The companies announced Friday that two parts of Rupert Murdoch’s media businesses, News Corp and Fox Corp, are considering a proposal to reunite after nearly ten years of separation.
The companies said Fox and News Corp boards had established committees to evaluate the potential deal. The committees have not decided on allying.
The merger of Fox and News Corp would represent a face-off for both companies, which told investors that the two firms would be better off separately when they split.
Plans for the breakup came after a phone-hacking scandal in The News of the World tabloid in the UK exposed the company to legal and financial risks. Several other media groups followed suit, stripping their profitable TV businesses from their slow-growing print assets.
If it goes through, the deal could place a collection of news and entertainment assets, including Fox News, The Wall Street Journal, Fox Broadcasting Network and TMZ, under the same corporate umbrella.
In 2019, Murdoch sold some of his most significant entertainment assets, including 21st Century Fox Movie Studios, to The Walt Disney Company. It was one of several media deals competing with tech giants like Meta, which owns Facebook and Alphabet.
According to three people with knowledge of the talks, Murdoch, the president of both companies, proposed the deal within the past two weeks. The Murdoch Family Trust, which has an ownership stake in both companies, supported the merger.
Murdoch sees potential wealth-building and cost-saving opportunities for joining both companies. The new company may be looking for ways to integrate its media properties. It can also explore ways to use company assets for emerging business lines, such as sports betting. In 2019, Fox said it was joining forces with Stars Group, a gaming company, to launch a sports-betting platform called Fox Bet.
People said merged companies could save money by hiring a management team and maintaining vendor relationships.
The Wall Street Journal reported that News Corp and Fox were weighing a deal.
News Corp CEO Robert Thomson told employees about the merger proposal in an email Friday.
“At News Corp, we are continually pursuing ways to enhance our exposure and expand our businesses, and the turmoil in the media presents both challenges and opportunities,” he wrote in the email published in The New York Times.