James Murdoch isn’t going to succeed his father Rupert as CEO of News Corp — if you don’t believe that yet, then wait for November 10 when he’s due to testify again before the parliamentary committee investigating the News Of The World phone-hacking scandal. Media execs and close News Corp watchers tell me that James would have to perform a PR miracle to enhance his already tarnished reputation: He’s on the defensive after former NOTW legal affairs manager Tom Crone and editor Colin Myler testified in September that he knew more about the lawbreaking earlier than he has let on — raising the possibility that he was engaged in a cover-up. James’ testimony comes after institutional shareholders just made it clear that they don’t want him: Guardian columnist Dan Sabbagh called the News Corp Deputy COO “dead man walking” last week after 75% of voting shareholders aside from the Murdoch family, other directors, and Rupert’s ally Prince Alwaleed Bin Talal opposed James’ election to the board. Analysts and reporters will have a chance to raise more questions about the company’s governance Wednesday after News Corp reports its earnings for the quarter that ended in September.
A lot of people say James is in a similar predicament to the one that former Disney CEO Michael Eisner was in before he was forced out in 2005. Eisner initially fended off efforts by former board members Roy Disney and Stanley Gold to oust him from power. But their steady criticisms soured institutional investors to the point where Eisner’s presence hurt Disney’s stock and made it impossible to hang on. READ MORE »
UPDATE: Giving evidence to British MPs investigating the News Corp phone-hacking scandal this afternoon via video-link, former Wall Street Journal boss Les Hinton said he saw “no reason” why James Murdoch should resign. Hinton testified that he hasn’t spoken to the Metropolitan police about phone-hacking, nor has Viet Dinh, the independent News Corp board member who’s overseeing the company’s investigation into the scandal, questioned him. Hinton also wasn’t aware of any payments to police or other private detectives working for News International. And he was “not personally involved” in internal investigations into phone hacking at News International, the UK newspaper arm, when he was executive chairman. John Whittingdale, chairman of the UK parliamentary committee cross-examining Hinton, was overheard telling a fellow MP that Hinton’s evidence was “interesting, but that there was no bombshell there.”
PREVIOUS: News Corp deputy COO James Murdoch will face British MPs for a second time on November 10. He will defend himself as to whether he misled British politicians investigating the phone-hacking at the News Of The World. The $64,000 question is this: Did James pay $1.4M in hush money in 2008 to a hacking victim who could have disclosed that the scandal ran much deeper than the company publicly admitted? James said he didn’t. But three former News executives dispute the testimony he gave in July when he last faced MPs. His enemies say either James knew more about hacking than he admitted or, as chairman of UK newspaper arm News International, he ought to have known. Les Hinton, the former Wall Street Journal boss and Rupert Murdoch confidante, has been called to testify today. Read More »
It was bad enough that hundreds of Occupy Wall Street protesters stopped by his Fifth Avenue home on Tuesday to chant slogans about the unfairness of the tax system. The media mogul’s troubles also grew as he had to deal with a second UK newspaper scandal: The publisher of the Wall Street Journal Europe, Andrew Langhoff, resigned amid allegations that he had cut a deal to artificially inflate circulation figures by 41%. And that story began to unravel just as the UK Parliament’s Culture, Media and Sport Committee said it will interrogate Murdoch’s right-hand man Les Hinton on October 24 as part of its investigation into Murdoch’s other UK newspaper problem – the News Of The World phone-hacking scandal. This matter has already begun to loom large as investors prepare to converge in Los Angeles next Friday for News Corp’s annual shareholder meeting. Advisory firms Institutional Shareholder Services, Egan Jones, and Glass Lewis asked stock owners to reject several company board nominees — including Murdoch’s two sons, James and Lachlan — for failing to get to the bottom of the hacking allegations before the company was forced to close NOTW. Read More »
It’s not surprising to see that News Corp was one of 10 companies given an “F” grade by corporate research firm GMI Ratings for management or accounting practices that could make them risky bets for investors. But Discovery Communications — … Read More »
UPDATE, 9 AM: The UK’s Culture, Media and Sport Committee has set its schedule for the next round of evidence sessions in the parliamentary body’s investigation into the News Of The World scandal. The big name on the latest list is Les Hinton, the former Wall Street Journal boss and Rupert Murdoch confidante who resigned in July; he ran News Corp’s UK newspaper division News International when the hacking was most rampant. Hinton will testify October 24 via video link. Of course, the biggest fish — News Corp No. 2 James Murdoch, the company’s deputy COO and heir apparent to his father — is not on the list … yet. Both he and Hinton have already testified but were summoned back to the committee last month.
