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James Murdoch Has Quit Boards of British Newspapers

November 24, 2011 by Leave a Comment

Media analysts in Britain speculated that the move by the younger Mr. Murdoch might presage the News Corporation’s eventual exit from British newspapers, once a core holding but now an increasingly marginal segment, in financial terms, of the company’s worldwide operations.

The younger Mr. Murdoch no longer sits on the boards of News Group Newspapers, which publishes The Sun, and of Times Newspapers, which publishes The Times and The Sunday Times of London, according to a statement released by the News Corporation’s News International unit, which oversees all Murdoch-owned businesses in Britain. All three papers are among the most influential in the country.

The statement, issued in response to reports in the British news media, said James Murdoch, 38, stepped down from the boards in September, but remained a director of Times Newspapers Holdings, the holding company of Times Newspapers that was established by Rupert Murdoch when he bought The Times titles in the early 1980s to honor his pledge to keep the papers editorially independent. James Murdoch will also remain chairman of News International and deputy chief operating officer, from a base in New York, of the News Corporation.

He will also continue as chairman of British Sky Broadcasting, Britain’s most powerful satellite broadcaster and one of the News Corporation’s most lucrative businesses.

The board changes appear to signal a significant gesture by the Murdochs, a step back from the family’s personal oversight of the newspaper properties in Britain that were the foundation for Rupert Murdoch’s emergence as an international media tycoon, after making his start as a newspaper proprietor in Australia. From Britain, Rupert Murdoch, now 80, moved his headquarters to the United States and vastly expanded his empire into film, television and other holdings.

Rupert Murdoch is said to have a passion for newspapering that James Murdoch, who has spent much of his career overseeing the News Corporation’s overseas television holdings, does not share.

News International spokesmen disputed suggestions that the Murdochs were walking away from the British newspapers, or seeking to distance themselves from the phone hacking scandal that ensnared The News of the World, a highly profitable tabloid that they closed this summer amid revelations about the newspaper’s role between 2001 and 2009 in the illegal interception of private voice mail messages of almost 6,000 people. The hacking victims included members of the royal family, sports and entertainment celebrities, and vulnerable families that had lost children to abduction and murder.

The News of the World had published continuously for 168 years, and James Murdoch has refused to rule out closing The Sun, the country’s largest daily newspaper by circulation, if it should become embroiled in the phone hacking scandal, as some of those who believe that their phones were hacked have alleged. At least 16 former News International employees, including Rebekah Brooks, the former chief executive, have been arrested in police investigations.

Two News Corporation officials, who spoke on the condition of anonymity in return for discussing internal company matters that they described as confidential, said the board moves were “housekeeping” measures. The decision was made, one said, because Mr. Murdoch “will be spending more time in the United States” in his role as a News Corporation executive. His position on the two boards was assumed by Tom Mockridge, the new chief executive of News International, who was appointed to the position after his predecessor, Ms. Brooks, resigned over the phone hacking scandal.

The news of Mr. Murdoch’s departure from the two boards, two months after the moves occurred, broke when a reporter for The Evening Standard, which is not a Murdoch property, examined filings at Companies House, the government agency where privately owned businesses in Britain file financial statements and other corporate documents.

Mr. Murdoch’s decision to step down from the two boards followed his appearance with his father in July before a House of Commons committee conducting televised hearings into the long-running scandal.

James Murdoch made a second appearance this month before the panel, known as the Culture, Media and Sport Committee, where he faced further questioning about his role in the scandal, in particular his approval of a $1.3 million financial settlement with Gordon Taylor, a soccer executive whose cellphone messages were among those intercepted by a private investigator working for The News of the World. Mr. Murdoch testified that the settlement was not a payment to cover up the extent of the wrongdoing at the newspaper, as some members of the committee suggested.

Although James Murdoch has rejected any hint of wrongdoing, it is widely expected that he will come in for criticism, and possibly harsher censure, when the parliamentary committee makes its report, expected before the year’s end.

Media analysts in the City of London financial district said they saw the board changes as part of a broader strategic repositioning by the News Corporation, and as a possible preliminary to a decision by the Murdochs to abandon their British newspaper holdings. “It feels like they’re loosening the ties,” said Alex DeGroote, an analyst at Panmure Gordon. “Over all, I don’t think News Corporation will own News International in the next 14 months or so. This is slowly withdrawing family interest from the U.K. titles, which are a marginal asset and increasingly became a distraction of management time.”

Julia Werdigier contributed reporting.

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Rebekah Brooks Resigns From Murdoch’s British Subsidiary

July 15, 2011 by Leave a Comment

Her resignation came a day after Mr. Murdoch, the chairman of News Corporation, and his son James reversed themselves and said they would testify next week before a parliamentary panel probing the cascading scandal over phone hacking that has forced the closure of The News of the World tabloid and the collapse of a $12 billion bid to assume full control of Britain’s biggest satellite broadcaster.

Until the scandal erupted, Ms. Brooks, 43, had been a star within News International, the British newspaper subsidiary of Mr. Murdoch’s News Corporation, editing two influential tabloids and rising rapidly to head the division. British analysts described her as enjoying the status of a favored daughter, with close ties not only to the Murdoch family but also to leading politicians.

But her resignation had seemed ever more likely as police arrested some of her former colleagues, politicians on the benches of Parliament demanded her resignation, the price of stock in Murdoch holdings faltered and investors voiced concern. Late Thursday, BBC television broadcast an interview with Prince Al-Waleed bin Talal of Saudi Arabia, identified as News Corporation’s second biggest shareholder, in which he said that if Ms. Brooks was involved in wrongdoing “for sure she has to go.”

