British Labour Party MP Tom Watson, a vocal and enduring Rupert Murdoch critic, has called on the News Corp boss to be questioned by police following yesterday’s revelations about a secret recording of comments he made to Sun staffers last March. Speaking to Channel 4 News, Watson said he wants to know “what are they sitting on that they’ve not given the police” and “I hope that they’re going to be interviewing Rupert Murdoch about what he did know about criminality in his organization.” Enders’ senior analyst Douglas McCabe tells me Murdoch being questioned by police or ordered before Parliament again is “just about plausible” but adds, “I don’t feel that this in isolation would be comprehensive as a trigger to make that happen.” McCabe sees Murdoch’s comments to Sun staff as being blown out of proportion. “Fundamentally, should we be surprised that privately the chair of a large media organization is trying to rally the troops and be sympatheic with different situations he acknowledges in public?” He allows, “I think one can say he shouldn’t be saying whatever he is about the UK police operation,” but “I can’t read any impact on News Corp.” News Corp yesterday said, “The unprecedented co-operation granted by News Corp was agreed unanimously by senior management and the board, and the [Management and Standards Committee] continues to co-operate under the supervision of the courts.” In the secret recording of Murdoch, one journalist attendee told Murdoch that the staff felt it’s been made scapegoats in the police investigation into illegal tactics used by UK media. That’s partly due to the fact that News Corp’s Management and Standards Committee “continue(s) to hand over information on each and every person in this room,” according to the transcript. In response, Murdoch said, “No, they’re not. Haven’t given them anything for months.” He added that some previous disclosures were “a mistake, I think”.
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.”
Global Showbiz Briefs: Rupert Murdoch Eyeing Financial Times?; Ruling On Hacking Appeal; ‘Either Way’ Helmer’s Next Pic
Report: Rupert Murdoch, Abu Dhabi Media Group Eyeing Financial Times
A report out of Malaysia circulated this morning which claimed Rupert Murdoch and the state-owned Abu Dhabi Media Group are in talks to acquire The Financial Times Group for $1.2B. News Corp. said, “This is completely untrue” and FT owner, Pearson, also denied the report saying, “The Financial Times is not for sale, and Pearson is not in any talks to sell it.” The talks, reported by Malaysian political and business magazine The Edge Review, cited financial executives familiar with the negotiations which had purportedly been going on for the past month. The Financial Times Group includes the flagship Financial Times newspaper as well as The Economist magazine. Per AFP, the report said the Abu Dhabi group is eyeing a 75% stake with Murdoch’s new News Corp. taking 25%. News Corp. officially split into two entities today. In an interview published in the FT website on Thursday evening, chief executive of the publishing business, Robert Thomson, said News Corp. could use its $2.6B of net cash for acquisitions, but there was no mention of the FT, and he also played down expectations of a bid for the Los Angeles Times. Thomson is a former U.S. managing editor of the FT.
Judges Deny Appeals To Drop Charges Against Hacking-Scandal Figures
In other News Corp.-related news, former News International chief Rebekah Brooks, and former News Of The World editor Andy Coulson have both been denied appeals to have criminal charges against them dropped. Neither appeared in a London court Friday, but three judges there dismissed the appeal that had been brought by Brooks, Coulson and three others, The Guardian said. Brooks and Coulson’s trials begin in September, when they will face charges related to phone hacking. The appeals were fashioned on the grounds that the law does not extend to voicemails that already had been listened to.
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.
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.
Listen to (and share) episode 39 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s Executive Editor talks with host David Bloom about the brewing battle over boxes, as cable companies, consumer electronics makers and game console providers tussle for control of the relationship with consumers; Gannett’s $1.5 billion bet on local broadcasting; John McCain’s push for an FCC investigation of cable TV pricing; and what the Rupert Murdoch divorce might mean for News Corp. and Twentieth Century Fox.
