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Entries in Rupert Murdoch (17)

Friday
Jun292012

News Corporation to Split Its Publishing, Entertainment Divisions

WILLIAM WEST/AFP/Getty Images(NEW YORK) -- Rupert Murdoch, chairman of News Corporation, the $60 billion media conglomerate, announced Thursday morning that the company would divide its publishing and entertainment divisions into two separate businesses.  Whether the former will be able to survive without the latter is up for debate.

"There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corporation's businesses to grow to new heights, and enable each company and its divisions to recognize their full potential -- and unlock even greater long-term shareholder value," Murdoch, who will remain chairman of both companies, as well as chief executive of the entertainment company, said in a statement.

Investors had been gunning for this for a long time.

"With the whole phone hacking scandal from last year it became clear that it would make the most sense to split the business off," said Michael Corty, an equity analyst with Morningstar, Inc., in Chicago.  "Splitting is a good thing for shareholders."

It also made fiscal sense: News Corp's. publishing arm -- which includes books and newspapers including The Wall Street Journal, The Times of London and The New York Post -- only generates about 10 percent of the operating profits.

The other 90 percent comes from the entertainment holdings, which counts Fox Broadcasting, Twentieth Century Fox Film, and STAR TV on its roster.  Though Corty believes the publishing arm will survive, "We think less of the publishing assets given the headwinds facing the newspaper operation in the U.S., the U.K., and Australia."

Consequently, "It's not splitting off into equals, like CBS and Viacom did," said Corty.  "It's a little more similar to Time Warner and AOL splitting up.  AOL was the unloved business and didn't fit into the rest of Time Warner."

Since 1990, businesses have been spinning off at a rate of about 50 per year.

The reasons vary.  Some, like AOL and Time Warner, are fairly disparate entities and had little in common in the first place.  Splitting them lets management focus exclusively on the new company.

Another reason companies spin off is because dividing up a company gives investors greater transparency and greater opportunity, said Jody Lurie, corporate credit analyst with Janney Capital Markets in Philadelphia.

"Some companies create better value separately than they do when they're together.  Or the stronger side of the business is getting pulled down by the weaker," Lurie said.

The hope is that the new company will drive up the stock price.

Copyright 2012 ABC News Radio

Wednesday
Apr252012

Murdoch Denies Influencing Politicians

WILLIAM WEST/AFP/Getty Images(LONDON) -- Rupert Murdoch appeared before a British inquiry about press standards Wednesday, as the parliamentary committee turned its attention to his political connections rather than the phone-hacking scandal that has roiled the company.

Murdoch, chairman and chief executive of News Corp., said he wanted to "put certain myths to bed," like that he used his newspapers for business motives or influenced political leaders during social meetings.

Commission Chair Lord Justice Brian Leveson and the commission counsel have questioned whether the Murdochs have been too close to British Prime Minister Cameron and Culture Secretary of State Jeremy Hunt.

News Corp. owns many of Britain's largest newspapers and about 8 percent of the company's revenues come from the U.K. Murdoch said News Corp.'s total annual revenue is about $34 billion. News Corp. owns Fox News Channel, The Wall Street Journal, and publisher HarperCollins, among other assets.

The Leveson inquiry has heard from more than 100 witnesses since evidence hearings began in November, the Guardian reported.

"I welcomed the opportunity because I wanted to put certain myths to bed," Murdoch said about the inquiry.

Lead Counsel Robert Jay of the Queen's Council grilled Murdoch about his opinions on, or interactions with, the last five prime ministers, starting with Margaret Thatcher.

"I've never asked a prime minister for anything," Murdoch told the inquiry, explaining that he prefers to talk about current national or global issues and not his business interests.

"Let me be quite honest, Mr. Jay," Murdoch said. "I enjoy meeting -- let's call them our leaders. Some impress me more than others. And I meet them around the world. And I could tell you one or two who particularly impressed me."

When Jay asked if the democratic process is distorted by his newspapers' public endorsements and support of politicians, Murdoch said "the perception certainly irritates me, because I think it's a myth."

A day earlier, James Murdoch said he told Cameron, leader of the Conservative Party, on Sept. 10, 2009 that The Sun newspaper, owned by News Corp., would endorse his party's election ambitions. James Murdoch denied the accusation that the endorsement helped get approval by Cameron's party for the BSkyB bid.

"I would never have made that kind of a crass calculation," James Murdoch said. "It just wouldn't occur to me."

James Murdoch explained interactions between News Corp.'s lobbyist and Hunt, who has been under pressure to explain his relationship with the firm as it tried to purchase British broadcasting company BSkyB.

On Tuesday, for the first time James Murdoch admitted speaking with Cameron during controversial efforts to buy control of BSkyB. He said he spoke with Cameron at a Christmas dinner in 2010 at the home of former editor of News of the World Rebekah Brooks, after the Tory leader had been elected prime minister. But James Murdoch said it was "a tiny side conversation ahead of a dinner."

"It wasn't really a discussion, if you will," James Murdoch said.

News Corp. has also been criticized over allegations of impropriety at its other newspapers.

In February 2012, five employees of British newspaper The Sun were arrested for allegedly making payments to public officials. Four former and current Sun journalists were held in January, the BBC reported.

