In another blow to Rupert Murdoch’s newspaper empire, it was announced today that two of his most prominent former editors have been charged with phone hacking.
From Bloomberg: Read more
Upon closing of the proposed transaction, News Corporation’s shareholders would receive one share of common stock in the new company for each same class News Corporation share currently held. Following the separation, each company would maintain two classes of common stock: Class A Common and Class B Common Voting Shares.
Upon closing of the proposed transaction, Rupert Murdoch would serve as Chairman of both companies and CEO of the media and entertainment company. Chase Carey would serve as President and COO of the media and entertainment company. Over the next several months, the Company will assemble management teams and Boards of Directors for both businesses. Read more
That’s 1211 Avenue of the Americas, New York. Read more
News Corp’s share price at pixel time:
Presenting ‘News International and Phone-hacking’ — the report in which a committee of British MPs voted 6-4 to conclude that ’Rupert Murdoch is not a fit person to exercise the stewardship of a major international company’.
Presenting Exhibit KRM 18, submitted to the Leveson Inquiry (click pic for doc):
Is it us, or is there not much reaction from BSkyB’s share price (down 0.66 per cent at pixel time, via Google Finance) to the imminent exit of its chairman, James Murdoch…
UK communications regulators have stepped up an investigation into whether BSkyB qualifies as ‘fit and proper’ to own a broadcasting licence, placing the stake owned by News Corp in further doubt, the FT says. Ofcom intensified its probe in January and will consider the status of both BSkyB chairman James Murdoch and News Corp, which holds a 39.1 per cent stake. Rupert Murdoch withdrew a planned bid for the rest of BSkyB last summer, in the depths of the phone hacking scandal.
NEW YORK–(BUSINESS WIRE)–News Corporation today announced that, following his relocation to the Company’s headquarters in New York, James Murdoch, Deputy Chief Operating Officer, has relinquished his position as Executive Chairman of News International, its UK publishing unit. Tom Mockridge, Chief Executive Officer of News International, will continue in his post and will report to News Corporation President and COO Chase Carey…
“I deeply appreciate the dedication of my many talented colleagues at News International who work tirelessly to inform the public and am confident about the tremendous momentum we have achieved under the leadership of my father and Tom Mockridge,” said James Murdoch. “With the successful launch of The Sun on Sunday and new business practices in place across all titles, News International is now in a strong position to build on its successes in the future. As Deputy Chief Operating Officer, I look forward to expanding my commitment to News Corporation’s international television businesses and other key initiatives across the Company. Read more
Rupert Murdoch will fly to the UK this week to troubleshoot another crisis in his British newspaper business which threatens to reach to the heart of News Corp, reports the FT. UK police arrested five journalists of The Sun on Saturday, in the latest stage of an investigation into potentially corrupt payments. Executives have relayed to Sun staff Mr Murdoch’s “personal assurance” that the newspaper will not be closed down. Nevertheless, News Corp has faced the potential enforcement of the US Foreign Corrupt Practices Act over the scandal. Calls for News Corp to sell its newspaper arm have grown, the WSJ says.
The UK newspaper scandal that forcedNews Corp to shut the News of the World has cost Rupert Murdoch’s media group at least $195m so far, it said as it warned that it could not predict its future outlay on lawyers’ fees and civil settlements with phone hacking victims, reports the FT. Second-quarter results from the US group showed further strength at cable networks such as Fox News that account for almost 60 per cent of operating income, but highlighted its newspaper assets as an increasing drag on profits. News Corp on Thursday announced a further $87m in charges related to investigations stemming from revelations of phone hacking, payments to police officers and computer hackingat its UK newspaper arm.
