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Entries in News Corp. (16)

Saturday
Mar172012

James Murdoch to Step Down from Board of Sotheby's Auction House 

Chris Ratcliffe/Getty Images (LONDON) -- News Corp. deputy chief operating officer James Murdoch will leave the board of Sotheby's auction house, Bloomberg News reports.

Murdoch's departure follows demands that he resign over his role in the U.K. phone-hacking scandal and is set to take place on May 8.

The 39-year-old son of billionaire media tycoon Rupert Murdoch already resigned from the board of GlaxoSmithKline Plc, and from his position as executive chairman of News Corp.’s News International publishing unit earlier this year.

Investors are also calling for him to leave as the chairman of British Sky Broadcasting Group Plc. and from the board of News Corp.

Copyright 2012 ABC News Radio

Friday
Oct212011

Rupert Murdoch and Sons Blasted By Shareholders

Jonathan Alcorn/Bloomberg via Getty Images(LOS ANGELES) -- Rupert Murdoch and his sons James and Lachlan got a dressing down from shareholders at the company's annual meeting Friday amid the fallout from a hacking scandal at its UK newspapers.

At the News Corp. annual meeting in Los Angeles on Friday, shareholders had time on the floor to voice their opinions in favor of new board oversight for the media conglomerate. A proxy vote on whether to retain the current directors, including the Murdochs, was being counted Friday afternoon.

Representatives from the Christian Brothers Investment Service, the Church Commissioners of England and the California Public Employees' Retirement System (Calpers) made the requests in front on the meeting floor.

"It is an investment risk to have a weak board with a conflicted chairman," Julie Tanner assistant director of socially responsible investing for Christian Brothers Investment Services, said. The organization manages about $4 billion for Catholic institutions.

Rupert Murdoch was both courteous and combative, telling one disgruntled investor: "I hate to call you a liar but I don't believe you."

Tom Watson, a member of Britain's Parliament in the Labour Party who has led investigations into the phone-hacking allegations, attended the meeting by obtaining a shareholder proxy.

Watson said he hoped Murdoch "would respond to some of the independent investors, readers and customers" in the U.K. and "put this right."

Murdoch reiterated his regret over the hacking scandal.

Murdoch said he wanted "to reaffirm the seriousness of what is going on in London as well as putting the controversy in context" though "there is simply no excuse for such unethical behaviors." He said the company has been under both "understandable scrutiny and unfair attack."

The Murdoch family owns 40 percent of the company, though some shareholders have urged others not to re-elect Rupert Murdoch, founder, chairman and CEO, and his sons who sit on the 15-person board.

Murdoch's son, James, oversees the company's operations in Europe and Asia. The company has been under investigation regarding phone-hacking scandal allegations against its former tabloid newspaper in London, News of the World, which closed on July 7 in the media spotlight.

Though the News of the World closure was at financial cost to the company, Murdoch said it was the "right thing to do" which is "why we have devoted so many resources to get to the heart of this matter." He said the company is fully cooperating with the Metropolitan police in London and other authorities.

Simon Dumenco, media columnist for Advertising Age, said it is a "lose-lose situation" for News Corp.

"If the Murdochs are reelected to the board, the company's credibility is further trashed and the parties that have been calling for James and Lachlan and even Rupert to step down will be livid. If the Murdochs are forced off of the board, News Corp. has to admit that the whole company -- which has always revolved around the whims of Rupert -- is in disarray and now faces an incredibly uncertain future."

David Bank of RBC Capital Markets said it would have taken "extraordinary momentum" by the opposition to not re-elect the three Murdochs.

"If they remove the Murdoch board members it would be to punish the actions of past rather than react to commitments for the future," he said, adding that Wall Street is not as interested in the issue of re-election to the board.

Jeffrey Logsdon, analyst with BMO Capital markets said he agrees there was a high probability Murdoch will be re-elected because he controls over 40 percent of the vote and "the opposition has been fairly civil." He said some investors have for years resisted the notion that a family member will succeed Rupert Murdoch as chairman one day.

"Some have looked at the issues out of the U.K. as a last straw," Logsdon said. "Some just don't line up well politically with Mr. Murdoch or the Fox News perspective. Perhaps the compounding effect might make it "closer"?"

Logsdon said investors do not usually show their concern about management through elections.

"They vote by selling their stock," Logsdon said.

Copyright 2011 ABC News Radio

Monday
Oct172011

Some Investors Call for Rupert Murdoch to Step Down as News Corp Chair

WILLIAM WEST/AFP/Getty Images(LOS ANGELES) -- A chorus of investors is calling for a house-cleaning of the board at Rupert Murdoch's News Corp. ahead of the company's annual meeting in Los Angeles later this week.

