From Phone Hacking to the Splitting of Businesses in Times of Corporate Crisis : The Case of News Corporation

Abstract

This article analyses the split of the former News Corporation into two new companies within a context of change in the media industry’s market dynamics. The aim of this paper is to demonstrate that the phone hacking scandal in the News of the World, formerly one of News Corporation’s best-selling tabloid newspapers in the United Kingdom, should be interpreted as a problem that Rupert Murdoch managed to address despite the toll that the case had taken on the company. Moreover, rather than a cause of the subsequent split, it should be understood as a means of halting the company’s BSkyB takeover bid. This crisis gave the conglomerate the opportunity to make changes to its global strategy by specialising in market niches through two new brands: 21st Century Fox and the new News Corporation.