Deadline broke the news yesterday about the Rupert Murdoch-Wendi Deng divorce over “irreconcilable differences”. Now that the media are finishing their feeding frenzy on the split, details are emerging about the corporate holdings held by Murdoch’s families – both his older one and his younger one. News Corp has a market value of about $73B, and family members primarily own stakes via three trusts. The largest and most important is the Murdoch Family Trust, which controls about 38.4% of its voting shares. Financial benefits go to all of Rupert Murdoch’s six children from three marriages. But the trust is controlled by the CEO, who has four votes, and his four oldest children who have one vote apiece: Prudence, a daughter from first wife Patricia Booker; and Elisabeth, James, and Lachlan, his three children with Anna Torv. The four older siblings also will decide who’ll control Rupert’s votes after he dies. Wendi Deng wanted the two daughters she had with Murdoch — Grace, 11, and Chloe, 9 — to also have a vote in the Family Trust, but he declined to force the issue over the objections of his other children. Still, Grace and Chloe own stakes in News Corp via the GCM Trust, which is administered by independent trustees. It includes an undisclosed amount of Class B stock, which carries voting rights, and 8.73M non-voting Class A shares that are worth about $276M at the company’s current trading price.
EXCLUSIVE 9 AM, 4TH UPDATE 11 AM WRITETHRU (new details): News Corp Chairman/CEO Rupert Murdoch filed for divorce from wife Wendi Deng Murdoch this morning in New York State Supreme Court, Deadline learned at 9 AM. The divorce will not impact Rupert Murdoch’s mega-media holdings, according to insiders, and was deliberately announced for maximum transparency before News Corp spins off its publishing assets into a separately traded company by June 28th. (Murdoch will control both of these entities.) Wendi is perhaps most vividly and fondly remembered by the general public in July 2011 for standing up for her husband and clocking Jonathan May-Bowles after he threw a pie at Murdoch during his highly publicized British parliamentary testimony in connection with the News International phone-hacking scandal. (“Mr Murdoch, your wife has a very good left hook,” the chairman of the House Of Commons panel said admiringly. Wendi quickly earned the nickname of ‘Tiger Wife’ on Twitter.) Today’s divorce news comes despite numerous denials by PR man Steven Rubenstein and News Corp PR woman Julie Henderson to me as recently as April and May. (“We get this phone call once every 3-6 months,” Rubenstein and Henderson said at the time, pointing to the fact that Wendi and Rupert had recently hosted a dinner at their home for Oscar-winning Twentieth Century Fox director Ang Lee and were going away together on Spring Break.) But legal sources insisted to Deadline that the Murdochs’ divorce was being planned at the same time that a change in Wendi’s behavior towards Rupert was observed during the Academy Awards in February and after. ”She was snippy with him during Oscar weekend, and she’s really impatient with him these days,” a source told Deadline then. I received a call from an insider telling me, “Now I’m hearing it might be true. Call me,” On the heels of that, for the first time, not even Murdoch’s reps were denying yet another rift between Rupert and Wendi, saying to me there had been marriage trouble but stressing ”it feels like its past whatever that was.” A source who had dinner with them shortly after in NYC told me they were “fine. They’re two people who move a lot in different directions. I don’t know if it’s the marriage I’d want.” But another insider acknowledged to me, “I can’t say it might not be true that they’ll divorce. They have ups and downs. Right now it feels to me, having spent time with them, that they’re in a good place.” There is no question that despite divorce clouds Murdoch’s #1 priority was the News Corp split, not his from Wendi’s, and ”to get it done and get it done right. So he’s had a lot on his plate. What was once one is now two,” an insider explained to me at the time. “The company is so big, so diverse, so complex, and now he has to recalibrate and reaggregate these businesses while the Street determines their true value.” Today I’m told by insiders that, at that time, there were still no divorce proceedings underway so the denials were issued in good faith. “The divorce happened very quickly,” an insider told me today without details.
Media moguls routinely divorce, and Deadline doesn’t cover Hollywood’s personal lives, but this split is notable only because of its possible impact on the News Corp split or the Murdoch family succession vis a vis its corporate holdings given the patriarch’s age of 82. “I don’t see anything to indicate that shareholders have a lot at stake if Rupert and Wendi split,” one prominent media analyst tells me. “News Corp paid her $92,000 in 2010 to provide some ‘strategic advice’ regarding MySpace in China. But that’s not even pocket change, and ended three years ago, She’s not on the board, and not an executive. And since she and her kids don’t have voting rights in the family trust, she doesn’t have leverage to influence succession. I suppose that investors might become nervous if she decided to spill some News Corp secrets, or distracted Rupert so much that he’d spend less time taking care of business. But that’s thin gruel.” As for News Corp’s obligations to keep Wall Street and shareholders up to date on this kind of personal matter, “They have to report ‘material’ information on a timely basis. A lot of wiggle room there.”