Ms. Brooks, who has denied that she knew of the phone hacking while she was editor of The News of the World, said in an e-mail to her staff, “My desire to remain on the bridge has made me a focal point of the debate. This is now detracting attention from all our honest endeavors to fix the problems of the past. Therefore I have given Rupert and James Murdoch my resignation. While it has been a subject of discussion, this time my resignation has been accepted.”

She was replaced by Tom Mockridge, the head of Sky Italia, News Corporation’s Italian satellite broadcaster.

Prime Minister David Cameron, once regarded as a personal friend of Ms. Brooks, but who later followed opposition leader Ed Miliband in demanding her resignation, said she had made “the right decision.”

The move came at a sensitive juncture as the Murdoch family shifts to a more assertive posture to try to limit the damage from what has become its most serious crisis of credibility. James Murdoch said on Friday that News International would place advertisements in all British national newspapers at the weekend “to apologize to the nation for what has happened.”

Additionally, Rupert and James Murdoch abandoned efforts on Thursday to avoid scrutiny next week by a parliamentary panel investigating the scandal, saying they would testify before Parliament’s select committee on culture, media and sport, which is the main parliamentary panel investigating the phone hacking. Mr. Cameron has called for a separate inquiry to be headed by a senior judge.

Former staff members at The News of the World questioned why she had not resigned earlier. “Our paper was sacrificed to save her career, and now she’s gone as well,” one former employee said, requesting anonymity because he did not wish to jeopardize his position in severance negotiations following the newspaper’s closure. “Who knows why they’ve chosen to do it now, as she’ll have to appear before the select committee anyway.”

Others faulted News Corporation for what they called a slow and piecemeal response to the crisis. “This is too little too late,” said Michelle Stanistreet, the head of the National Union of Journalists. “This will be cold comfort to the hundreds of journalists who have lost their jobs at The News of the World.”

John F. Burns reported from London and Alan Cowell from Paris. Reporting was contributed by Ravi Somaiya from London.

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A Top British Leader Urges Murdoch to Drop TV Deal

July 11, 2011 by Leave a Comment

The developments deepened the fallout from The News of the World phone-hacking scandal which has been transformed from a long-simmering controversy into a full-blown crisis swirling around Mr. Murdoch’s British operation, News International, and its chief executive, Rebekah Brooks.

The furor erupted last week with reports that The News of the World, the top-selling Sunday tabloid in Mr. Murdoch’s British media empire, hacked into the voice mail of Milly Dowler, a 13-year-old school-girl abducted and murdered in 2002, after she disappeared but before her body was found.

Such was the public outcry against the 168-year-old newspaper that Mr. Murdoch’s family ordered it closed after its final edition appeared on Sunday. Many commentators in Britain saw the closing of the paper as a move to cauterize the phone-hacking crisis and save the bid for the much more profitable British Sky Broadcasting.

Ms. Dowler’s parents met on Monday with Mr. Clegg, the leader of the Liberal Democrat junior partner in Prime Minister David Cameron’s coalition government. The encounter cranked up pressure on Mr. Murdoch, who flew into London on Sunday to take charge of his company’s response to the crisis.

Mr. Clegg urged Mr. Murdoch to “look how people feel about this. Look how the country has reacted with revulsion to the revelations” about the phone-hacking scandal.

“Do the decent and sensible thing, and reconsider, think again about your bid for BSkyB,” Mr. Clegg said, referring to the satellite broadcaster by its initials.

In what seemed a further broadside against Mr. Murdoch and his lieutenants, a lawyer for the Dowler parents, Mark Lewis, added their voice to the chorus of calls for the resignation of Ms. Brooks, who was editor of The News of the World at the time of the hacking. Ms. Brooks is now the chief executive of News International, the British subsidiary of Mr. Murdoch’s News Corporation, and Mr. Murdoch has staunchly resisted calls for her to go.

The Dowlers “don’t see why she should stay in the job,” Mr. Lewis said. “They see this as something that went right to the top.”

“She was editor of The News of the World at the time that Milly was taken in 2002. She should take editorial responsibility,” Mr. Lewis said.

The takeover deal had already run into fresh trouble on Sunday when the opposition Labour Party promised to take its battle against the bid to a vote in the House of Commons — a step that, if successful, could deal a fatal blow to the bid.

In early trading on the London stock exchange on Monday, shares in British Sky Broadcasting retreated sharply as investors worried that the takeover deal — anticipation of which had pushed the share price up — would collapse. The stock fell 7.3 per cent early on Monday to 695 pence, or $11.12, compounding a slide from a level of 850 pence before the phone hacking scandal at The News of the World tabloid threw Mr. Murdoch’s British businesses into turmoil. The share price later recovered to around 709 pence — a decline of 5.5 per cent.

On Monday, British news reports said the culture secretary, Jeremy Hunt, who is the minister responsible for the deal, was contacting both the Office of Fair Trading and the media regulator, Ofcom, to determine whether the bid could now be referred to competition authorities.

The contentious bid also seemed to be driving a wedge between Britain’s uneasy coalition partners, with Mr. Clegg’s Liberal Democrats saying they might side with the opposition Labour Party in the House of Commons.

Tim Farron, the Liberal Democrat Party president, told the BBC that, in principle, the party’s lawmakers could support a Labour motion critical of Mr. Murdoch’s ambitions. “I cannot see how, if a legally worded motion comes to the House opposing a further Murdoch takeover of BSkyB, I cannot see how Liberal Democrats would vote against that,” he said.

John F. Burns reported from London and Alan Cowell form Paris. Ravi Somaiya contributed reporting from London.

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