rupert murdoch

DealBook: News. Corp Sells Russian Unit

July 22, 2011 by NewsMaker Leave a Comment

MOSCOW – News Corporation, Rupert Murdoch’s media conglomerate embroiled in scandal, sold its billboard company in Russia to a consortium of investors led by a Kremlin-controlled bank, the bank announced on Friday.

The sale of News Outdoor Russia had been under negotiation for at least months. The timing was apparently unrelated to the turmoil around News Corp. in the United Kingdom, where Parliament is investigating a tabloid newspaper’s practice of hacking into cell phones to obtain information.

Still, the Russian asset had a troubled history of its own. News Corp. opened the company here in 1999 while maneuvering to gain a foothold in the former Soviet and Eastern European markets to compliment its media holdings in China.

While News Outdoor Group, which is based in Moscow, operates in the Czech Republic, Romania and Ukraine, Russia has been by far its most lucrative market. News Outdoor Russia billboards are frequently provided for pictures of Vladimir V. Putin, the former president and now prime minister, reportedly on a pro bono basis at times.

Despite these gestures that were reported in the Russian media, News Corp. had been in discussions to sell the billboard company since the fall of 2008 amid a general worsening of the investment climate in Russia at the time, and apparent inability to win backing from the government.

In a 2008 interview with the Financial Times, Mr. Murdoch expressed concern the billboard company would be “stolen.” He added that “better we sell it now.”

Mr. Murdoch had initially proposed to sell the Russia asset for $1.6 billion. But as regulators pressed a tax claim and the recession deepened, the price dropped.

The company this week sold its 79 percent stake for $270 million, according to Kommersant, a Russian business newspaper. The Russian bank that organized the buyout consortium, VTB, did not disclose its price in a statement confirming the deal issued on Friday.

News Outdoor Russia is the country’s largest outdoor advertising operator with boards, banners and other advertising surfaces in more than 90 cities, according to the company’s Web site.

The Russian asset has been important to News Corp. Advertising revenues are mostly flat in developed markets like the United States, where the company operates the Fox television channel. But revenues are growing in emerging markets. In China, News Corporation operates a satellite television company. In the former Soviet Union, the focus had been largely billboards managed through the Moscow-headquartered company.

In 2008, News Outdoor Russia came under pressure, culminating in a back tax claim that was resolved two years later. Still, that year the company provided pro bono a large banner showing Mr. Putin’s face on a central Moscow building near Red Square, the RBK business newspaper reported.

Company-owned space in St. Petersburg this month carried advertisements for the People’s Front, a new political group established by Mr. Putin ahead of Parliamentary elections later this year.

Jason E. Senior, chief operating officer of News Outdoor Group, wrote in an email that the company would not respond to inquiries about the report of pro bono advertising provided to Mr. Putin in 2008 or the current advertising for the People’s Front organization on News Outdoor surfaces in St. Petersburg. He also declined to respond to questions about the sale.

Article source: http://feeds.nytimes.com/click.phdo?i=0a330aa693f343a5cae614db070e777d

Filed Under: Business News Tagged With: bono basis, eastern european markets, rupert murdoch

British Leader Defends His Actions in Hacking Case

July 20, 2011 by NewsMaker Leave a Comment

Mr. Cameron’s appearance before a special sitting of the House of Commons offered one more remarkable moment of passion and spectacle, following the separate appearance of Rupert Murdoch and his son James before lawmakers on Tuesday for nearly three hours of questioning of one of the world’s most powerful media moguls by British legislators.

Their appearance — made yet more dramatic by a protester’s attack on Rupert Murdoch with a plate of shaving cream — did not seem on Wednesday to have come close to answering many of the questions the father and son faced about phone hacking in the British outpost of their media empire in 2002.

Indeed, one of the two parliamentary panels investigating the widening scandal released a scathing report on Wednesday accusing Murdoch companies of “deliberate attempts” to thwart its investigations, and said police inquiries had been a “catalog of failures” to investigate the issue.

The events played out against a backdrop of huge public revulsion over the central allegation that The News of the World, a now-defunct tabloid closed down by Mr. Murdoch earlier this month, ordered a private investigator to hack the voice mail of Milly Dowler, a 13-year-old girl abducted and murdered in 2002. So great is the interest in the affair that the BBC devoted live television coverage on Wednesday to what it said was the Murdochs’ executive jet flying out of Luton airport north of London. Its destination was not announced.

