New News Corporation will need to attain regulatory approval in Australia to finalize the split.
The SEC filing also acknowledges the hacking scandal that many have fingered as precipitating the split. The company notes that the investigation continues and that senior executives will have to adopt a code of ethics.
"We are not able to predict the ultimate outcome or cost of the investigations," says News Corp. in the filing. "Violations of law may result in civil, administrative or criminal fines or penalties and other costs. These proceedings and any adverse resolution thereof could damage our reputation, impair our ability to conduct our business and adversely affect our results of operations and financial condition."
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