News Corp has begun to spell out the financial cost of the News of the World phone hacking scandal, saying that a $91m restructuring charge and a $68m hit to its publishing profits in its latest quarter stemmed primarily from its closure this July of the tarnished Sunday tabloid. Rupert Murdoch, chairman and chief executive, missed a conference call to discuss fiscal first-quarter results in which one-off charges knocked net income by 3 per cent to $738m even as strength in cable networks and Fox broadcast television lifted operating income by 21 per cent to $1.39bn. A week before James Murdoch is due to return to a House of Commons select committee to discuss what he knew about what a senior barrister told the company in 2008 was “a culture of illegal information access” at the UK tabloid, he received fresh backing from Chase Carey, chief operating officer. The Telegraph reports Mr Carey said the votes against Murdoch members of the board and other members at last month’s AGM would be taken seriously, and “we continue to evolve the board on an ongoing basis”.
James Murdoch will come under further pressure from MPs over what he knew about phone hacking at the News of the World, the FT reports, following the release on Tuesday of documents citing the tabloid’s own lawyers. The papers, including a QC’s opinion, suggest that some of Mr Murdoch’s most senior advisers knew three years ago that the illegal practice was widespread at the now-defunct newspaper. The newly published documents also show that Colin Myler, NoW’s former editor, told an external lawyer that he believed Mr Murdoch would tell him to “get rid” of journalists and “cut out [the] cancer” afflicting the newspaper if he knew about it. But the documents, released by MPs investigating the phone hacking scandal, do not show that Mr Murdoch, then executive chairman of the paper’s parent, News International, was aware of the extent of the brewing crisis at the tabloid.
News Corp is bringing together the two largest religious publishers in the US in a big bet on the market for bibles and Christian literature, the FT reports. HarperCollins, the publishing house owned by News Corp, on Monday announced the acquisition of Thomas Nelson, the largest religious publisher in the US. News Corp already owns Zondervan, the largest US bible publisher and second-largest religious publisher overall. Terms of the sale were not released, but a person familiar with the deal said News Corp paid less than $473m, the price at which Thomas Nelson was taken private by InterMedia Partners in 2006.
AGM vote tallies like this one released by News Corp late Monday don’t come up too often:
An unprecedented majority of News Corp’s independent shareholders voted to sweep Rupert Murdoch, his sons and other directors off the board, the FT reports. The US media group disclosed the details of the vote late on Monday evening with little explanation, three days after it survived atempestuous annual meeting. The votes pose no immediate threat to the Murdoch family’s control, given its 38.4 per cent bloc of voting shares and support from Prince Alwaleed bin Talal, the Saudi investor who controls 7 per cent. Just 20 per cent of voting shareholders not aligned with News Corp’s founding family voted for James Murdoch to be re-elected, reflecting concern about the deputy chief operating officer’s response to the UK phone hacking scandal that scuppered the group’s bid for British Sky Broadcasting. He faces a separate re-election battle as chairman of BSkyB next month. About 60 per cent of non-aligned shareholders voted against Rupert Murdoch’s re-election or abstained. An investor proposal to split his roles as chairman and chief executive was defeated.
News Corp investors will be queueing up at Friday’s shareholder meeting in Los Angeles to pour scorn on Rupert Murdoch’s handling of the British phone hacking scandal, the NYT reports. The Murdoch family’s forty per cent stake in the company makes the removal of Rupert Murdoch, or his sons Lachlan and James from the board effectively impossible. This won’t stop a legion of proxy firms from trying, given anger over the damage to the company from events in Britain, Marketwatch says. Even a 20 per cent protest vote against Rupert Murdoch would mark a significant change in shareholder attitudes, the FT notes.
News Corp is facing fresh questions about its newspaper operations, after allegations that circulation figures for the European edition of the Wall Street Journal were boosted by complex cut-price deals with a sponsor to which it had promised editorial coverage, the FT reports. On Wednesday, The Guardian alleged that ELP had been paying just 1 cent per copy for 12,000 daily copies of the WSJE, equivalent to 16 per cent of its circulation, to be sent to students bearing its name. Dow Jones denied that it had effectively bought thousands of copies of its own paper through complex agreements with ELP and two “middle men” companies and said it paid ELP for conference services.