PREVIOUS, 5:03 AM: News Corp is acting like it will have a fight on its hands at the October 21 shareholders’ meeting, even though CEO Rupert Murdoch controls more than enough votes to pretty much dictate the outcome. In an SEC filing this morning, the company responded to advisory firms Institutional Shareholder Services and Glass Lewis, which urged investors to reject several board candidates including Deputy COO James Murdoch. News Corp says that it’s run by “sophisticated, world-class directors” who deserve to be re-elected. The company chafed at the advisory firms’ view that the board turned a blind eye to the News Of The World phone-hacking scandal. While the NOTW matter “could affect News Corporation’s results of operations and financial condition,” the company repeated its view that it ”has already taken decisive actions to hold people accountable and will take all prudent steps designed to prevent something like (the NOTW scandal) from ever occurring again.” Read More »
More trouble for James Murdoch today: UK police told several News International executives — including former CEO Rebekah Brooks — in 2006 that several News of the World journalists were involved in phone hacking, according to a report today in The Independent. The paper says it has “strong circumstantial evidence” that in August 2006 a senior police officer supplied names of lawbreaking reporters to Brooks. She’s one of Rupert Murdoch’s closest allies and was arrested by Scotland Yard in July.
The report raises new questions about Murdoch’s claim that he believed as late as 2008 that only one reporter — former NOTW royals reporter Clive Goodman — had been implicated. The date is important: Murdoch maintains that he wasn’t trying to cover up the extent of the scandal in 2008 when he paid an astronomical $1.4M settlement to a hacking victim who was aware of a second reporter’s involvement — on the condition that the matter be kept secret. Read More »
The decision by parliament’s Culture Media And Sport committee to recall James Murdoch and Les Hinton could be important. But it isn’t surprising. The committee investigating the News Of The World hacking scandal has a lot of questions about whether Murdoch may have tried to cover up the defunct tabloid’s lawbreaking now that two former executives have contradicted one of the News Corp Deputy COO’s key claims. Murdoch says he believed only one reporter had been involved with phone hacking in 2008 when he agreed to pay a hacking victim an astronomical $1.4M settlement on the condition that the victim keep quiet about the matter. At the time, the company publicly said that hacking was limited to a single rogue reporter. But former NOTW lawyer Tom Crone and editor Colin Myler recently told the committee that before Murdoch agreed to the payoff, he had seen an email that made it clear a second reporter could be implicated in the case. The committee also wants to know about News Corp payments to two people convicted of hacking: former NOTW reporter Clive Goodman and private investigator Glenn Mulcaire. Read More »
UPDATE, 1:20 PM: News Corp closed at $15.40, down 4.3%.
PREVIOUS, 6:42 AM: If the price doesn’t pick up, then News Corp will have lost 15% of its market value thus far in July primarily due to the investor concerns about … Read More »
Late last week Rupert Murdoch was apologizing all over the place for his company’s phone hacking and police bribery scandals. But based on the astonishingly defensive editorial about the matter in this morning’s Wall Street Journal, it seems … Read More »
Rebekah Brooks Resigns As CEO Of News International
This is huge. Hinton has been one of Rupert Murdoch’s closest lieutenants for 52 years in Australia, the UK and the U.S. But he ran News International during the anything-goes years when the News Of The World phone hacking took place. Hinton says that he didn’t know what was going on under his watch: “That I was ignorant of what apparently happened is irrelevant and in the circumstances I feel it is proper for me to resign from News Corp. and apologize to those hurt by the actions of News of the World.” Murdoch — who rewarded Hinton in 2007 by putting him in charge of Dow Jones, owner of The Wall Street Journal – says the resignation is “a matter of much sadness to me.”
New York, NY, July 15, 2011 – News Corporation today announced the resignation of Les Hinton, Chief Executive Officer of Dow Jones & Company and Publisher of The Wall Street Journal, effective immediately. Mr. Hinton, a 52-year veteran of News Corporation, has led Dow Jones since December, 2007.
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