April 23, 2024

DealBook: News Corp. Shareholders Slap Down Murdoch’s Sons

Rupert Murdoch and his son James appearing before a committee in the British Parliament in July that was investigating the News of the World phone-hacking scandal.Press Association, via European Pressphoto AgencyRupert Murdoch and his son James appearing before a committee in the British Parliament in July that was investigating the News of the World phone-hacking scandal.Lachlan MurdochPaul Hackett/ReutersLachlan Murdoch

The News Corporation’s independent shareholders voted largely against reinstating Rupert Murdoch’s sons James and Lachlan to the company’s board, according to a tally the company filed with the Securities and Exchange Commission on Monday.
 
Although the Murdoch family’s control of a large percentage of voting shares all but guaranteed that all 15 board members would be re-elected after a contentious shareholder meeting on Friday, the detailed tally showed widespread opposition to the roles of James and Lachlan Murdoch.

Investors also voted heavily against Natalie Bancroft, an aspiring opera singer and socialite, and Andrew S. B. Knight, a former News Corporation executive who serves as the head of the board’s compensation committee.


The results of Friday’s vote were not expected to have a significant impact on the company’s leadership since the Murdoch family controls 40 percent of voting shares. And Prince Walid bin Talal of Saudi Arabia controls about 7 percent of voting shares; he has publicly backed the Murdochs and their management.
 
Still, James, the company’s deputy chief operating officer, has come under increased scrutiny in recent months as the News Corporation’s British newspaper unit deals with a phone-hacking scandal at its now shuttered News of the World tabloid. He was re-elected with 433 million votes, or 65 percent of the total.

His brother Lachlan received 440.9 million votes, or approximately 66.3 percent.
 

Ms. Bancroft, who joined the board after the acquisition of her family’s company Dow Jones Company, was re-elected with 66.4 percent of the vote, while Mr. Knight received 67.7 percent.


And while Rupert Murdoch, the company’s chief executive, easily held onto his additional position as chairman, he was re-elected with 84.4 percent of the vote, one of his lowest approval rates in years. Chase Carey, the News Corporation’s chief operating officer and a likely successor to Mr. Murdoch, fared better by having garnered 90.5 percent of the vote.

The News Corporation scored some victories, to be sure. Its two newest directors, the former New York City schools chancellor Joel I. Klein and the venture capitalist James W. Breyer, were elected with more than 96 percent of the vote.

And a floor proposal to prevent Mr. Murdoch from serving as both chairman and chief executive failed spectacularly: Just 0.22 percent of votes cast were in favor of the initiative.

Still, such a significant vote against James and Lachlan Murdoch could eventually impact the future makeup of the company, analysts said. Until The News of the World scandal broke open this summer, James had been seen as a likely candidate to take over for his father.
 
“Shareholders can send a message that the company has to heed,” said Doug Creutz, a senior research analyst at the Cowen Group.

In an interview ahead of the shareholder vote, he pointed to a 2004 campaign by several thousand shareholders to oust Michael Eisner from his chief executive post at the Walt Disney Company. Not long afterward, he was replaced by Robert A. Iger.

Article source: http://feeds.nytimes.com/click.phdo?i=256b11c44dfc1704677035004346ab20

Top Tabloid Editors Endorsed Hacking, Letter Says

In light of the new evidence, the panel also announced that it was summoning at least four former News of the World figures for questioning at a hearing next month and could possibly ask Mr. Murdoch’s son James, the head of the Murdoch conglomerate’s European operations, back for more testimony as well. Both father and son testified at a dramatic televised hearing last month.

The disclosures threatened to push the scandal back to the forefront of public concern, raising worrying questions for Mr. Murdoch and for the British prime minister, David Cameron, who hired Andy Coulson, a former News of the World editor, as his director of communications and has been taunted by the opposition for poor judgment in doing so.

Tom Watson, a Labour lawmaker and member of the panel, also said Mr. Coulson may be among those summoned to give further evidence.

The newest allegations are contained in a four-year-old letter released for the first time from Clive Goodman, the News of the World’s former royal correspondent who served a jail term for hacking the mobile phones of members of the royal family, to a senior human resources executive who had informed him that he was being dismissed.

In addition to the Goodman letter, the parliamentary panel released a letter from Harbottle Lewis, a law firm hired by the Murdochs, which they have repeatedly cited as having given the News of the World a “clean bill of health” in reviewing a cache of e-mails in 2007. The law firm’s letter contradicts that assertion and says that its own investigation had been limited strictly to advising the company in its employment dispute with Mr. Goodman.

The scandal has already spread through Britain’s public life and media world. Mr. Coulson quit his job with the prime minister in January as the hacking scandal spread. Rupert Murdoch closed down the 168-year-old News of the World after the scandal exploded last month with reports that the newspaper had ordered the hacking of the cellphone of an abducted 13-year-old schoolgirl, Milly Dowler, who was found murdered in 2002.

The correspondence, made public by the House of Commons select committee on culture, media and sport, is likely to embarrass former senior officials in the Murdoch empire who denied that phone hacking was widely practiced.

When both Rupert and James Murdoch testified at the committee hearing last month they said they were appalled by the hacking, in dramatic appearances punctuated by a bizarre episode when a prankster attacked the older Mr. Murdoch with a foam pie.

In Mr. Goodman’s letter, dated March 2, 2007, Mr. Goodman challenged his dismissal, saying that his actions “were carried out with the full knowledge and support” of other senior journalists. He also said another senior journalist arranged for payments to a private investigator who carried out the hacking.