News Corp is facing a new wave of scrutiny of the fall-out from the News of the World scandal in the coming weeks, as new testimony to UK officials investigating phone hacking coincides with rising shareholder pressure on the US media group and its UK affiliate, British Sky Broadcasting, the FT reports. The House of Commons select committee investigating the scandal announced plans to interview Les Hinton, a former head of the group’s UK newspapers, on October 24. In July, this committee grilled Rupert Murdoch, News Corp’s chairman and chief executive officer, and his son James, News Corp’s deputy chief operating officer and BSkyB’s chairman. Meanwhile one of BSkyB’s leading shareholders has called for James Murdoch to resign as its chairman as investor concerns mount after the phone-hacking scandal at News International, the FT reports. “While we acknowledge the track record of Mr Murdoch, we think that at this point an independent chairman would be advisable,” said Peter Langerman, president and chief executive officer of Mutual Series, an investment team within Franklin Templeton Investments.
The publisher of News Corp’s Wall Street Journal Europe newspaper resigned because of what he called a possible perception of impropriety involving two articles that originated with a business partner, reports Bloomberg. Andrew Langhoff wrote in an email to employees that an arrangement between the circulation department and a company called Executive Learning Partnership could be viewed as undermining the news operation’s editorial independence. “Because the agreement could leave the impression that news coverage can be influenced by commercial relationships, as publisher with executive oversight, I believe that my resignation is now the most honorable course,” Mr Langhoff wrote in the email. A note added at the top of the stories on the WSJ website says the article was written in connection with the now-expired partnership between the two companies, but that the there was no input or review prior to publication by either ELP or the circulation department.
News Corp faced intensifying pressure for corporate governance changes on Monday as the biggest investor advisory group in the US recommended shareholders vote against the re-election of 13 of the media company’s 15 directors, including Rupert Murdoch, chairman and chief executive, the FT reports. The ISS advisory group said that the phone-hacking scandal at News Corp’s London-based newspaper group had “laid bare a striking lack of stewardship and failure of independence” by the board that had led to enormous financial and reputational costs to shareholders. ISS recommended that shareholders vote against the re-election of Mr Murdoch, his sons James, the deputy chief operating officer, and Lachlan, as well as the chief operating officer Chase Carey and all but two of the remaining directors, including non-executives such as Sir Rod Eddington, former chief executive of British Airways, and José María Aznar, the former prime minister of Spain. Only Joel Klein and James Breyer, both new directors, won a recommendation of support. News Corp’s annual shareholder meeting is in Los Angeles on October 21. Glass Lewis, the US investment advisers, also recommended a vote against the three Murdochs last week, along with four other directors, but the protests are likely to be an embarrassment rather than a threat to the board’s structure, as the Murdoch family controls of 40 per cent of voting rights.
Talks are taking place that could see the Dow Jones Industrial Average come under the same umbrella as the S&P 500 index, the FT reports, citing three people familiar with the discussions. Spokespeople for McGraw-Hill, owner of Standard & Poor’s, and CME, the Chicago derivatives exchange owner which bought 90 per cent of Dow Jones Indexes in 2010, declined to comment. Dow Jones, the News Corp subsidiary that owns 10 per cent of Dow Jones Indexes, and Dow Jones Indexes itself also declined to comment. The discussions were first reported by News Corp’s WSJ, also citing unnamed sources familiar with the situation. The FT’s sources cautioned that the talks had been going on for about a year and could change or fall apart. However, they added that the plan under discussion would see McGraw-Hill own almost 75 per cent of the joint venture, which would be housed in McGraw-Hill Markets, the financial services company that is to be formed when the media conglomerate spins off its education business next year. CME would have almost 25 per cent of the joint venture, with Dow Jones retaining a small stake.
