Entertainment Industry

Category: News of the World

Hugh Grant raises profile of hacking hearings in London


The British tabloids' dirty laundry is getting a full airing this week as actor Hugh Grant and the parents of a slain London schoolgirl provide gripping testimony before a British judge.

Grant appeared Monday before Lord Justice Leveson, who is examining media ethics in Britain.

The actor, whose long list of screen credits include "Four Weddings and a Funeral" and "About a Boy," suggested that his cellphone was hacked by the Mail on Sunday newspaper, which is not part of Rupert Murdoch's News Corp. stable of tabloids. Grant has previously said he believes that operatives of News Corp.'s now-defunct News of the World tabloid also hacked into his cellphone.

The Leveson legal inquiry was set up in the wake of the phone hacking scandal that exploded this past summer after a story in the Guardian newspaper exposed that the cellphone of a missing 13-year-old schoolgirl, Milly Dowler, was hacked by the News Corp.-owned tabloid News of the World. 

In his testimony, Grant referenced a February 2007 article in the Mail on Sunday, published by Associated Newspapers Ltd., which claimed that his relationship with then-girlfriend Jemima Khan was in tatters because of his persistent, late-night calls with a "plummy-voiced" studio executive from Warner Bros. Grant said he sued for libel in the case and won damages.

"It was a bizarre story and completely untrue," Grant told Leveson Monday. "Thinking about how they could possibly come up with such a bizarre, left-field story, I realized that although there was no plummy-voiced studio executive from Warner Bros. with whom I had any kind of relationship ... but there was a great friend of mine in Los Angeles who runs a production company, which is associated with Warner Bros., and whose assistant is a charming, married, middle-aged lady, English, who as [it] happens in Hollywood is the person who rings you.

"The executive never rings you, it's always the assistant," Grant said. " 'Hi, we have Jack Bailey on the phone for you.' "  So the duty of calling fell to this executive's assistant, whom Grant described as a "nice English girl living in L.A."

"She would leave charming, jokey messages, saying please call this studio executive back," Grant told the inquiry.  "And she has a voice that can only be described as plummy. ... I cannot for the life of me think of any conceivable source for this story in the Mail on Sunday except those voicemails on my mobile telephone."

Dowler's parents testified Monday that their grief was exploited when someone from the now-defunct News of the World tabloid hacked into the girl's cellphone and deleted messages. The action led the family to believe that Milly must still be alive when she was, in fact, dead. News Corp. last summer paid the family nearly $5 million in damages.

Actress Sienna Miller and "Harry Potter" author J.K. Rowling are also scheduled to testify this week.

For our dispatches from London, please go to our World Now news blog.


Hugh Grant alleges British tabloid hacked his cellphone

Family at center of Britain's phone hacking scandal describes ordeal

James Murdoch insists he was kept in the dark about phone hacking

— Meg James

Photo: Hugh Grant testifying Monday before Lord Justice Leveson. Credit: Reuters / Pool Photo

James Murdoch expresses regret but defends himself before Parliament

James Murdoch told Britain's Parliament that he wishes the company had been more aggressive about investigating allegations of phone hacking
News Corp. Deputy Chief Operating Officer James Murdoch told Britain's Parliament on Thursday that he wishes the company had been more aggressive about investigating allegations of phone hacking at the News of the World tabloid.

"Things went wrong at News of the World," Murdoch said. "If I knew then what I knew today … the company would have acted differently ... to sort this out and put it out,” Murdoch told Parliament's Culture, Media and Sport Select Committee.

However, Murdoch said he did not mislead Parliament about what he knew about the suspected wrongdoing at the now-closed tabloid newspaper when he was questioned by the committee in July.

"I have testified to you consistently about my knowledge of widespread phone hacking," Murdoch told Parliament member Tom Watson, who grilled the executive about his handling of the matter. Watson at one point compared News of the World to the mafia and Murdoch to a mafia boss, which Murdoch said he found "offensive."

Wearing a blue suit with a white shirt and green tie and a poppy lapel pin in remembrance of military veterans, Murdoch downplayed his own knowledge of what now appears to be a culture of phone hacking by the News of the World.

"I don't accept that at all," Murdoch said when asked to comment on why two former News International executives -- News of the World editor Colin Myler and legal counsel Tom Crone -- have disputed his account.

The committee has been probing the ethics scandal that brought down the News of the World and has given a black eye to the global media conglomerate. Last month, News Corp. paid almost $5 million in a settlement with the family of Milly Dowler, a slain teenage girl whose cellphone was hacked by the tabloid when she was still missing. Last week, the company launched a voluntary settlement program for other phone-hacking victims.

In his appearance, Murdoch kept stressing that his conversations with News of the World staffers related primarily to settlement talks with Gordon Taylor, the head of Britain's Professional Footballer's Assn.

The scandal has taken center stage in Britain. Both Sky News and the BBC are carrying live coverage of the hearings as is C-SPAN2 and Bloomberg Television in the United States.


James Murdoch to face Parliament again

Rupert Murdoch attacked at Parliament hearing

Phone-hacking scandal puts James Murdoch's career on line

-- Joe Flint

Photo: A protester wearing a mask representing James Murdoch, son of News Corp. chief Rupert Murdoch, poses Thursday with a mock-up of a newspaper outside Parliament. Credit: Ben Stansall / AFP/Getty Images

News Corp. profits fall as hacking scandal continues to take toll

Rupert Murdoch reads the last edition of the News of the World tabloid

The British phone hacking scandal continues to take its toll on News Corp.

The media conglomerate on Wednesday reported a 5% drop in its fiscal first-quarter earnings, as News Corp. incurred $91 million in charges associated with shutting down its News of the World tabloid in London that has been at the center of the scandal.

News Corp. also incurred $130 million in "other" charges, which include the costs of dropping its bid to acquire 100% of satellite broadcaster British Sky Broadcasting.

Taken together, these charges eroded the company's net income, which fell to $738 million or 28 cents a share, compared with $775 million or 30 cents a share for the same period last year. Meanwhile, revenue grew to $7.96 billion for the quarter that ended Sept. 30, up 7% from a year earlier because of double-digit growth from the company's cable and film groups.

The cable network group, which includes the FX network and Fox News, remains News Corp.'s primary revenue generator. It produced operating income of $775 million for the quarter, up 18% from a year earlier; reflecting higher advertising revenue and higher fees paid by cable, satellite and telecommunications companies for the rights to distribute Fox's cable networks.

News Corp.'s film group reported a 24% increase in operating income for the quarter to $347 million, fueled by the  performance of "Rise of the Planet of the Apes," which grossed more than $450 million in box-office receipts and home entertainment sales of the animated release "Rio" and "X-Men: First Class."


Investors signal no confidence in Murdoch's sons

A titan challenged

DirecTV and News Corp. reach a new deal

— Dawn C. Chmielewski

Photo of Rupert Murdoch reading the final issue of the News of the World tabloid. Credit: Frank Doran / Rex Features





Protesters angry at News Corp. push for Rupert Murdoch ouster

Protest2This post has been corrected. See the note at the bottom for details

As News Corp.'s annual shareholders meeting got underway Friday, about 125 vocal activists gathered in front of 20th Century Fox studio, calling for the resignation of Rupert Murdoch and railing against the media giant's mishandling of the phone hacking scandal.

The protest was marked by some of the same messages that have become the hallmark of the Occupy Wall Street movement, but the overarching theme that emerged was that there were crooks in power and it was time to make a change.

"We are here on the general premise that what News Corp. and Wall Street are doing are very related," said 22-year-old Blaine O'Neill, who has been camping with Occupy L.A.

"Money speaks louder than anything else, and the message that gets out is dominated by corporate interests and not much else," O'Neill said.

"My mom raised us well," added his 16-year-old sister, Ellie. "So since birth I've known not to trust the 1% who report news on the 99%."

Occupy L.A., which organized buses to ship its members from their encampment at City Hall to the Century City studio, was joined by other activist groups, including Avaaz.org, MoveOn and Common Cause, carrying signs with such slogans as, "Gotta beat back the Fox attack," "This is what democracy looks like," and "We are the 99%."

Key organizer Brianna Cayo-Cotter from Avaaz, who came down from San Francisco for the protest and was wearing a black "Fire the Murdoch Mafia" T-shirt, explained the goal of the morning: "The Murdochs have turned News Corp. into a global criminal enterprise," she said.

"And with the shareholders meeting, people from around the world are calling on them to be fired. They have been irresponsible in running one of the most powerful media companies in the world and that's dangerous for democracy and the public good."

As she spoke, protesters circled with signs reading, "I am not your ATM," "Rich Media = Poor Democracy," "People B4 profit," and "Fox and Friends Stink." Another protester -- the only one sporting a smart business suit -- waved at passing traffic wearing a giant papier-mâché Rupert Murdoch head with a distinctly Nixon-esque nose.

