Jim Kennedy had joined Sony Pictures in 2005 after working as a Deputy Assistant to the President and Deputy Press Secretary to President Bill Clinton and as head of communications for the White House Counsel’s office, Vice President Al Gore, Sens. Hillary Clinton and Joe Lieberman, the Connecticut Attorney General’s office, and the Clinton Foundation. He has been overseeing media relations for SCA at Sony’s New York headquarters since October 2011. Here’s today’s release about him running communications at the “new” News Corp:
Shares are down about 2.7% in postmarket trading after News Corp reported disappointing results for the quarter ended September 30. The company generated net income of $38M, up from an $83M loss in the period last year, on revenues of $2.07B, -2.9%. Analysts expected revenues to come in at $2.2B. Earnings at 5 cents a share matched the consensus forecast. The News and Information Services unit — which includes The Wall Street Journal — was hit hardest, with revenues -10% to $1.5B. The Australian newspapers weighed on the results, with revenues -22% accounting for a majority of the decline. But the company says it also saw “moderating declines at Dow Jones and News UK.” Ad sales fell 12%, and circulation was -6%. In Book Publishing, which includes HarperCollins, revenues fell 7% to $328M. News Corp says e-book sales were up 30%, accounting for 22% of revenues, but were offset by the company’s divestiture of the Women of Faith live events business and softness in Christian publishing. Revenues would have fallen 5% without the one-time changes and fluctuations in foreign exchange rates.
The company had to expand the size of board to 14 to add Jonathan Miller — who was News Corp’s Chief Digital Officer from 2009-2012 and now is a partner at investment firm Advancit Capital. He’ll serve on AMC Networks‘ Audit Committee, and represent owners of the publicly held Class A shares as opposed to the Class B ones controlled by Charles and James Dolan. Before joining News Corp, Miller was a founding partner of Velocity Interactive Group and served as CEO of AOL from 2002-2006.
News Corp has paid out nearly $200 million in the past year alone in settlements related to the ongoing phone hacking scandal. Late last week, the company made it very clear that it doesn’t intend to make a payment to Eunice Huthart, a former body double for Angelina Jolie. In a June civil complaint, Huthart became the first person to file a hacking-scandal suit against News Corp and its UK press arm News International in the U.S. On September 20, News Corp filed back, asking the federal court to dismiss Huthart’s privacy violations case on a series of grounds. “The Court should dismiss the complaint on the grounds of lack of personal jurisdiction and failure to state a claim. But it need not even reach those issues — instead, the Court should dismiss this lawsuit under the doctrine of forum non conveniens with instructions that it be re-filed, if at all, in the United Kingdom,” said the motion by the company (read it here). A hearing in the case is scheduled for January 6.
It’s hard to say that the write-down hurt the publishing operation for the fiscal year that ended in June. The noncash charge, disclosed today in the company’s first annual report since being separated from Rupert Murdoch‘s Fox entertainment assets, is an improvement over the $2.6B charge it took last year. All told, News Corp ended the year with net income of $506M, up from a $2.1B loss last year, on revenues of $8.9B, +2.7%. The revenue figure is short of the $8.96B that analysts anticipated. Earnings at 87 cents a share beat forecasts for 57 cents. The uptick in revenues reflects News Corp’s consolidation of Fox Sports Australia and acquisition of publishing company Thomas Nelson, and includes contributions from the introduction in February 2012 of the Sunday edition of UK’s The Sun. But ad sales overall fell by 7.4% cutting the revenue contribution of the Australian newspapers by $350M, and Dow Jones — which includes The Wall Street Journal — by $76M. The slowdowns were a factor in News Corp’s impairment charge which it says reflects its diminished assessment of the prospects for the News and Information Services businesses in Australia and the U.S. News Corp share prices rose 1% in after-market trading.
I don’t know whether Rupert Murdoch was familiar with Southeastern Asset Management and its billionaire CEO O. Mason Hawkins before today — but I can assure you that he is now. The Memphis-based investment firm says in an SEC filing that it bought 11.9% of News Corp, the publishing company that Murdoch created in June with a spin off that collected his entertainment holdings at 21st Century Fox. There’s no indication in the filing about Hawkins’ plans for the 23.77M shares his firm controls. Although SAM isn’t known as an activist investor, Hawkins recently allied with Carl Icahn to oppose Michael Dell’s effort to take Dell Computers private. (Icahn this week abandoned his campaign to stop the leveraged buyout.). In a mid-year report to his investors, Hawkins said that most of the companies in which he invests and their CEOs “remain low profile because they deliver results over time.” He added, though, that when he believes new leaders would do a better job “Southeastern and their boards will hold these leaders accountable.” SAM is also a major investor in DirecTV, Scripps Networks, Tribune, and Warren Buffett’s Berkshire Hathaway, but early this year bailed out of Disney.