Mr. Goodman also asserted in his letter that the practice of phone hacking was “widely discussed in the daily editorial conference” at the newspaper until “explicit reference to it was banned by the editor.”

Mr. Watson said the committee had seen two versions of the letter, one more heavily redacted than the other. One version sent to the committee by News International, the British newspaper subsidiary of the Murdoch family’s News Corporation, had been redacted to black out references to “editorial conference” and “the editor.”

The News of the World had long insisted that the phone hacking was restricted to Mr. Goodman, a single rogue reporter.

But Mr. Watson said the letter offered a “devastating” rebuttal to Mr. Coulson, the former editor and prime ministerial aide, who has always denied knowledge of the phone hacking. Mr. Watson said it was now “likely” that the panel would recall both James Murdoch and Mr. Coulson.

“We have written to Andy Coulson to ask him whether he would like to amend his previous evidence,” Mr. Watson said. “Clearly if Clive Goodman’s account is accurate, it shows the evidence he gave us was at best misleading and probably deceptive.”

Mr. Goodman, the former royal reporter, also claimed that he had been promised his job back after serving a four-month prison term starting in January 2007.

He wrote that Mr. Coulson and Tom Crone, the newspaper’s senior legal counsel, had “promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea. I did not, and I expect the paper to honor its promise to me.”

News International said through a spokesman that it “recognized the seriousness” of the material disclosed to the police and Parliament and was committed to working in a “constructive and open way” with all the relevant authorities.

The parliamentary committee said that on Sept. 6 it would recall Mr. Crone, as well as the News of the World’s former editor Colin Myer, the News International human resources director, Daniel Cloke, and its former legal director, John Chapman.

The committee also said that “depending on their evidence under questioning, the committee may also have further questions for James Murdoch and others.”

Sarah Lyall and Ravi Somaiya reported from London and Alan Cowell from Paris.

Article source: http://www.nytimes.com/2011/08/17/world/europe/17hacking.html?partner=rss&emc=rss

Woman Rises to Top in Male Tabloid Culture

Asked whether she had ever paid the police for information, Ms. Wade, a supremely confident and striking figure with her shock of wild red hair, looked unabashed and unperturbed. “We have paid the police for information in the past,” she declared.

She was, in fact, admitting to breaking the law, which was pointed out to her soon afterward. But Ms. Wade backtracked as fluently as she had come forward, declaring that she could not remember any examples and then proceeding, it seemed, to brush off the whole thing as another cheeky, walking-the-line incident in a career full of them.

Now 43 and known by her new married name of Rebekah Brooks, she has used a winning combination of charm, effrontery, audacity and tenacity to thrive in the brutal, male-dominated world of the British tabloids. She has risen to become chief executive of News International, Rupert Murdoch’s British newspaper subsidiary.

Her closeness to Mr. Murdoch, who is said to regard her as a kind of favorite daughter (although he has four actual daughters), has protected her during the recent scandal engulfing the company, even as parliamentarians called on her to resign.

The long-running saga exploded this week as the Murdochs announced they would close The News of the World in the face of public and parliamentary outrage over revelations that the phone of Milly Dowler, a 13-year-old girl murdered in 2002, was hacked by The News of the World after she went missing but before her body was found, hampering the police investigation and adding to the distress of her parents. Ms. Brooks was editor of The News of the World at the time; she has condemned the hacking and said she knew nothing about it. She declined a request to be interviewed for this article.

In extraordinary scenes in the House of Commons on Wednesday, legislator after legislator — most of them from the Labour Party — rose and demanded that Ms. Brooks, one of the most powerful figures in the British news media and a woman many have feared until now, should go. Ms. Brooks should “take responsibility and stand down,” said Ed Miliband, the Labour leader.

But Mr. Murdoch issued a ringing endorsement for Ms. Brooks, saying that his company was committed to holding a full investigation of the recent allegations, under Ms. Brooks’s leadership.

Part of his approach is strategic, said the media analyst Clare Enders, founder of Enders Analysis. Ms. Enders suggested that Ms. Brooks functioned as something of a firewall for Mr. Murdoch — a buffer against the allegations. “If she resigns, that’s an admission of culpability,” she said.

And part is emotional. “Rupert Murdoch adores her — he’s just very, very attached to her,” said a person who knows them both socially. “To be frank, the most sensible thing that News Corp. could do would be to dump Rebekah Brooks, but he won’t.”

Ms. Brooks’s rise has been steady, and quick. She began her career in the Murdoch media stable as a secretary at The News of the World, rising to become editor of the paper just 11 years later. In 2003, she became editor of the tabloid The Sun, Britain’s best-selling daily newspaper, before being promoted to her current job two years ago.

From early on, she was known for her creative flair in getting articles and her lack of compunction in how she got them. In 1994, she prepared for The News of the World’s interview with James Hewitt, a paramour of Princess Diana, by reserving a hotel suite and hiring a team to “kit it out with secret tape devices in various flowerpots and cupboards,” Piers Morgan, her former boss and now a CNN talk show host, writes in his memoir “The Insider.”

On another occasion in her early days, furious that the paper was about to be scooped by The Sunday Times’s serialization of a biography of Prince Charles, Ms. Brooks disguised herself as a Times cleaning lady and hid for two hours in the paper’s bathroom, according to Mr. Morgan. When the presses started rolling, she ran over, grabbed a newly printed copy of The Sunday Times, and brought it back to The News of the World — which proceeded to use the material, verbatim, in its own paper the next day.

Article source: http://feeds.nytimes.com/click.phdo?i=ac114ec67953a83eef1f5ca6fd0dc18d