Protest1Getting the Murdochs to step down is admittedly a Herculean effort, said Avaaz's Cayo-Cotter. Avaaz said members from around the world have been calling News Corp. shareholders leading up to Friday's meeting to express their displeasure with the company's direction in the wake of both the News of the World phone hacking scandal and recent allegations that the European edition of the Wall Street Journal used questionable tactics to boost circulation figures.

"Corporate irresponsibility and bad governance have run amok," she said, "and what happened in the UK is just the tip of the iceberg."

Standing nearby, Anjuli Kronheim from Common Cause nodded in agreement and added, "We're here to ask News Corp. to stop spending in the next election cycle."

The latter was a sentiment shared by a number of liberal protesters who dislike the power they perceive the predominantly conservative company has over politicians and politics.

"I'm here because I dislike the Republicans and I dislike Rupert Murdoch," said Pearl Karon, an older woman with neat white hair. "And apathy is our worst enemy -- and their best weapon."

Despite the fiery rhetoric, the protest remained peaceful and contained, with most of the group leaving around 10:30 a.m. on a bus.

"We'll be back! We'll be back!" they chanted as they headed toward the luxurious green turf of Rancho Park Golf Course.

-- Jessica Gelt

[For the record, 1:29 p.m.: An earlier version of this post incorrectly referred to Rancho Park Golf Course as Rancho Mirage Park.]


Sparks fly at News Corp. annual meeting

News Corp.'s Murdoch beset by doubts and angry investors

Parliament's Tom Watson says Murdoch is at his "Rosebud moment"

Photos, from top: A mask-wearing protester outside of the 20th Century Fox lot during News Corp.'s annual meeting; Dave Saldana, communications director of the organization Free Press, during the protest. Credit: Jessica Gelt / Los Angeles Times

Second California pension fund votes against Rupert Murdoch

A second large California pension fund has voted against the reelection of News Corp. directors, including the company's powerful chairman, Rupert Murdoch. 

The California State Teachers' Retirement System said Monday that it had withheld its votes for the entire slate of nominees to the News Corp. board in advance of the company's annual shareholders meeting in Los Angeles on Friday.  

CalSTRS owns 6.1 million shares of News Corp. Class A common stock and 35,200 voting shares of News Corp. Class B stock, said Ricardo Duran, the pension fund's spokesman.

"As a publicly traded company, we feel that News Corp. should be held to the same governance standards as other companies in our portfolio," Duran said. "The recent scandal has underscored the need for the highest ethical standards at News Corp."

Reporters at Murdoch's now-defunct London tabloid News of the World eavesdropped on messages left on the cellphones of royal family members, celebrities, crime victims and fallen soldiers.

Murdoch, who controls about 40% of the company's voting stock, is expected to face questions Friday about his stewardship of the company. The phone hacking scandal has roiled the company, raised questions about Murdoch's leadership and succession plans and prompted inquiries into News Corp.'s business practices by the U.S. and British governments. 

Last week, the nation's largest pension fund, the California Public Employees' Retirement System, said that it had withheld its votes for Rupert Murdoch and his two sons Lachlan and James, as well as other non-independent directors. CalPERS holds 1.4 million shares of News Corp. Class B stock.

CalSTRS went further. The teachers' pension fund managers did not vote for any of the nominees to News Corp.'s board, Duran said.

The group has several concerns about Murdoch's iron grip on News Corp. management, specifically the company's dual-class stock system. The two classes of stock allow Murdoch and his family to control the voting shares even though their economic interest in the company is much smaller.

CalSTRS also said there were not enough independent voices on News Corp.'s board. 

"We believe that two-thirds of a company's board should be independent, and News Corp's slate of nominees as it is currently constituted falls short of that goal," Duran said. 

The development was first reported by the Sacramento Bee.

Last week, News Corp. issued a statement saying the board had taken “decisive action” to hold people accountable and take measures to “prevent something like [the British phone hacking scandal] from ever occurring again.”


CalPers to vote against the return of the Murdochs to News Corp. board

Firm urges the ouster of Rupert Murdoch from News Corp. board

Ex-News Corp. executive to testify again in hacking scandal

-- Meg James

Photo: News Corp. Chairman Rupert Murdoch. Credit: Noah Berger / Associated Press.

Shareholders add corporate espionage charges to News Corp. suit

Photo: Rupert Murdoch. Credit: Louis Lanzano / AP Contending that corruption is rampant throughout media giant News Corp., a group of shareholders have added allegations of corporate spying to a complaint against the company's chairman and chief executive Rupert Murdoch and other board members.

Tuesday's action amended a lawsuit filed in March in a Delaware court by the New York-based Amalgamated Bank, which manages several investment funds that have stock in News Corp. 

The suit maintains that News Corp. board members have failed shareholders by allegedly shirking their responsibility to oversee the media company's practices and business decisions.

News Corp. declined to comment on the litigation.

"For years, highly improper (and at times illegal) conduct has been carried out throughout News Corp. subsidiaries around the world without any board oversight or restraint," the amended complaint said.

The latest allegations center on suspected corporate espionage that occurred more than a decade ago at two of the company's U.S. business units, News America Marketing, which distributes coupon inserts for newspapers, and News Digital Systems Group, which provided TV set-top software to deter the theft of satellite signals.  

"Two subsidiaries, News America Marketing and NDS Group, were accused by multiple parties of stealing computer technology, hacking into business plans and computers and violating the law through a wide range of anti-competitive behavior," the lawsuit said.

The suit went on to say that News America "attempted to drive its competition out of business, by among other things, illegally hacking a competitor’s password-protected website" nearly a dozen times over a several month period. 

Eventually, News Corp. paid more than $650 million in settlements to three of News America's competitors. It also bought one of those rivals, a New Jersey marketing company called Floorgraphics Inc.

The Amalgamated lawsuit initially centered on issues of nepotism after News Corp. paid $675 million for Elisabeth Murdoch's London-based television production company. The complaint has since grown to include charges related to the British phone hacking scandal and, now, the corporate espionage.

Also included in the suit is a reference to a deal Murdoch made to buy News Corp. shares from mogul John Malone as part of a deal to sell satellite broadcaster DirecTV to Malone's Liberty Media.

That deal, the suit alleges, "protected Murdoch but gave up what could have been a multibillion-dollar profit on News Corp.'s investment in DirecTV."


Elisabeth Murdoch Makes $214 million on sale of Shine to News Corp.

Old Accusations of Spying Could Haunt News Corp. in the U.S. 

Bank Sues News Corp. Over Purchase of Shine Group

 -- Meg James

 Photo: Rupert Murdoch. Credit: Louis Lanzano / AP

James Murdoch recalled to testify in phone hacking scandal

James Murdoch must appear once again before a committee of the British Parliament to answer more questions about when he first learned of the cellphone hacking scandal that has rocked his family's  media empire, News Corp.

The Culture, Media and Sport Committee said Tuesday that it was recalling the 38-year-old scion to try to sort out conflicting evidence in the ethics scandal that has damaged the reputations of the Murdoch family and raised questions over whether James Murdoch should eventually run the sprawling company.

When he first appeared with his father, Chief Executive Rupert Murdoch, before the prominent panel in July, James Murdoch said he did not learn of the widespread nature of the illegal activity at the now-defunct World of the News tabloid until late last year.

James Murdoch has been in charge of the company's European and Asian operations since 2007, and earlier this year was promoted to deputy chief operating officer of the entire company. 

However, two of his former underlings quickly challenged James Murdoch's statements to Parliament, saying they had shared a crucial piece of evidence with him in 2008.  

The two men -- Colin Myler, the former tabloid editor; and the publication's lawyer Tom Crone, told the committee this month that they showed James Murdoch an email that suggested several people at the tabloid were involved in the hacking of cellphones of soccer stars, celebrities and members of the royal family. The three men met to discuss whether to settle a lawsuit brought by one of the phone hacking victims.

News Corp. had long maintained that one "rogue reporter" and a corrupt investigator hired by the tabloid were responsible for the illicit eavesdropping. However, revelations in recent months have undermined the company's initial statements and suggested a wider cover-up.

James Murdoch said he gave an accurate account during his appearance in July. 

"James Murdoch is happy to appear in front of the committee again to answer any further questions members might have," a News Corp. spokeswoman said.

Read the full story here: 


James Murdoch knew of wider phone hacking, ex-colleagues say

James Murdoch declines $6 million News Corp. bonus

News Corp.'s Rupert Murdoch Gets Mixed Reviews

-- Meg James

James Murdoch declines $6 million News Corp. bonus

James-Murdoch-gives-up-bonu Embattled News Corp. scion James Murdoch said he was giving up his $6-million bonus for fiscal 2011 because of the phone-hacking scandal that occurred at the company's now-defunct London tabloid, the News of the World.

"In light of the current controversy surrounding News of the World, I have declined the bonus that the company chose to award to me," James Murdoch said in a statement Friday. "While the financial and operating performance metrics on which the bonus decision was based are not associated
with this matter, I feel that declining the bonus is the right thing to do."

Murdoch, who is in charge of News Corp.'s European operations, said he would "consult with the compensation committee in the future about whether any bonus may be appropriate at a later date."