The gathering of so many emotive issues, laced with big money deals, tabloid scandal and long-running British suspicion of the Murdoch machine, has crystallized into the most serious crisis of credibility and confidence of Mr. Cameron’s 15 months in office — a crisis in which he seemed to be trying on Wednesday to regain some of the initiative seized earlier by the Labour opposition leader, Ed Miliband.

Mr. Cameron returned home early from an African trade tour late Tuesday to face questions about his relationships with former senior figures at News International, the British subsidiary of Rupert Murdoch’s global News Corporation, particularly his choice of a former Murdoch employee, Andy Coulson, as his director of communications.

Mr. Coulson, a former editor of The News of the World tabloid, resigned from the prime minister’s office in January and was among 10 people who were arrested in the affair.

Referring to his decision to hire Mr. Coulson, Mr. Cameron said, “I regret and I am extremely sorry about the furor it has caused.”

“With 20-20 hindsight and all that has followed,” he said, “I would not have offered him the job and I expect that he wouldn’t have taken it. But you don’t make decisions in hindsight, you make them in the present. You live and you learn and, believe you me, I have learned.” He added that Mr. Coulson had been properly vetted before joining his staff and had given “assurances” that he had not been involved in phone hacking.

It was the closest Mr. Cameron has come to an apology, and seemed to show that the prime minister was distancing himself from his former aide.

But Mr. Cameron continued to defend Mr. Coulson’s work as director of communications and said he had “an old-fashioned view about innocence until proven guilty.” If it is proved that Mr. Coulson lied to him, he said, “that will be the moment for a profound apology.”

“It was my decision” to hire Mr. Coulson, Mr. Cameron said, “and I take responsibility.”

Ed Miliband, the leader of the Labour opposition, responded by saying Mr. Cameron’s position had been compromised by his association with Mr. Coulson. “Why doesn’t he do more than give a half-apology?” Mr. Miliband asked.

Referring to Mr. Cameron, Mr. Miliband said: “He says in hindsight he made a mistake by hiring Mr. Coulson. He says if Mr. Coulson lied to him, he would apologize. That isn’t good enough. It’s not about hindsight, it’s not about whether Mr. Coulson lied to him. It’s about all the information and warnings the prime minister ignored. He was warned and he preferred to ignore the warnings.”

Mr. Cameron was questioned repeatedly about a New York Times investigation into The News of the World that was published in September 2010.

“There was no information in The New York Times September 2010 article to make me change my mind about Mr. Coulson,” Mr. Cameron said.

The article found that hacking was widespread, and quoted two former News of the World journalists as saying that phone hacking was discussed in Mr. Coulson’s presence.

Jo Becker contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=bdfe840ed7b92910c39e5d7d30c9f3e6

Filed Under: Business News Tagged With: media empire, phone hacking, rupert murdoch

Leo Kirch, German Media Giant, Dies at 84

July 14, 2011 by NewsMaker Leave a Comment

A statement by his family did not disclose the cause of his death, but Mr. Kirch had suffered from diabetes for years.

At the height of his success in the late 1990s, Mr. Kirch headed Germany’s second-largest media company, after Bertelsmann. With the backing of German politicians and investors like Rupert Murdoch, Silvio Berlusconi and a Saudi prince, Mr. Kirch had created a $5 billion empire that included television channels, movie rights and a stake in Formula 1 car racing.

But the empire unraveled when an expensive bet on digital pay television failed to pay off. The Kirch group was forced to file for bankruptcy in 2002, the biggest in Germany since World War II, owing banks and business partners billions of dollars.

After the collapse of his business, Mr. Kirch spent his final years fighting Deutsche Bank and its former chief executive, Rolf Breuer, in court, asserting it was a public comment about the Kirch group’s finances that led to its collapse.