UPDATE, 3:10 PM: So much for the speculation that the new News Corp — the publishing company that News Corp is about to spin off — will pounce on some papers that Tribune wants to sell, including the Los Angeles Times. Well, at least for now. Rupert Murdoch told investors and analysts today that U.S. rules designed to bar a company from owning a newspaper and TV station in the same market make a newspaper acquisition here “unlikely.” That’s sure to comfort investors who fear that Murdoch will use the new company to make deals that they’ll hate, like his $5B purchase of Dow Jones in 2007. Many investors still believe that newspaper values haven’t hit bottom. But today’s comment leaves room for him to change direction. The FCC is considering changes in media ownership rules that would make it easier to cross-own newspaper and TV properties in a city.
Murdoch also indicated that he plans to raise The Wall Street Journal’s subscription rates, and could indirectly funnel some cash to investors. He noted that the Journal charges about $44 a month while its rival, The New York Times, charges more than $50. “There’s a dramatic difference in price,” he said adding later that “we’re looking to our readers to pay a heavier load.” What about advertising? “We’re being very realistic” by not forecasting a big increase in spending on print, he said. But execs noted that the new company plans to pay a dividend, and will set aside $500M to repurchase shares if they believe the stock is undervalued. “Ideally we’ll hold on to that money for other forms of expansion,” he says.
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.
“Look out Facebook!” the News Corp CEO wrote today in a tweet. “Hours spent participating per member dropping seriously. First really bad sign as seen by crappy MySpace years ago.” Easy to see why he’s still smarting over the “crappy” asset that he bought in 2005 for $508M and sold two years ago for $35M. But his warning also reflects the passion Facebook inspires among supporters and critics alike on the anniversary of its ill-fated initial public offering at $38 a share. The stock closed today at $26.25 — down 31.3% — and has been pretty much flat for more than five months. Bears say that Facebook can’t sustain its torrid growth as it faces potent competitors — including Google, Twitter and Tumblr — and a shift among users from personal computers to advertising unfriendly small screened mobile phones and tablets. “Facebook is now scrambling to boost revenues through bigger ads that take over the entire screen,” BTIG’s Rich Greenfield notes today. He contrasts that to Google+, a social network that “is not out to harm the user experience through disruptive, annoying, spammy ads, they simply want the data to improve search and other products.”
News Corp chief Rupert Murdoch this morning sent this memo to staff everywhere. Again, while the parent company logo changes after the corporation splits, the film and TV studio’s 20th Century Fox name will not:
He’ll receive a total of at least $28.3M from both entities in the fiscal year that ends June 2014, up from $24.6M planned from News Corp for fiscal 2013, …
The News Corp. Chairman and CEO today Tweeted a defense of the New York Post’s controversial Thursday front-pager blasting two innocent men as “Bag Men” sought …
UPDATE: Forget that News Corp is renaming its new separate media and entertainment business 21st Century Fox to take it into the future. 20th Century Fox is sticking to its past. ”The film …
BREAKING… 21st Century Fox replaces the previously announced name Fox Group for the independent media and entertainment company. The publishing side will retain the name News Corp when the Big Media corporation splits off its two main businesses. The new name will be effective with the separation and “draws on the Company’s creative heritage, while also speaking to the future as well as the innovation that defines its portfolio of businesses,” according to today’s press release. (I hear Rupert Murdoch‘s giant actually hired a naming company for this rather obvious choice unofficially pictured here.) Under the 21st Century Fox umbrella will be a global portfolio of cable and broadcasting networks and properties, including FOX, FX, FXX, FS1, Fox News Channel, Fox Business Network, Fox Sports, Fox Sports Network, National Geographic Channels, Fox Pan American Sports, MundoFox and STAR; film studio Twentieth Century Fox Film; and television production studios Twentieth Century Fox Television and Shine Group as well as its pay-television services in Europe and Asia, including Sky Deutschland, Sky Italia and its equity interests in BSkyB and Tata Sky. On June 28, 2012, News Corp announced the separation of its businesses into two separate independent companies, with the other containing newspapers, information services, and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. The split still needs federal regulatory approval. Here is Murdoch’s memo to all employees about the new name announcement: