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.
Veteran News Corp. TV executive David Hill is stepping in to oversee Fox’s flagship reality series American Idol and The X Factor. Hill, who serves as Senior EVP of News Corp. after a long tenure as chairman and CEO of Fox Sports, is not a replacement for Fox’s departing alternative programming president Mike Darnell but will take over his duties on Idol and X Factor. Following Darnell’s recent announcement that he was stepping down, there has been a decision-making vacuum on the two shows, with Idol in particular in dire need of someone to oversee its upcoming overhaul following record-low ratings.
Three of the four judges — Mariah Carey, Nicki Minaj and Randy Jackson — already announced they are not coming back. Executive producers Nigel Lythgoe and Ken Warrick also are not expected to continue, but even that decision has not been formalized, along with the recruitment of new judges, with negotiations with Idol alumna Jennifer Hudson stalled. Hill’s coming on board is expected to help get things moving. It also will shift the way the two shows are run toward a more traditional network/producer relationship, with Hill serving as the network’s point person for the producers.
New York, NY – May 24, 2013 – News Corporation and the new News Corporation today announced that the separation of News Corporation (the “Company”) into two distinct publicly traded companies, 21st Century Fox and the new News Corporation, has been formally approved by the Company’s Board of Directors. The Company announced appointments to the Boards of Directors of both companies, effective upon the completion of the separation, which is expected to occur on June 28, 2013.
Tom Mockridge, the former CEO of Rupert Murdoch’s News International, has been named successor to Virgin Media‘s outgoing CEO Neil Berkett. The UK’s Virgin Media is in the process of being acquired by John Malone’s Liberty Global in a $23.3B deal, setting the stage for a battle of the billionaires in the UK pay-TV sector where Murdoch’s Sky is the number one operator and Virgin is number two. Mockridge resigned as the News International head in December 2012 after assuming the reins in July 2011 amid the phone hacking scandal. He spent more than two decades at News International owner News Corp. where he also held the posts of chief executive of European television operations and chief executive of Sky Italia. Liberty’s takeover of Virgin will be voted on by shareholders in June with the acquisition to close shortly thereafter. Berkett will leave Virgin when the deal is finalized.
After attempts to stake a big claim in the digital arena via also-ran MySpace and the now-defunct The Daily newspaper, News Corp. is headed into the classroom. Its new Amplify Tablet computer designed specifically for schools is being unveiled at SWSWedu in Austin today. Geared towards the K-12 market, the tablet is aimed at transforming “the way teachers teach and students learn,” Joel Klein, CEO of News Corp.’s education division, Amplify, said. Klein has experience in the field: he headed the New York public school system before joining Rupert Murdoch’s company two years ago. Interest in digital learning is at a high and News Corp. is looking to tap into the dollars being spent on technology by U.S. schools. Tablets will come loaded with features that allow teachers to plan lessons, prepare quizzes, send assignments, share multimedia resources and manage their students’ devices. They’ll cost $299 per year per student for a WiFi-enabled device, when purchased with a two-year subscription at $99 per year. There’s also a 4G model for $349 with a $179/year annual subscription. (By comparison, the iPad2 costs $399.) Amplify execs expect a $180M operating loss for the first year, The New York Times reported.
News Corp. is forging ahead with the Amplify tablet as it continues to try and distance itself from its troubles in the UK. In 2010, News Corp. acquired a 90% stake in Wireless Generation, but later lost a contract to build a student data system for New York when the comptroller
Don Groves is a Deadline contributor based in Sydney
Rupert Murdoch’s Australian empire will generate as much of 60% of the annual earnings of the publishing arm of News Corp. after the company splits this year, say Sydney-based analysts who are generally sanguine about the new News Corporation’s prospects. The Oz group has largely gone under the radar of international investors until now because its financial results were not disclosed. With that set to change after the split, Kim Williams, CEO of Australian division News Limited, will face increased pressure and scrutiny from the get-go.
ComSec’s Alice Bennett expects News Corporation stock to be sold off aggressively at the start, creating one of the initial challenges for Williams. Bennett believes the sale will be down to factors that include News Corp.’s exposure to the Australian and New Zealand economies; the fact that publishing reps 53% of earnings; ongoing losses at the Amplify education business and the risk of further litigation in the UK. But, she does allow, “When the dust settles post demerger, we think this vehicle could provide some interesting opportunities for Australian investors given the highly cash-generative pay TV assets and higher-growth online assets.” Fox Sports and Foxtel, of which News Corp. holds 50%, are staying in the publishing fold. The company also owns 61% of realestate.com.au.
Private equity firms Permira and KKR are said to be working with JPMorgan Chase on options for their 53% stake in German broadcaster ProSiebenSat.1 Media. The firms could sell to another company or on the open market, Bloomberg reports, and potential bidders could include Time Warner, Comcast and News Corp., The Financial Times said. News of a potential sale comes amid increased movement in the German broadcast sector as companies compete in a contracted ad sales market. In December, Discovery Communications said it was acquiring ProSieben’s SBS Nordics operations for $1.7B and last week, media giant Bertelsmann said it was considering reducing its stake in FremantleMedia owner the RTL Group. KKR and Permira acquired their ProSieben stake for 3.1B euros ($4.2B) in 2006, at the peak of the buyout market, but have had to write down their investments since. ProSieben’s stock has jumped by more than 20% since the beginning of 2013, giving the company a market value of 5.6B euros ($7.6B), according to the FT.
As News Corp. prepares to split into two distinct entities, two senior roles have been filled on the publishing side. Times and Sunday Times group managing editor Anoushka Healy has been named chief strategy officer and William Lewis, an executive member of News Corp.’s Management and Standards Committee, has been named chief creative officer. Both execs will be part of News Corporation, as the spun off publishing division will be known (the media and entertainment half of the company will be called Fox Group). The separation of the businesses is expected to be completed by the end of June. Here’s the release on the new appointments:
New York, NY – February 1, 2013 – News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) today announced two senior management appointments for the New News Corporation, the proposed global publishing entity to be formed as part of the Company’s intended separation into two independent, publicly traded companies.
Anoushka Healy, currently Group Managing Editor of The Times and Sunday Times in London, has been named Chief Strategy Officer and will help shape the new News Corporation and fashion its strategic direction. She will also be responsible for sharing best practices across the organization, implementing new projects and supporting talent around the company’s businesses.
William Lewis has been appointed Chief Creative Officer. He will be responsible for the new company’s creative strategy and will have a central role in developing new commercial opportunities, including product launches, digital initiatives and acquisitions. Mr. Lewis joined News Corporation as Group General Manager of News International in London in September 2010 and became an executive member of News Corporation’s Management and Standards Committee in July 2011.
Don Groves is a Deadline contributor based in Sydney
Ahead of News Corp.‘s annual general meeting in October, Rupert Murdoch tweeted: “Any shareholders with complaints should take profits and sell!” Australia’s First Super is taking Murdoch up on the suggestion, citing concerns over the board’s lack of independence. The industry fund, which controls nearly $1.78B, joined U.S. institutions in an unsuccessful bid against the re-election of James and Lachlan Murdoch in October and called for the roles of chairman and chief executive to be split. While it’s a small investor in News Corp., the prominent fund’s decision today could be seen as a symbolic blow. “Open, transparent, representative governance is not only overdue but essential for improved risk management within the company,” First Super co-chairman Michael O’Connor said. “The interests of minority shareholders have too often been compromised. But these issues are apparently of no concern to Rupert Murdoch, so our board decided to take his advice and sell down our shareholding.” News Corp.’s shares have gained more than 40% in the past year, but O’Connor told Reuters the fund was taking “a long-term view.”
Editor Of Rupert Murdoch’s Times Of London Resigns, Says It Was “Made Clear” News Corp. Wanted Someone New
James Harding has run the flagship Times newspaper since 2007. In his resignation speech, Harding said, “It has been made clear to me that News Corporation would like to appoint a new editor of The Times. I have, therefore, agreed to stand down. I called Rupert this morning to offer my resignation and he accepted it.” The Times has been somewhat critical of its parent company during the phone-hacking scandal and reports suggest this may have been the reason Harding ankled. This is the second time in two weeks that News Corp.’s UK press arm, News International, has lost a senior exec. News International CEO Tom Mockridge said he was stepping down on December 2. In related news, The Telegraph reports that senior News International execs have made informal approaches to the British government about being allowed to combine The Times and The Sunday Times into one operation. Under an agreement Murdoch made back in the early 80s when he acquired the papers, he is bound to keep them separate. Since Harding’s announcement yesterday, it has been speculated that Sunday Times editor John Witherow may replace him.
UPDATE: News Corp. “is pleased” with the UK regulator’s decision that BSkyB is fit to hold a broadcast license. But, the company took issue with Ofcom’s stance on former chairman James Murdoch, whose actions were called “ill-judged.” News Corp. said: “We disagree with with certain of the report’s statements about James Murdoch’s prior actions as an executive and Director, which are not at all substantiated by evidence.” (Full statement below)
PREVIOUS, 12:01 AM PT: Sky has passed the “fit and proper” test. British regulator Ofcom has concluded its months-long consideration of whether the satcaster is fit to hold a broacast license in light of phone hacking and other allegations surrounding News Corp.-controlled media properties in the UK. News Corp. owns 39% of Sky. The org today said: “There is no evidence that Sky was directly or indirectly involved in any of the wrongdoing either admitted or alleged to have taken place” at News Of The World or at The Sun. However, Ofcom was critical of James Murdoch, who stepped down as chairman of BSkyB in April this year. The org said today: “The evidence available to date does not provide a reasonable basis to find that James Murdoch… was complicit in a cover up” at the News International newspapers. But, while Murdoch was exec chairman of News International, Ofcom says it considers his conduct, “including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged.”
Regarding his father, Ofcom says it does not consider the evidence currently available “provides a reasonable basis on which to conclude that Rupert Murdoch acted in a way that was inappropriate in relation to phone hacking, concealment or corruption by employees of [News Group Newspapers] or News International.” It also gave a pass to News Corp., saying it has no evidence to “reach any conclusion that News Corporation acted in a way that was inappropriate in relation to phone hacking, concealment, or corruption.”
Don Groves is a Deadline contributor based in Sydney
News Corp.’s move to acquire James Packer’s Consolidated Media Holdings is nearing completion. Reporting revenues today, CMH said the deal should be finalized in six weeks, pending the completion of due diligence and approval from the Foreign Investment Review Board. The Australian regulator cleared the deal earlier this month. News Corp. made its offer in June and via the acquisition is poised to increase its holdings in Foxtel, Oz’s leading pay-TV platform, from 25% to 50% and take full ownership of lucrative sports channels provider Fox Sports. Today, CMH reported a 15.6% fall in statutory net profit to $85.8M for the year to June, reflecting the costs of Foxtel’s takeover of regional satcaster Austar. Foxtel (excluding Austar) contributed $42M to CMH’s operating profit, up $4.4M on the prior year. Fox Sports contributed $49.4M, down $2.1M due to softer subscriber numbers and increased broadcasting costs. Foxtel had 1.68M subscribers at June 30, just 30,000 more than a year earlier. Combined with Austar’s subscribers, the total count was 2.3M. The company made no mention of a possible rival bid from Kerry Stokes’ Seven Group Holdings, which has a 24% stake in CMH and has asked the Australian Competition and Consumer Commission to review a proposal for Seven to acquire the balance of the shares.
Earlier this year, Rupert Murdoch’s News Corp. established an internal Management and Standards Committee with a remit to “take responsibility for all matters in relation to phone hacking at the News Of The World, payments to the police and all other related issues at News International.” Today, it’s implemented a change in reporting structure under Gerson Zweifach, senior EVP and group general counsel. The shift also frees up News Corp. exec Joel Klein who previously oversaw the committee as he turns focus back to his regular company duties.
UPDATE: News Corp has confirmed it has suspended the voting rights of a portion of class B common stock held by foreign shareholders. The Murdoch Family Trust and Rupert Murdoch have agreed not to vote, or provide voting instructions, with respect to a portion of their class B common stock during the suspension period to the extent that doing so would increase their percentage of pre-suspension voting power. See the release below.
PREVIOUS: According to the U.S. Communications Act, a broadcaster can’t have more than 25% foreign ownership. News Corp, which owns 27 TV stations, is said to have discovered that foreign investors’ voting stock has crossed the 25% cap. The company, which found the breach during a survey, is expected to suspend half the voting rights of class B voting shares held by non-Americans, The Wall Street Journal reports. Citing a person familiar with the situation, the newspaper says the rights will be suspended until News Corp is back in line with the regulations. This has happened before at News Corp. Both the company and Murdoch were originally Australian and Murdoch became a U.S, citizen in the 80s, which allowed him to purchase the TV stations. In 1995, the FCC waived a breach of foreign ownership on public interest grounds and the company since reincorporated as a U.S. entity, The Journal notes.