US prosecutors are examining whether News Corp employees tried to access the voicemails of 9-11 victims, broke antitrust or related laws and, bribed UK police for information, Bloomberg reports, citing a person familiar with the probe. The third line of inquiry was disclosed on Tuesday with news of a US letter to the company requesting information on any bribes paid by its News of the World unit, said the person, who declined to be identified because the matter isn’t public. The letter is part of a Justice Department effort to determine whether News Corp violated the Foreign Corrupt Practices Act, the person said. The WSJ, citing people familiar with the matter on the subject of the letter, says legal experts believe the fact the decision to issue a “letter of request” rather than a criminal subpoena suggests the department has opted for a less confrontational approach to the matter.
Four former executives from News Corp’s UK newspaper arm will appear before a powerful parliamentary committee on Tuesday in the ongoing hunt to establish who knew what about phone hacking and whether James Murdoch did enough to uncover the scandal, Reuters reports. The committee called the four men who no longer work for News International — two lawyers, the head of human resources and an editor — after evidence emerged which suggested that the company had engaged in a huge corporate cover up. Meanwhile News International has put its 15-acre site in Wapping, east London, up for sale, reports the FT.
James Desborough, a former reporter at the News of the World, has become the 13th person to be arrested by police looking into illegal practices at the now defunct tabloid newspaper, reports the FT. Mr Desborough, who has been living in Los Angeles as the tabloid’s US editor since 2009, joined the paper in 2005 as a showbusiness and news reporter. He was arrested on suspicion of conspiring to intercept communications and was questioned at a London police station on Thursday. It is understood the allegations he is facing go back several years before he moved to the US. The WSJ adds that Glenn Mulcaire, the private detective at the centre of several allegations, is suing News Corp over legal fees.
Pressure was mounting on Rupert Murdoch’s News International last night after Clive Goodman, the FT says, the disgraced News of the World journalist jailed for phone-hacking, alleged in a letter that the illegal practice was “widely discussed” at the British newspaper’s editorial meetings. The claims raise questions about the possibility of a corporate cover-up at News International, the British newspaper arm of Mr Murdoch’s global media empire, that is being scrutinised by parliament and investigated by the police. James Murdoch, deputy chief operating officer at parent company News Corp and head of its international business, told a parliamentary committee last month that he had not realised until late in 2010 that more than one reporter had engaged in phone hacking. But Mr Goodman’s letter suggests that knowledge of phone-hacking reached a more senior level than had previously been acknowledged. James Murdoch is likely to be recalled by parliament to testify again.
Rupert Murdoch said there were no plans for any further leadership changes at News Corp in the wake of the phone-hacking scandal that has torn through his UK newspapers division, the FT reports. In a defiant performance during the company’s fourth-quarter earnings briefing call with analysts and the media, Mr Murdoch said the board supported him staying on as chief executive, that his son James, the presumptive heir, still had the trust of the company, and that he planned no changes to News Corp’s board of directors, which had been criticised as being insufficiently independent. “The board and I believe I should continue in my current role as chairman and CEO and make no mistake, [chief operating officer] Chase Carey and I run this company as a team and the strength of that partnership is reflected in our improved results,” Mr Murdoch said.
Rupert Murdoch said there were no plans for any further leadership changes at News Corp in the wake of the phone-hacking scandal that has torn through his UK newspapers division, the FT reports. In a defiant performance during the company’s fourth-quarter earnings briefing call with analysts and the media, Mr Murdoch said the board supported him staying on as chief executive, that his son James, the presumptive heir, still had the trust of the company, and that he planned no changes to News Corp’s board of directors, which had been criticised as being insufficiently independent. Mr Murdoch was more lucid about News Corp’s operations and more combative towards questioners than he was last month before the UK parliament, says Reuters.
Stuart Kuttner, the man who held the purse strings at the News of the World throughout the period when the private detective responsible for hacking mobile telephones worked for it, was arrested and bailed on Tuesday by police investigating the newspaper. The FT says Mr Kuttner has been in poor health, according to two friends. He the managing editor of Rupert Murdoch’s Sunday tabloid from 1987 to 2009. He was being questioned at a London police station about phone hacking and corrupt payments to police officers.