The Murdoch family owns 40 percent of the media conglomerate, though some shareholders have urged others not to re-elect Rupert Murdoch, founder, chairman and CEO, and his sons who sit on the 15-person board.

Murdoch's son, James, oversees the company's operations in Europe and Asia. The company has been under investigation regarding phone-hacking scandal allegations against its former tabloid newspaper in London, News of the World, which closed on July 7 amid the headline-making scandal.

Proxy advisory firm Institutional Shareholder Services (ISS), whose clients are investors including pension and mutual funds, recommended that shareholders vote against the re-election of 13 News Corp. board members at the board meeting Friday in Los Angeles.

ISS said in its report: "The company's phone hacking scandal, which began its public denouement in July 2011, has laid bare a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs."

ISS also made negative recommendations against certain members of the News Corp. board in 2005, 2008 and 2009.

In response, News Corp. issued a note to stockholders on Oct. 11 defending the 15 directors, re-elected annually, and the other proposals in the company's proxy statement for 2011.

News Corp. said ISS' "disproportionate focus on the News of the World matter is misguided."

"Our litigation exposure to the News of the World matter could affect News Corporation's results of operations and financial condition, and we are taking this matter very seriously," News Corp. stated to shareholders. "However, our broad, diverse group of businesses across the globe is extremely strong today."

According to published reports over the weekend, The California State Teachers' Retirement System (CalSTRS) as well as the California Public Employees' Retirement System (Calpers) have called for the Murdoch family to step down from the board.

Glass Lewis & Co., another proxy advisory firm, said shareholders should vote against James and Lachlan Murdoch and four other directors, adding that the company needs a more independent board.

Britain's Local Authority Pension Fund Forum is also asking that Rupert and James leave.

A spokeswoman for News Corp. and a spokesman for ISS declined to comment.

Despite the clamor, David Joyce, analyst with Miller Tabak + Co., said it is "highly likely" shareholders will re-elect Rupert Murdoch.

"His sons James and Lachlan are more of a question mark," Joyce said.

Jeffrey Logsdon, analyst with BMO Capital markets, said he agrees there is a high probability Murdoch will be re-elected because he controls over 40 percent of the vote and "the opposition has been fairly civil." He said some investors have for years resisted the notion that a family member will succeed Rupert Murdoch as chairman one day.

"Some have looked at the issues out of the U.K. as a last straw," Logsdon said. "Some just don't line up well politically with Mr. Murdoch or the Fox News perspective. Perhaps the compounding effect might make it "closer"?"

Logsdon said investors do not usually show their concern about management through elections.

"They vote by selling their stock," Logsdon said.

Copyright 2011 ABC News Radio

Friday
Sep022011

News Corp.'s James Murdoch Turns Down $6 Million Bonus

WILLIAM WEST/AFP/Getty Images(LONDON) -- James Murdoch, News Corp. deputy COO and son of mogul Rupert Murdoch, Friday declined a $6 million bonus awarded to him, according to The Guardian.

News Corp.'s annual financial statement to shareholders stated the younger Murdoch and his father received hefty cash bonuses raising their 2010 take home pays by 74 percent and 47 percent, respectively.  Rupert Murdoch, News Corp. chairman and chief executive received a $12.5 million bonus, according to the financial documents.

James issued a statement Friday, in which he declined the bonus due to "current controversy," and stated he might consider whether to accept a bonus at a later time.

"In light of the current controversy surrounding News of the World, I have declined the bonus that the company chose to award to me.  While the financial and operating performance metrics on which the bonus decision was based are not associated with this matter, I feel that declining the bonus is the right thing to do," the statement read.  "I will consult with the Compensation Committee in the future about whether any bonus may be appropriate at a later date."

James Murdoch will likely still take home a $11.9 million salary for the year despite News Corp.'s failed attempt to acquire BSkyB, according to The Hollywood Reporter.  The deal fell through in the wake of the News of the World hacking controversy.

On Friday the number of people arrested in connection to the phone-hacking scandal rose to 15, The Guardian reports.

Copyright 2011 ABC News Radio

Friday
Jul222011

Consumers Make Cellphone Hacking Easy

Jupiterimages/Thinkstock(NEW YORK) -- The phone hacking scandal that led to the demise of News of the World and put News Corp. CEO Rupert Murdoch in the hot seat highlights just how easy it is for predators to break into cellphones.

Your phone can be hacked two ways: "hacking into your cellphone as you're on the phone or hacking into your voicemail," says Mark Rasch, director of cybersecurity and privacy consulting at Computer Sciences Corp.

The first method -- breaking into your phone while you're talking on it -- is difficult, says Rasch.  A hacker would need to hack into your cellphone provider or corrupt an employee who works for the company to listen in on a conversation.

The second method -- breaking into your voicemail -- is not so tough.  It involves installing a program that would allow the hacker to capture and intercept phone calls.