NEW YORK– News Corp (NASDAQ: NWS, NWSA; Temp. ASX tickers: NNC, NNCLV) announced today that it has sold the Dow Jones Local Media Group, which operates 33 publications, including 8 daily and 15 weekly newspapers, to an affiliate of Fortress Investment Group LLC.
The Dow Jones Local Media Group daily newspaper franchises include the Times Herald-Record (Middletown, N.Y.); Cape Cod Times (Hyannis, Mass.); The Record (Stockton, Calif.); The Standard-Times (New Bedford, Mass.); The Pocono Record (Stroudsburg, Penn.); The Herald (Portsmouth, N.H.); The Mail Tribune (Medford, Ore.), and The Daily Tidings (Ashland, Ore.). In addition to daily and weekly newspapers, the Dow Jones Local Media Group operates other print and online community media, including web sites, magazines as well as news and advertising niche publications.
UPDATE, 1:40 PM: “There has been rampant speculation surrounding my departure from Fox that I am not addressing at this time…I will say it has been an honor and privilege to work for Roger Ailes the past 20 years and I wish nothing but the best for him and the great people at Fox News,” FNC’s ousted EVP Corp Communications Brian Lewis told TVNewser this afternoon. Other than that, he had nothing to say, except to single out one press report about his exit as “particularly ludicrous” without elaborating, the site reported. Lewis’s exit has been linked to Gabriel Sherman’s upcoming book on Ailes and Fox News by various sources, including Politico and Matt Drudge. Sherman’s take on Lewis’s ouster, for New York Magazine, suggests Ailes had begun leaning more heavily on people other than Lewis for strategic advice. Sherman said that, in April of ’12, Lewis told him he’d been “overruled” a few days after the Fox News mole story broke in Gawker, as to how the network should react; Lewis told him FNC planned to sue Gawker and might try to have the mole arrested, Sherman wrote. Sherman also reported Lewis called Bill O’Reilly a “chucklehead,” in reference to a photo Gawker unearthed during its Gawker/mole period.
PREVIOUS: “Financial Irregularities” — that’s the intriguing reason given by Fox News Channel, which said today it terminated its EVP Corporate Communications and longtime Roger Ailes confidante Brian Lewis last month. “After an extensive internal investigation of Brian Lewis’ conduct by Fox News, it was determined that he should be terminated for cause”, the network said in a statement, citing also “multiple, material and significant breaches of his employment contract”. Fox News said Lewis was “terminated for cause” on July 25, but word of his departure leaked out today.
News International, the British newspaper division of News Corp which was recently renamed News UK, is being actively investigated by Scotland Yard, say reports from Reuters and The Independent. The probe is said to be seeking possible criminal violations related to the phone-hacking scandal at the now defunct News Of The World as well as allegations of illegal payments to public officials by journalists. Since 2011, police attention has appeared focused on employees of the Rupert Murdoch-controlled businesses, but The Independent says investigators are treating News International as a “corporate suspect.” Reuters, quoting a source familiar with the matter, said detectives and prosecutors are also actively considering action against News Corp as a corporation. Were corporate action to be taken, Reuters opines, it would lead to more expense for News Corp as well as potentially further tarnishing its image. If company directors or executives were held accountable, it could impact News Corp’s ownership of BSkyB since broadcast license holders have to be deemed “fit and proper.” However, BSkyB no longer has ties to the press business, having become part of the entertainment company after News Corp split into two entities. According to the reports, News Corp’s Management and Standards Committee was informed more than a year ago that action was being considered. The reports say it was this revelation that led News Corp to scale back its cooperation with …
Global Showbiz Briefs: FoxCrime Launches In Africa; News Corp Seals Mobile Deals For Soccer In Asia; More
FoxCrime Channel Infiltrates South Africa
Fox International Channels announced the South African launch of its global crime and investigation entertainment network, FoxCrime. The launch adds 1.6 million subscribers to the brand’s 25 million existing global households. The South African FoxCrime schedule combines FIC original co-productions such as The Bridge with franchise acquisitions including Criminal Minds, CSI and Blue Bloods. The channel also boasts a Classic Crime block that launches with NYPD Blue, Remington Steele, CHiPs and The Streets of San Francisco and includes an African-focused slot entitled Case Files: Africa, covering infamous crime stories from across the Continent.
News Corp Secures Exclusive Mobile, Internet Soccer Rights
News Corp said Monday that it has secured exclusive mobile and Internet clip rights for England’s Barclays Premier League and several additional major leagues in Japan, Vietnam and Indonesia beginning this month. In addition, mobile and Internet rights have been secured in those territories for Bundesliga (Germany), Ligue 1 (France), Serie A (Italy), FA Cup (England), Championship (England), Capital One Cup (England), Brazilian Championship, and Major League Soccer.