Mr. Kirch, the son of a winemaker from Franconia, was born Oct. 21, 1926, in Volkach, a village in Bavaria. He started his business when he was 29 and bought the broadcasting rights to Federico Fellini’s film “La Strada” with money he borrowed from his in-laws. “La Strada” proved a hit in Germany, and Mr. Kirch was soon traveling to Hollywood to bring movies like ““Lawrence of Arabia” to German audiences. When Germany opened its broadcasting market to competition in the 1980s, Mr. Kirch jumped at the opportunity and helped set up a private television channel, Sat. 1, which is still among the biggest in the country. By 1996, the Kirch group also owned a stake in the publisher of Germany’s best-selling tabloid, Bild Zeitung.

Mr. Kirch’s company employed almost 10,000 people and owned the rights to 63,000 movies and television shows as well as broadcasting rights to sports events including the 2002 soccer World Cup. His empire was one of Germany’s big postwar success stories.

But then Mr. Kirch decided to pour more than $3 billion into the new venture of pay television. He overestimated the appetite for the service from a German audience that already had a wide choice of free television channels. Costs for technology, film rights and financial agreements with his pay television partner, Mr. Murdoch, spiraled, and lenders started to call in loans. At the age of 75, Mr. Kirch was forced to declare his media empire bankrupt with $5.7 billion in debt.

In a rare interview with the German magazine Der Spiegel months before the bankruptcy filing, Mr. Kirch denied he was “a gambler” and said he was not driven by “delusions of grandeur.”

The flawed pay television deal with Mr. Murdoch, he said, was initially extremely lucrative. But, he added, Mr. Murdoch was a “shark” and “sharks have sharp teeth.” He added that he had no grudge against Mr. Murdoch “even if he wanted to eat me.”

As his media empire was unraveling, Mr. Kirch sent a letter of farewell to his staff. In it, he wrote about his vision to create a successful media company, over which he had lost control. “People, not numbers, make companies,” he wrote, before signing the letter with “God bless you.”

Mr. Kirch is survived by his wife, Ruth, and a son, Thomas.

Article source: http://feeds.nytimes.com/click.phdo?i=a007c345cfaec0cffa5b27d54df07894

Filed Under: Business News Tagged With: leo kirch, rupert murdoch, silvio berlusconi

Hacking Scandal Draws In British Government

July 6, 2011 by NewsMaker Leave a Comment

As new and potentially damaging allegations emerged in the scandal,Mr. Cameron went before Parliament and called the phone-hacking “absolutely disgusting.” But he refrained from responding to a taunt by the Labour opposition leader, Ed Miliband, that his relationship with another former News Corporation figure, Andy Coulson, amounted to a “catastrophic error of judgment.”

But, in a departure from previous reluctance by major British parties to challenge Rupert Murdoch’s News Corporation — seen as having huge influence here because of its ownership of leading newspapers — Mr. Cameron declared: “We do need to have an inquiry, possibly inquiries, into what has happened.”

A furor has been building in England for months following disclosures that journalists from the News of the World, a mass-circulation Sunday tabloid, hacked into the voicemail messages of celebrities and other prominent people. But, this week, the extent of the alleged hacking has broadened dramatically with reports that the newspaper hacked the cellphone of a 13-year-old girl who was abducted and murdered in 2002, when Ms. Brooks was its editor.

Additionally, Scotland Yard detectives were also investigating whether the phones of some families of victims of the bombings of three London subway trains and a double-decker bus in July 2005 had also been hacked, according to relatives of the dead.

“We are no longer talking here about politicians and celebrities, we are talking about murder victims, potentially terrorist victims, having their phones hacked into,” Mr. Cameron told Parliament. “It is absolutely disgusting, what has taken place, and I think everyone in this House and indeed this country will be revolted by what they have heard and what they have seen on their television screens.”

As the catalog of allegations widened on Wednesday, the BBC reported that News International, the News Corporation’s British newspaper division, of which Ms. Brooks is now chief executive, had passed material to the police relating to e-mails that seemed to show that payments made to the police for information had been authorized by Mr. Coulson, a former editor of the News of the World who later became Mr. Cameron’s head of communications.

Mr. Coulson was Ms. Brooks’s deputy at The News of the World in 2002 and later moved into the top editor’s role.

He then joined Mr. Cameron’s staff but resigned in January as questions over the hacking scandal persisted. In his resignation statement, Mr. Coulson reiterated that he had been unaware of the hacking, but said that the scandal had proved too distracting for him to do his job.

During Parliament’s weekly session called Prime Minister’s Questions, Mr. Miliband assailed Mr. Cameron for what he termed a “catastrophic error of judgment by bringing Andy Coulson into the heart of his Downing Street machine.” Mr. Miliband also repeated demands for Ms. Brooks to “consider her position,” in other words, resign. But Mr. Cameron refused to be drawn on either point, prompting Mr. Miliband to say that the British leader “has not shown the leadership necessary” to handle the affair.

Parliament scheduled an extraordinary three-hour debate later on Wednesday to further discuss the matter.

With the scandal broadening this week, switching focus from celebrities to ordinary people seized by tragedy, the allegations seemed to be threatening ever greater financial consequences for News International, owned by Rupert Murdoch’s News Corporation. Ford Motor Company and other companies have suspended advertising in The News of the World while Mr. Miliband renewed demands on Wednesday for the government to delay News Corporation’s proposed acquisition of British Sky Broadcasting, a pay-TV company in which it is already the largest shareholder. Government officials have indicated that they intend to approve the plan, and, in Parliament on Wednesday, Mr. Cameron insisted that the takeover had been handled according to the correct procedures.

The day before, the prime minister took time out from a visit to British troops in Afghanistan to lament what he called a “truly dreadful situation.” The police, he added, “should investigate this without any fear, without any favor, without any worry about where the evidence should lead them.”

Late Tuesday, The Guardian reported that the police would review every highly publicized murder, kidnapping or assault involving a child since 2001 for evidence of phone hacking. That would include the notorious case of Madeleine McCann, the 3-year-old who disappeared while her family was on vacation in Portugal in 2007.

Sarah Lyall reported from London, and Alan Cowell from Paris. Eric Pfanner contributed reporting from Paris.

Article source: http://feeds.nytimes.com/click.phdo?i=40f7f644ef16d410b008baf616a89d3b

Filed Under: Business News Tagged With: mr cameron, news corporation, rupert murdoch

Reuters Breakingviews: Some Faint Praise for Mr. Ballmer

May 30, 2011 by NewsMaker Leave a Comment

Mr. Ballmer started as chief executive in January 2000. Over the last decade, Microsoft’s shares have tumbled 30 percent, and they’re up only a hair from their low in 2006. The potted narrative is that Mr. Ballmer has shepherded the “old” operating system and productivity software powerhouse reasonably well but misjudged new developments, wasting billions of dollars chasing Silicon Valley innovators like Apple and Google.

It would be a lot to expect a single company to dominate more than one truly world-changing technology. But with that caveat, the critique of Mr. Ballmer is on target even if he’s far from the only chief executive who has struggled to make the most of a franchise. And he at least saw the need to pay dividends a few years earlier than, say, John Chambers at Cisco Systems.

On a total return basis including those payouts, Microsoft shareholders are down just over 10 percent over 10 years, and better off by some 14 percent over five, according to Thomson Reuters Datastream. That’s far from gratifying, but easily beats Cisco. Looking further across corporate America, Mr. Ballmer stomps Mr. Immelt’s decade-long reign at G.E. and outdoes Rupert Murdoch’s latest five-year stretch at the News Corporation. Richard Fairbank at Capital One Financial and Steven Burd at the grocery chain Safeway, two other corner-office fixtures, also have fallen short of Mr. Ballmer’s performance.

This report card, of course, damns Mr. Ballmer with faint praise. His problem isn’t so much shrinking profits as a loss of investor faith in Microsoft, whose price-to-earnings ratio is one of the lowest among big companies in the United States. But Mr. Einhorn probably won’t quickly get his wish for a replacement. Mr. Ballmer and Microsoft’s chairman, Bill Gates, go way back and together own more than 10 percent of the company. That means the current chief executive probably will get more time to try to reinvent Microsoft.

Virtual Inflation

In the currency wars, the nerds are winning. The value of a Bitcoin, a digital currency trading over peer-to-peer networks, has rocketed more than ninefold in two months to more than $8.60 as of Friday afternoon. The preordained supply and decentralization of Bitcoins have intrigued geeks and paranoid inflationistas alike. But this abstract gold may not survive what looks like a bubble.

Bitcoins are actually strings of unique digits, tracked and traded via an online network. People earn new coins by solving network security problems. These coins can then be traded for real currencies on exchanges, or for goods from certain businesses that accept them.