"It is very easy to do, and that's typically because voicemail is secured with a short four digit number.  It can be hacked, spoofed, guessed and social engineered," says Rasch.

What makes it so easy?  Blame yourself.  Most people choose simplistic passwords that are easy for hackers to guess.

"The most common pass code is the last four digits of your phone number," says Rasch.

"People want something easy to remember and easy to type at 75 miles per hour with a cup of coffee in the hand and the cellphone in the other," says Rasch. "They'll pick the same pin number for ATM, cellphone and a dozen other things.  It's just human nature."

To avoid these pitfalls, some say passwords should be automated or randomly selected.

"You shouldn't be able to pick your password or pass code," says Daniel Amitay, an iPhone developer.  "It should be randomized.  The problem with pass codes and passwords is people pick them."

All eyes have been trained on News Corp. in recent weeks, following allegations that the now-defunct News of the World hacked the phones of more than 4,000 politicians, crime victims and celebrities.

But at the center of the firestorm was Milly Dowler, a 13-year-old murder victim whose cell phone was hacked by journalists on the hunt for a big scoop.  When the teenager disappeared in early 2002, reporters allegedly listened to the dead girl's voicemail and deleted messages on the system, tainting the investigation and creating false hope among the victim's family members that she might still be alive.

While it's unclear exactly how the reporters gained access to Milly Dowler's voicemail, one lesson emerges: it wasn't too hard.

Copyright 2011 ABC News Radio

Wednesday
Jul202011

Rupert Murdoch's Testimony 'Saved' News Corp Stock, Analyst Says

WILLIAM WEST/AFP/Getty Images(LONDON) -- A foam pie-slinging Parliament hearing, accusations of nepotism, speculation about a CEO shakeup and a phone hacking scandal won't sink News Corp. stock, if the market is any indication.

Rupert Murdoch's testimony to the U.K. parliament Tuesday "clearly saved the stock," wrote David Joyce, a media analyst at Miller Tabak & Co., in a statement to ABC News.

Murdoch told parliament the phone hacking probe was the "most humble day of my life."  But he also said that the scandal was not his fault -- he placed the blame on people within the company that he trusted, and the people they hired.

"We have broken our trust with our readers," Murdoch said during his morning testimony.

The patriarch of the Murdoch family ran an ad over the weekend apologizing for "serious wrongdoing."  The 80-year-old promised to take "concrete steps to resolve these issues and make amends for the damage they have caused."

Will that be enough?

"By Rupert not taking responsibility per se but offering harsh words for the activism and vigilance against any further... Also, his age showed, and a succession plan with Chase Carey possibly becoming CEO helped the stock," Joyce said.

According to media reports, there is speculation that COO Chasey Carey could take the reins from Murdoch as chief executive officer at the media company.

"People expect that this might give shareholders that are not Rupert Murdoch the ability to have some say in the company or the ability to change things or that the stock performance is going to have any say in the way Murdoch runs the company.  People are fooling themselves," said Malcolm Polley of Stewart Capital.  "Even if he gives up the CEO position, the reality is Rupert Murdoch is still going to control the destiny of News Corp."

In a turnaround, the company's stock price regained some of its value, closing at $15.94 Tuesday.

Copyright 2011 ABC News Radio

Tuesday
Jul192011

Murdoch Scandal: Feds to Investigate Extent of Hacking, Bribes

File photo. Chairman of News Corporation Rupert Murdoch with Former Chief Executive of News International Rebekah Brooks in London. MAX NASH/AFP/Getty Images(WASHINGTON) -- The Justice Department is preparing to launch a preliminary investigation into whether News of the World officials engaged in a systemic conspiracy to pay bribes to British police, ABC News has learned.

If that can be established, department officials will have to determine whether News Corp., the parent company of News of the World, violated the Foreign Corrupt Practices Act (FCPA) and whether charges should be brought against the company.

The revelation suggests that the Justice Department's look at News Corp. will reach beyond allegations that News of the World employees hacked the phones of 9/11 victims and their families, which is being investigated by the New York field division of the FBI.

Critical questions involve how many British police officials were involved, how much money was allegedly paid out by News Corp. to bribe them and whether it was a widespread pattern and corporate practice.

Department officials plan to seek the cooperation of British authorities immediately to see what Scotland Yard has turned up.

The Justice Department has brought bribery charges against major corporations before under the FCPA. But those cases have typically involved bribes on a massive scale.

Under the FCPA, federal prosecutors do not have to prove that illegal activity occurred within the United States, but only that a company that is publicly traded in the United States engaged in broad crimes overseas.

The planned Justice Department inquiry comes after a number congressional leaders demanded it review whether News Corp. violated the FCPA. Department officials are also reviewing whether the allegations of widespread hacking -- if proven -- constitute a violation of the law.