News Corp announced today plans to move its entire London operations to a single location in The Place on the south bank of the Thames River. The locally based businesses and staff of News UK, Dow Jones and HarperCollins will be housed together for the first time and will begin relocating to the new site in the summer of 2014.
“Our new London location in the vibrant borough of Southwark will allow us to realize one core objective as the new News – to work more closely and creatively, and leverage our collective resources,” said Robert Thomson, Chief Executive of News Corp.
The Place resides alongside The Shard at the heart of the London Bridge Quarter, a major redevelopment surrounding one of the best-connected travel hubs in the UK. The project is an important part of the redevelopment of south London, contributing to the further regeneration of the local area, and is a significant milestone for the capital.
UPDATE: News Corp Says Rupert Murdoch Accepts Invitation To Appear Before UK Parliament To Discuss Secret Tape
UPDATE, 2:30 PM: It looks like the UK Parliament’s committee will get its wish. A News Corp spokesman has said Rupert Murdoch will accept their invitation. “Mr Murdoch welcomes the opportunity to return to the select committee and answer their questions. He looks forward to clearing up any misconceptions as soon as possible.”
PREVIOUS, 10:46 AM: The secret recording of Rupert Murdoch addressing Sun staffers at a meeting last March has incited Parliament’s Culture, Media and Sport Committee to extend an invitation to the News Corp chief. “We’re inviting him to return to give evidence,” a spokesperson tells Deadline, and “to discuss” the “supposedly secretly recorded set of comments.” Those comments included Murdoch talking about his company’s handling of bribery and hacking charges. Any evidentiary hearing before the committee would be an official one, but there’s an interesting aspect to the panel’s wording: Murdoch is being invited, not compelled, to appear. Conversely, Murdoch was indeed summoned in July 2011 when the News Of The World hacking scandal was blowing wide open. Still, if Murdoch accepts the invitation, it is unlikely he would appear anytime soon. The House of Commons is about to go into summer recess until September when it reconvenes for two weeks and then closes down again for three weeks before opening again in October. I’m told it would be a “safe assumption” that there will be no further movement until …
This is an interesting addition for Advancit Capital, the investment firm launched two years ago by Shari Redstone, who runs National Amusements and happens to be the daughter of (and could be a successor to) Viacom and CBS Chairman Sumner Redstone. Jonathan Miller is a big league player: He was considered for the top job at Yahoo last year after having served as News Corp’s Chief Digital Officer, CEO of AOL, and founding partner of investment company Velocity Interactive Group. He’s now a partner at Advancit, which focuses on early stage investments. “Against this backdrop of rapid evolution in the digital media space, we’re here to help great entrepreneurs build amazing companies,” Miller says today. In addition to investing cash, Advancit says it looks for opportunities to help “talented and passionate entrepreneurs” in media, entertainment and tech by offering a “deep network of industry relationships and strategic support.”
UPDATE: News Corp Defends Rupert Murdoch After Secret Tape Shows Him Acknowledging UK Bribery: Video
UPDATE, 4:15 PM: News Corp has just released a second statement that more directly defends Rupert Murdoch against the UK revelations today (see the Channel 4 report below). Here’s the statement: “Mr. Murdoch never knew of payments made by Sun staff to police before News Corporation disclosed that to UK Authorities. Furthermore, he never said he knew of payments. It’s absolutely false to suggest otherwise.”
PREVIOUS, 3:16 PM: “I don’t know of anybody, or anything, that did anything that wasn’t being done across Fleet Street and wasn’t the culture. And we’re being picked on,” Rupert Murdoch told journalists at UK’s The Sun in March in a secretly recorded conversation about his company’s handling of bribery and hacking charges. The recording was disclosed today with a full transcript on the website Exaro as well in a report on the UK’s Channel 4. It shows Murdoch alternately angry and sympathetic as he assured staffers that he “will do everything in my power to give you total support, even if you’re convicted and get six months or whatever. I think it’s just outrageous.” Regarding “payments for news tips from cops: that’s been going on a hundred years, absolutely. You didn’t instigate it.” He added that “the worst thing that’s going to happen is that some of you will be charged shortly, and some of you will be released shortly. And the bulk of you will be made aware after three or four months. It’s just disgraceful that they’re [the police] doing, but we’ll see.” The News Corp chief assured one staffer that the company Management and Standards Committee hasn’t “given [police] anything for months.” Later he added that the committee “has told the police…No, no, no — get a court order. Deal with that.”
Rupert Murdoch‘s business empire started a new chapter at 4:30 PM ET. The corporate entity that used to house all of his biggest assets became 21st Century Fox. It keeps the main movie and TV properties. Murdoch, who will remain its CEO, calls Fox “a unique force” that will have “a commitment to empowering creative minds and entrepreneurs around the world” — and pay off for shareholders. His newspaper and publishing operations, and several Australian businesses, are part of a new company that inherits the News Corp name. Murdoch — who controls about 40% of the voting shares of both companies — is the chairman. The new CEO, Robert Thomson, says News Corp has “a robust balance sheet and a team of creative, energetic and passionate employees who are determined to make the company a resounding success and to make a positive difference in their communities.” Beginning on Monday, Fox’s two classes of shares will trade on NASDAQ as FOXA and FOX, while News Corp also will have two classes of shares, NWS and NWSA. In its last day of trading, the old News Corp closed at $32.58, giving the company a market value of $75.4B.
Global Showbiz Briefs: Battle For Kabel Deuschland; Spain Box Office Plunges; Oz News Corp Stock Bow Disappoints; More
Vodaphone Ups Ante In Fight For Germany’s Kabel Deutschland
It looks like a battle is brewing for Germany’s largest cable group, Kabel Deutschland. Vodafone has raised its preliminary offer to about €7.5B ($10.1B), Bloomberg sources said. That’s €85 a share compared to the €80-€82 offer that was initially rejected by Kabel. But it’s equal to a preliminary offer made by John Malone’s Liberty Global. Financial Times, meanwhile, reports that Liberty is structuring its bid to offer assets as opposed to cash. Sources told the paper that Liberty, which recently acquired the UK’s Virgin Media for $23.3B, has proposed injecting its existing German cable assets and keeping Kabel’s public listing. This would help circumvent regulatory concerns about combining Germany’s two biggest cable companies. Liberty owns the No. 2 cable outfit, Unitymedia. However, an all-cash offer could have better chances of being approved, a source told Bloomberg.
Spain Box Office Has Worst Weekend Ever, Down 25% Year-Over-Year
Spanish box office has suffered acutely in the first half of the year. Last weekend was the worst in the nation’s history with only 347,000 tickets sold for €3.7M. That’s 25% off the same weekend last year, according to reports. According to El Pais, Pedro Perez, head of the Spanish producers union FAPAE, said the industry is in “a panic.”
For those into the minutae: News Corp‘s nearly separated entertainment assets to be known as 21st Century Fox are worth about $65B and the new News Corp’s publishing arm is worth about $9.1B, according to Bloomberg. That’s based on “when-issued” trading that began today on the Nasdaq that eventually will set stock prices and values for the two companies when they officially split June 28. Class A shares of 21st Century Fox finished the day at $28.35, while shares of the publishing arm (to be called News Corp) ended at $15.80. The still-trading combined News Corp stock finished up a tick at $32.34 — $11.81 less than the total of the two companies-to-be.
Eunice Huthart, a former body double for Angelina Jolie, has become the first person to file a phone-hacking lawsuit against News Corp. in the U.S. Huthart, a British national whose most recent credit is as stunt coordinator on Disney’s upcoming Jolie-starrer Maleficent, filed a civil complaint (read it here) against News Corp, and its UK press arm News International, in federal court on June 13 alleging right to privacy violations. Those include “intrusion into, interception of and interference with” voicemail messages left on her phone while she was working as a double for Jolie in the U.S. in 2005. The suit seeks damages for violations of federal and California laws.
The upshot of the so-called stockholder rights agreement that the company initiated today is that Rupert Murdoch can make it prohibitively expensive for someone he doesn’t like to buy News Corp‘s soon-to-be-created publishing company (which will retain the News Corp name) or the entertainment one (to be called 21st Century Fox). The terms enable either company to flood the market with shares, which News Corp investors as of June 21 can buy at half price, if a hostile bidder acquires 15% of the stock. Murdoch also can buy shares to keep his voting stake at about 40%. News Corp says that the anti-takeover plan — popularly known as a “poison pill” — is “intended to protect the stockholders” from a move that directors of either new company deem to be “not in the best interests of the companies and their respective stockholders.” But it leaves open the possibility of a “merger, tender or exchange offer or other business transaction approved by either the Board of Directors.” In adopting the poison pill, Murdoch no doubt wanted to avoid a rerun of his 2004 run-in with John Malone. The Liberty Media Chairman seized an opportunity to raise his stake in News Corp from 9% to 16% when it reincorporated to the U.S. from Australia. Two years later, Malone agreed to turn over his News Corp shares in return for 38.5% of DirecTV, $550M in cash, and three regional sports networks.