Shares in News Corp rise while Murdoch slated
AS MPs in London produced the most damning report so far of Rupert Murdoch’s stewardship of his UK newspapers, shares of his global media group somewhat perversely rose.
The Commons culture, media and sports committee yesterday concluded that Rupert Murdoch and his son James exhibited a “wilful” blindness towards phone-hacking at the News of the World, with the group’s majority Labour MPs saying that the 81 year old is not fit to run a major international company.
The committee also accused former News Corp employees Les Hinton, Tom Crone and Colin Myler of deliberately misleading Parliament.
But at first glance, News Corporation’s shares seem not to reflect the recent events that have so plagued the company’s reputation.
Its shares rose one per cent to $19.79 yesterday, having climbed 14 per cent since 7 July last year when James Murdoch announced the imminent closure of the News of the World.
Some say, however, that yesterday’s events make it more likely that Ofcom will demand a change at News Corp.
The media watchdog, which last week escalated its probe into whether BSkyB is “fit and proper” to own a broadcast licence, could soon force News Corp to sell most of its 39.1 per cent controlling stake in BSkyB – an outcome which analysts say might be good news for News Corp’s shareholders.
BTIG, a US-based stockbroker, issued a note before the select committee’s report was published saying that “investors would love to see News Corp sell off” its UK assets considering it is “looking increasingly doubtful that News Corp will be able to resuscitate” its bid for BSkyB.
The note claimed that the company “never received full credit for the value of its unconsolidated BSkyB investment and an auction of the stake would like generate meaningful incremental value to News Corp investors.”
Analysts have also predicted that News Corp’s value will climb if the company drops its relatively unprofitable newspapers.
The culture committee’s report referred to The News of the World’s history of “collective amnesia”.
News International has repeatedly stonewalled, obfuscated and misled and only come clean, reluctantly, when no other course of action was sensible and when its wider commercial interests were threatened. News Corp in the UK mounted a cover-up.
News International will regret forever not taking the chance to thoroughly investigate [evidence of phone-hacking at its newspapers].
Tory MP Therese Coffey said News Int should not have dismissed the previous select committee’s report.
We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of major international company.
The section of the report which divided MPs six to four.
More than any individual alive [Rupert Murdoch] is to blame. Morally, the deeds are his. He paid the piper and called the tune. It is his company, his culture, his people, his business, his failure, his crimes, the price of profit and his power.
Labour MP Tom Watson, a victim of phone-hacking, said those involved have still not accepted responsiblity.
The report points to the difference between “not specifically being shown evidence” and “not being aware”.
We have been told that it was as late as December 2010 that James Murdoch – and Rupert Murdoch – realised that the ‘one rogue reporter’ line was untrue. This, we consider, to be simply astonishing.