Copyright 2011 ABC News Radio

Tuesday
Jul192011

Amid Hacking Probe, LulzSec Hacks News Corp.-Owned Website

WILLIAM WEST/AFP/Getty Images(LONDON) -- After calling it quits three weeks ago following 50 days of high profile hacks that included PBS, Sony, and Nintendo -- among others -- the hacker group LulzSec has struck again. This time, the group set it sights on Rupert Murdoch's News Corp., amid the fallout from Murdoch's News International phone hacking scandal.

In the first cyber attack against a major U.K. newspaper’s website, LulzSec reportedly hacked the site of the News International-owned The Sun early Tuesday morning, local time. The site address redirected visitors to a story reporting Murdoch’s death on The Times of London site. The story suggested Murdoch had intentionally ingested poison to take his own life.

LulzSec claimed on their Twitter account that they were "sitting on their [The Sun's] emails" and that they would release the emails on Tuesday. They also claimed to know Rebekah Brooks' email password.

News International's corporate web page went down on Tuesday as a result, and The Times of London website faced issues loading. It is unclear whether News Corp. disabled those sites.

Copyright 2011 ABC News Radio

Wednesday
Jul132011

Dem. Senators Call for US Probe of Allegations against News Corp.

WILLIAM WEST/AFP/Getty Images(WASHINGTON) -- Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and Sen. Barbara Boxer, D-Calif., called Wednesday for a probe of the wiretapping allegations against News Corp. in the phone hacking scandal.

In a letter to Attorney General Eric Holder and Securities and Exchange Commission Chairman Mary Schapiro, the two Senators say that it is important to find out if any U.S. citizens were “victimized.”

“The reported allegations against News Corporation are very serious, indicate a pattern of illegal activity, and involve thousands of potential victims,” the letter states. “It is important to ensure that no United States laws were broken and no United States citizens were victimized.”

The Senators also reference the allegations that News Corp. employees may have illegal accessed the phone records of victims the September 11th attacks.

The full text of the Senators’ letter is below:

Dear Attorney General Holder and Chairman Schapiro:

We write to request that the U.S. Department of Justice and the Securities and Exchange Commission investigate whether News Corporation, a U.S.-based corporation, has violated United States law - specifically the Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§78dd-1, et seq.)  

As you know, senior officials of News Corporation subsidiaries have recently been arrested on allegations that they bribed members of London’s Metropolitan Police to gain access to private information.  If these allegations are true, they may constitute a violation of the Foreign Corrupt Practices Act, which prohibits corrupt payments intended to influence any act or decision of a foreign official.  

There have also been allegations that News Corporation employees may have illegally accessed the phone records of victims of the attacks of September 11, 2001.  We urge you to investigate whether any United States citizens had their privacy violated by this alleged hacking.  

The reported allegations against News Corporation are very serious, indicate a pattern of illegal activity, and involve thousands of potential victims.  It is important to ensure that no United States laws were broken and no United States citizens were victimized.    

Sincerely,

Barbara Boxer
United States Senator

John D. Rockefeller, IV
United States Senator

Copyright 2011 ABC News Radio

Wednesday
Jun292011

News Corp. Sells MySpace for $35 Million; Justin Timberlake Now On Board

MySpace dot com(LOS ANGELES) -- News Corp. has sold its ailing social media site, MySpace, to Specific Media for a reported $35 million after buying it for $580 million six years ago.

Specific Media, a California-based company that helps firms buy advertising across the Web, confirmed the purchase in a press release, saying News Corp. would take a minority equity stake in Specific Media. It called MySpace "a recognized leader that has pioneered the social media space."

It did not reveal what it paid for the site, but AllThingsD, which first reported the sale, said the price was $35 million.

Justin Timberlake will also take a stake in the website, according to The Hollywood Reporter.  Timberlake will reportedly assist Specific Media in developing a new creative strategy for MySpace.  The Hollywood Reporter says the social media site is expected to take a more music-centered direction.

“There’s a need for a place where fans can go to interact with their favorite entertainers, listen to music, watch videos, share and discover cool stuff and just connect. Myspace has the potential to be that place,” said Timberlake in a statement. “Art is inspired by people and vice versa, so there’s a natural social component to entertainment. I’m excited to help revitalize Myspace by using its social media platform to bring artists and fans together in one community.”

Significant job cuts are also expected at MySpace. The site was an early leader in social media but has lost out to Facebook and Twitter.

When News Corp. bought MySpace in 2005, it bested rival bidder Viacom for what was then a highly contested property.

In August 2005, MySpace had about 22 million visitors a month in the U.S., compared to eight million for Facebook, according to numbers from the measurement firm ComScore.

Currently, Facebook has about 157 million U.S. visitors a month, while MySpace has just fewer than 35 million.

Copyright 2011 ABC News Radio







ABC News Radio