The Bitcoins in a user’s virtual wallet are tracked by the secure system and can be transferred only by that user. Moreover — and here’s the hook for the inflation worriers — the currency can’t be printed willy-nilly. The supply of Bitcoins is on a predefined path and will be capped at 21 million. And because there’s no central point in the system, there’s no equivalent of the Federal Reserve to rewrite that policy.

The concept of the Bitcoin is no less real than regular paper money or coins. All such currencies have only the value their users accept. Bitcoins do, though, have a couple of disadvantages: they don’t generate income, and since they exist in the digital cloud they’d be less use than paper money in any scenario involving power cuts or lost connectivity.

Still, it’s easy, quick and essentially free to transfer Bitcoins. Moreover, transactions are anonymous and the system knows no national borders. That’s helpful for some legitimate users, but also makes the currency a potential worry for law enforcers.

The finite supply means the value of Bitcoins should rise as demand increases. But the latest run-up looks decidedly frothy. A flush user can buy Web design help or alpaca socks. But there aren’t many businesses that accept Bitcoins. So it seems likely that enthusiasts and speculators are hoarding them without regard to the value they really represent. A bubble that bursts when the abstract intellectual appeal fades would probably doom the otherwise creative idea.

RICHARD BEALES and ROBERT CYRAN

Article source: http://feeds.nytimes.com/click.phdo?i=7ecc65ba7beb926d58b977fd73a3c9ed

Filed Under: Economy News Tagged With: rupert murdoch, steven burd, target

2011 Pulitzer Prize Winners Announced

April 18, 2011 by NewsMaker Leave a Comment

The prizes, which are administered by Columbia University, went to a variety of newspapers and were not concentrated in the hands of one or two publications, as has been the case in recent years.

And for the first time, a prize was awarded to reporting that did not appear in print: ProPublica’s series “The Wall Street Money Machine,” which won for national reporting.

The awards this year included other notable firsts. The Wall Street Journal won its only Pulitzer since Rupert Murdoch bought the paper in 2007. Joseph Rago won for his editorials on President Obama’s health care reform legislation. The Journal last won in 2007, when it received the awards for international reporting and public service.

Carol Guzy, a photographer from The Washington Post, became the first journalist to win four Pulitzer prizes. Ms. Guzy shared the award for breaking news photography with Nikki Kahn and Ricky Carioti, who were cited for their depiction of the devastation in the aftermath of the earthquake in Haiti.

Pulitzers were awarded in 13 journalism categories and 7 arts categories.

The prize for fiction went to Jennifer Egan for “A Visit From The Goon Squad.” Bruce Norris won the award for drama for his play “Clybourne Park.” The history prize went to Eric Foner for “The Fiery Trial: Abraham Lincoln and American Slavery.” Ron Chernow won in the biography category for “Washington: A Life.” “Madame White Snake” by Zhou Long won for music.

Kay Ryan took the prize for poetry for “The Best of It: New and Selected Poems.” The award for general nonfiction was awarded to Siddhartha Mukherjee for “The Emperor of All Maladies: A Biography of Cancer.”

In the journalism categories, the committee did not award a prize for breaking news, though it cited as finalists four newspapers: The Chicago Tribune, The Tennessean and The Miami Herald and El Nuevo Herald, which were considered a joint entry for their coverage of the earthquake in Haiti.

In the public service category, The Los Angeles Times won for its coverage of city officials in Bell, Calif., who awarded themselves enormous pay packages. The articles made the city of Bell infamous and tapped into the anti-government ferment that hit its height last summer.

David Leonhardt of The New York Times won in the commentary category for what the committee said was “his graceful penetration of America’s complicated economic question.” The Times’s Clifford J. Levy and Ellen Barry won the prize for international reporting for “their dogged reporting that put a human face on the faltering justice system in Russia, remarkably influencing the discussion inside the country.”

This article has been revised to reflect the following correction:

Correction: April 18, 2011

An earlier version of this article misspelled the name of the winner of the Pulitzer Prize for fiction as Eagan.

Article source: http://feeds.nytimes.com/click.phdo?i=1038e9fe47e64c7e8197277581be44c7

Filed Under: Business News Tagged With: american slavery, ron chernow, rupert murdoch