The issue of phone hacking comprised only minutes of the four-hour-long hearing on Wednesday. The elder Murdoch condemned the practice again, saying, "I don't believe in using hacking."

"I don't believe in using private detectives or whatever," Rupert Murdoch said. "I think that's just a lazy way of reporters not doing their job, but I think it is fair, when people are held up as great, or had themselves held up as iconic figures or great actors, that they be looked at."

According to Hugh Tomlinson of the Queen's Council, the now-defunct News of the World allegedly hacked the phones of 4,791 people, from stars to crime victims, to get juicy stories -- all with the encouragement of top editors at the paper and aided by some in the police force.

Rupert Murdoch made a rare apology in British newspapers last year at a parliamentary hearing. The Murdochs appeared before a parliamentary committee last year for the first time, during which the elder Murdoch was attacked with a shaving cream pie.

The Murdoch name has been synonymous with News Corp. even before it was incorporated in 1979. Rupert Murdoch, the only son of Sir Keith Murdoch, took over his father's newspaper publishing business, News Limited, after the elder Murdoch passed away in 1952.

The Oxford-educated media mogul took over his father's newspaper business, News Limited, in his native Australia when he was 22, according to the BBC. Reportedly in good health since being diagnosed with "low grade" prostate cancer in 2000, he has formerly reportedly insisted that his eventual successor have the Murdoch name.

Murdoch published a full-page apology in British newspapers last year about alleged phone-hacking by journalists at his tabloid, the News of the World.

The 81-year-old Murdoch has six children, three of whom are directly involved in his media empire. Murdoch married Wendi Deng, 43, his third wife, in 1999. They have two young daughters, Grace and Chloe.

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Copyright 2012 ABC News Radio

Monday
Jan022012

Rupert Murdoch Joins Twitter, Likes Rick Santorum and Ron Paul

William West/AFP/Getty Images(NEW YORK) -- Rupert Murdoch opened a Twitter account under the handle @rupertmurdoch over the New Year’s holiday, and has already attracted more than 50,000 followers as of midday Monday. He’s started promoting some of his media properties, and already deleted at least one controversial tweet.

“Great oped in WSJ today on Ron Paul,” read one of his first tweets on Saturday (Murdoch’s News Corp. owns the Wall Street Journal). “Huge appeal of libertarian message.”

“Saw Fox film Descendants,” said another (Murdoch’s empire includes Fox). “Thank God, one to be proud of.”

Murdoch, now 80, has mostly kept his views to himself since the phone-hacking scandal that led to the closing of News Corp.’s London-based tabloid The News of the World, but News International--and Twitter chairman Jack Dorsey--both confirmed that @rupertmurdoch is the real Rupert Murdoch.

He was apparently on vacation when he started on Saturday, and complained that the pricey Caribbean island of St. Bart’s had “too many people.” He called Mike Bloomberg “New York’s best mayor in memory!” He had kind words for Rick Santorum: “Good to see Santorum surging in Iowa. Regardless of policies, all debates showed principles, consistency and humility like no other.”

After 17 tweets in two days, he wrote, “Back to work tomorrow. Enough idling!”

Copyright 2012 ABC News Radio´╗┐

Tuesday
Oct252011

Rupert Murdoch, Sons Draw Substantial Negative Vote

WILLIAM WEST/AFP/Getty Images(LOS ANGELES) -- A third of News Corp. shareholders voted against the election of Rupert Murdoch's sons to the board, the company reported Monday.

Although the sons will stay on the board in the wake of a phone-hacking scandal, the negative ballots are highly unusual in corporate America, where directors almost always win election with overwhelming pluralities.

The son with the most negative votes at 35 percent, James Murdoch, 38, deputy chief operating officer, was most closely linked to the wrongdoing at the company's London newspaper The News of the World, which shuttered amidst the scandal.  He testified before Parliament over the summer about his role and has been asked back a second time next month.

Lachlan Murdoch, 40, got a 34 percent negative vote, and Rupert himself tallied a 14 percent negative vote from shareholders.  There was little danger any of the Murdochs would be thrown off the board because the elder Murdoch controls 40 percent of the Class B voting shares.

But the non-Murdoch shareholders voted loudly for more oversight at the company, which owns such ventures as Fox News. According to the company, 67 percent of non-Murdoch shareholders voted against James and 64 percent against Lachlan.  Of those votes, three other directors didn't get a majority.

On Friday, when News Corp. held its annual shareholders meeting in Los Angeles, the company stated: "All Directors were elected, the advisory vote was in favor of executive compensation, and the other management proposals were approved.  The floor proposal regarding an independent Chair of the Board was not approved."

Copyright 2011 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

Friday
Oct212011

News Corp CEO Rupert Murdoch to Face Shareholders

WILLIAM WEST/AFP/Getty Images(LOS ANGELES) -- News Corp. CEO Rupert Murdoch may be taking some heat from shareholders on Friday when they get together for the company's annual shareholders meeting in Los Angeles.

Criticism is expected over the phone hacking scandal in Britain that forced News Corp. to close its best selling tabloid, The News of the World.  It is alleged that the newspaper hacked the phones of more than 4,000 politicians, crime victims and celebrities in an effort to get juicy stories.

During Friday's meeting, shareholders will also have the chance to vote on the company’s board members, including Murdoch and his sons, James and Lachlan.

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







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