Two US newspapers in Murdoch's sights

Media tycoon Rupert Murdoch is eyeing up the Los Angeles Times and Chicago Tribune newspapers as he looks to prove there is still money to be made out of print.

Mr Murdoch, who closed the News of the World last year in the wake of the phone-hacking scandal, is splitting his News Corporation empire into entertainment and publishing arms.

Banking sources said this weekend that spending as much as $400m (£250m) on the LA Times alone would send a signal to the market that newspapers were not "a dead duck" commercially and that the publishing business, which will also own The Times and The Wall Street Journal, could still thrive. The entertainment group's assets would include 20th Century Fox.

One source said: "Newspapers are in Murdoch's blood. I suspect he wants to demonstrate there is still growth in newspapers."

The US papers are owned by the struggling Tribune Company. Reports yesterday said a News Corp delegation, including Rupert's son James, had flown to Los Angeles twice in the past month to look over the books.