Rupert Murdoch's News Corp announced Thursday it intends to split into two companies, separating the huge entertainment division from its struggling publishing business.
Murdoch said he would be chairman of both companies, including an entertainment unit led by Fox studios and television assets, and a publishing unit that includes The Wall Street Journal and Times of London.
"I firmly believe the future is very bright for both companies," Murdoch told a conference call, while noting that there were several "hurdles" before the split could be carried out.
"Both of these businesses will be able to reach new heights."
The split would spin off the struggling publishing operations which have been hit by the slump in the newspaper industry from the more profitable entertainment division.
Murdoch, who is chairman and chief executive of News Corp, said the company has "a large and unparalleled portfolio of diversified assets" and that this structure has "become increasingly complex."
"We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe," the Australian-born magnate said in a statement.
The deal is expected to take some 12 months to complete and will need final board and shareholder approval. Murdoch would serve as chairman of both companies and CEO of the media and entertainment company.
Chase Carey, the conglomerate's deputy chairman, would serve as president and chief operating officer of the media and entertainment company.
There was no word on who would head the publishing operations, which include The Wall Street Journal, Dow Jones Newswires, HarperCollins, The New York Post, and The Daily, as well the Times of London and other assets in Britain and Australia.
The media and entertainment company "would encompass News Corporation's broadcast and worldwide cable networks, leading film and television production studios, television stations and highly successful pay-TV businesses in Europe and India," the statement said.
The bigger unit includes Fox Broadcasting, Twentieth Century Fox Film, Twentieth Century Fox Television, Fox Sports, Fox International Channels, Fox News Channel, Fox Business Network, FX, Star and other TV operations.
The move comes with Murdoch's empire under pressure from the phone-hacking scandal in Britain that resulted in the closure of the company's flagship News of the World tabloid and the resignation of several senior executives.
Murdoch said the move "is not a reaction to anything in Britain" but had been under study for years as a way to boost shareholder value and simplify management.
Some see the move as an effort to fence off the hacking scandal and give Murdoch a chance to carry out his plan for a full takeover of satellite broadcaster BSkyB, in which News Corp has a 39 percent stake.
But the reorganization also could boost shareholder value for a conglomerate hurt by a so-called "Murdoch discount."
News Corp shares have been rallying since word leaked out and the company confirmed it was considering a split.
Shares have now surged more than 11 percent since news of the split emerged earlier this week.
Despite concerns about the troubles for the news industry, Murdoch said he sees a positive outlook.
"The answer in one word is digital," he said.
"People are buying fewer papers but they are equally getting their news in many other forms. People will pay for news, it's the most valuable commodity in the world. People need to know what's going on."
Andrew Anagnostellis at Deutsche Bank said in a note Wednesday that a split would be "a major positive for shares, even beyond the initial reaction, and would fit in with the many positive steps the company has been taking."
The split, the analyst said, "could help isolate the hacking scandal from the rest of the company, both in terms of management distraction and contagion risk.
"This would not absolve Newscorp from financial liability for historical behavior, but it would, in theory, give Mr Murdoch greater editorial freedom going forward," he added.