Richard Horton, a detective who formerly penned an anonymous police blog, filed suit on April 11 in London against Times Newspapers Ltd, a unit of News Corp’s News International, Bloomberg reports. Horton was exposed by The Times as the author of the blog back in 2009. At the time, he sued to block publication of his name, but lost when the newspaper aruged his identity was in the public interest. Earlier this year, Times editor James Harding acknowledged to the Leveson Inquiry into UK media ethics that the paper had misled the judge in Horton’s case and that a reporter had been given a formal warning after accessing the emails without authorization. He later said, “I sorely regret the intrusion into Richard Horton’s email account by a journalist in our newsroom. On behalf of the newspaper, I apologize.” Horton’s suit against The Times, which has largely avoided the phone hacking and bribery scandals at News International’s The Sun and the now-shuttered News Of The World, seeks “substantial” damages. The new suit comes as British attorney Mark Lewis arrives in the US to begin legal discussions that could lead to several lawsuits being filed over alleged phone hacking by News International employees. Those cases are understood to relate primarily to celebrities whose phones may have been hacked while they were visiting the US.
When the phone-hacking scandal blew wide open in the UK last July, Rupert Murdoch abandoned a plan to acquire the 61% of BSkyB that his News Corp did not already own. Now, the scandal could have an even further impact on News Corp, BSkyB and the satellite broadcaster’s chairman, James Murdoch. On Thursday, it emerged that UK communications regulator Ofcom had ramped up a probe into whether James Murdoch and News Corp itself are “fit and proper” persons to own a broadcast license. If they are deemed unfit, speculation is News Corp could be forced to reduce its BSkyB stake to a non-controlling level while James Murdoch could be forced to step down. He left his post as chief of News Corp’s UK press arm, News International, last month, but has remained as chairman of BSkyB.
Based on documents it acquired under a Freedom of Information Act request, The Financial Times reported late Thursday that Ofcom had created “Project Apple” to handle the fit and proper probe. The team is scrutinizing material coming out of the Leveson Inquiry into UK media ethics as well as Scotland Yard’s investigations into phone hacking and alleged payments made to public officials by journalists at newspapers controlled by News International. The documents show that the fit and proper question was discussed in late 2011, but escalated to project level in January. …
Time Warner, News Corp. and private equity group TPG are each said to have made bids in the $1 billion range for the media assets of Turkey’s Calik Holding. The country’s second largest media group has interests in television and print both nationally and internationally via Sabah-ATV which it acquired in 2007 for $1.1 billion. Calik had been seeking offers of around $1.25 billion, The Financial Times reported. Other groups expected to show interest in Calik’s media assets could include ProSieben and RTL, although the deadline for pre-proposals is Tuesday. The Turkish conglomerate put its media assets on the block earlier this month eyeing a completed sale in February. TPG is said to be an aggressive bidder while speculation is that the emergence of Rupert Murdoch’s News Corp. as a potential buyer could drive the price up. In 2006, News Corp. acquired a majority stake in Turkish TV channel Turkish Huzur Radyo TV which was then rebranded under the Fox banner.
Glee star Jane Lynch gave a taste of what could be in store if she hosts the Emmys in an appearance at a tech conference held by the Wall Street Journal‘s All Things Digital. In the bit, which channeled Lynch’s Glee character Sue Sylvester, she was acting CEO of News Corp., taking over for Rupert Murdoch, who is out of the country on business. (Like Fox, which airs Glee, WSJ is owned by News Corp.) “As acting CEO, I’ll be making some changes while the powers that be are abroad,” Lynch said. Here are a few:
- Closing iPad publication The Daily. “Never heard of it, never used it, so clearly I’ll be shutting that down.”
- “I’ll also be incorporating a comics page into the Wall Street Journal. I’m a big fan of Family Circus. So seemingly mundane, yet dripping with irony.”
- “I’ve also convinced Glenn Beck to stay on at Fox for one final gig — as a dying patient on House, with a horrendous malady. His sickness is consuming him from the inside out.”
- “I’m pretty sure we got Sarah Palin to do a guest spot on Glee. She’ll perform an original tune I penned: Look at Me, I’m Batshit Crazy.” Here is the video:
News Corp. is in preliminary talks to give control of Myspace to Vevo.com, the site partly owned by top record companies, including Universal Music and Sony Music, according to a Bloomberg report. News Corp. has been looking to unload the social media site, which continues to lose ground, despite the recent redesign and ramped up entertainment content. A year ago, Owen Van Natta stepped down as MySpace’s CEO, replaced by Mike Jones and Jason Hirschhorn.