Despite the News of the World fiasco, News Corp. chairman and CEO Rupert Murdoch says things are more or less fine at his company in terms of its leadership and governance. Murdoch made the comments during a quarterly results call to analysts Wednesday, the first call since the News of the World was shuttered in the wake of its phone-hacking scandal.
A reporter asked Murdoch, for example, whether he acknowledged critics’ claims that News Corp.’s board members aren’t sufficiently independent of the company, and if so, whether he planned any changes. Last week News Corp. delayed its plan for Elizabeth Murdoch, Rupert’s daughter, to join the board, but many of the independent members have ties to the Murdoch family. His sons James and Lachlan are also on the board.
“No, I don’t acknowledge that and no, I don’t plan any changes,” Mr. Murdoch replied.
Another reporter asked about Viet Dinh, the independent board member overseeing the company’s investigation into its own behavior. Dinh is also godfather to one of Lachlan Murdoch’s children.
“Mr. Dinh is a completely independent director,” Murdoch answered. “I can just assure you we continually evaluate our corporate governance practices.
“It’s a very strong board, very often critical and we have a lot of free-ranging discussions,” he added.
When an analyst asked – voicing the hope of many other analysts – whether the current crisis might lead the company to exit some or all of its newspaper holdings, Murdoch said no.
He was “shocked and appalled” at the News of the World‘s conduct, Murdoch said, but everything else in the company’s newspaper portfolio is fine.
Some investors have called for News Corp. to divide the CEO post from the chairman post, but Murdoch said that won’t happen. “The board and I believe I should continue in my current role as chairman and CEO.”
He runs the company as a team, he added, with President and Chief Operating Officer Chase Carey.
Asked whether scrutiny of James Murdoch’s recent appearance in Parliament has affected the possibility that James will ascend to the CEO spot at some point, Murdoch said no.
“I hope that the job won’t be open in the near future,” Murdoch said, drawing laughter from other News Corp. executives on the call.
If Murdoch were suddenly struck by a bus sometime soon, he said, Carey would get the CEO spot.
“Chase and I have full confidence in James,” he added.
On Wednesday, after the quarter’s earnings were released, News Corp.’s nonvoting Class A shares rose 12 cents to $13.83 in after-hours trading. They dropped 84 cents, or 5.8 per cent, to close at $13.71 in the regular session.
Net income in the three months through June fell to $683 million, or 26 cents per share, compared to $875 million, or 33 cents per share, a year ago.
Excluding the $254 million loss on the Myspace sale in late June, adjusted earnings came to 36 cents per share, beating the 30 cents expected by analysts polled by FactSet.
Revenue grew 11% to $8.96 billion from $8.11 billion. That also beat expectations for revenue of $8.51 billion.
Advertising revenue at the domestic pay TV channels including Fox News grew 23% in the fourth quarter and 17 per cent for the fiscal year from a year ago. Internationally, pay TV ad revenue was up 20 per cent on the quarter and 22% for the year. That contributed to pay TV segment revenues rising 15% to $2.15 billion.
Movie studio revenue rose 14% to $2.03 billion and broadcast TV revenue grew 7% to $1.12 billion. Direct broadcast satellite TV revenue grew 14 per cent to $1.04 billion and publishing revenue from its newspaper businesses grew 11 per cent to $2.35 billion.
The operating income from every segment either grew or losses were cut.
For the full year, net income grew 8 per cent to $2.74 billion, or $1.04 per share, from $2.54 billion, or 97 cents per share a year ago. Revenue grew 2 per cent to $33.41 billion from $32.78 billion last year.
With files from Associated Press
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