The $6-million bonus was part of a $17.9-million total compensation package that Murdoch received for the company's fiscal year that ended June 30.  By declining the bonus, Murdoch garnered nearly $12 million in compensation, including a $3-million base salary and $8.3 million in stock awards.

James Murdoch, 38, was elevated to the company's deputy chief operating officer in late March, while the News of the World scandal was making headlines in Britain but before it exploded into front-page news around the world.  James Murdoch, who approved settlements to victims of the phone hacking, is expected to be called back before a committee of the British Parliament this fall to answer more questions about when he became aware of the widespread illegal activity at the News of the World. 

The ethics scandal not only led to the demise of News of the World, it has rippled throughout the entire media giant. Key senior executives have resigned and probes into how News Corp. operates are underway on both sides of the Atlantic Ocean. The debacle also led to News Corp. having to ditch plans to buy outright the powerful British satellite broadcaster British Sky Broadcasting.


Rupert Murdoch's compensation swells to $33.3 million

Elisabeth Murdoch makes $214 million on Shine sale

News Corp.'s Rupert Murdoch gets mixed reviews

-- Meg James

Photo of James Murdoch; Credit:  Warren Allott / AFP / Getty Images

Rupert Murdoch's compensation swells to $33.3 million in 2011


News Corp. Chief Executive Rupert Murdoch continues to be one of the most richly compensated executives in America -- collecting $33.3 million for fiscal year 2011.

The 80-year-old media mogul's salary and stock package soared 46% over 2010 because of the addition of a $12.5-million bonus.  

The company's top executives have been struggling to contain widespread damage from the British phone hacking scandal. The crisis exploded in July with revelations that reporters for Murdoch's now-defunct News of the World tabloid in London eavesdropped on cellphone messages of royal family members, celebrities, sports figures, crime victims and fallen soldiers. 

Rupert Murdoch and his son James Murdoch, who runs the company's European operations, are expected to be called before a high court later this year to account for the scandal.

Rupert Murdoch qualified for the full amount of his target bonus in 2011 because of his leadership "through the recent economic downturn, positioning the company for long-term growth and ongoing strategic development," according to the News Corp. proxy which was filed with the Securities and Exchange Commission on Friday morning.  The company's fiscal year ended June 30.

In 2010, Murdoch collected $22.7 million.  Each year he receives an $8.1-million base salary, an amount which has long raised the eyebrows of corporate governance experts because it is not linked to the company's financial performance.  Murdoch also was paid $8.5 million in stock awards.

His second-in-command, Chief Operating Officer Chase Carey, received $30.2 million in fiscal 2011.  Carey's compensation included a $4-million base salary, a $10-million bonus and $15.2 million in stock awards.

James Murdoch, 38, who has been under increasing pressure for his handling of the British phone hacking crisis, was paid $17.9 million.  He received $3 million in salary, $8.3 million in stock awards and a $6-million bonus.

James Murdoch's compensation soared 74% over 2010 when he received $10.3 million.  He was elevated to the No. 3 position in the company in late March -- three months before the phone hacking scandal exploded into front page news in Europe, Australia and the U.S.

James Murdoch is expected to be called back before a committee of the British Parliament to further explain his role in the scandal.  After he answered questions this summer, two former associates challenged his account of when he first learned of the widespread nature of the illegal activities at the News of the World. 

James Murdoch "played an important role during fiscal 2011 in developing the company's key businesses and investments in Europe, Asia and the Middle East," the filing said. He also "successfully transitioned into his new role as deputy chief operating officer ... expanding his responsibilities."  

Roger Ailes, chairman of the popular Fox News Channel, received $15.6 million in compensation.  That included a $5-million base salary, a $1.5-million bonus, $8 million in non-equity incentive compensation and nearly $282,000 for corporate jet privileges, a car and driver, and personal security.

Chief Financial Officer David F. DeVoe's compensation package topped $18.2 million -- more than double the $7.1 million he received in 2010.  DeVoe's compensation jumped because of the addition of a $5-million bonus and $9.5 million in stock awards.

News Corp. separately said that it was nominating James W. Breyer, a venture capitalist, to serve on the company's board of directors.  Two directors are stepping down -- Kenneth E. Cowley and Thomas J. Perkins.  Five years ago, Perkins resigned from the Hewlett Packard Co. board after that company had hired an investigator to obtain his phone records.

News Corp. did not say why Perkins or Cowley, both longtime directors, were exiting after the company's annual meeting in October. 

News Corp. had planned to nominate Murdoch's 43-year-old daughter, Elisabeth Murdoch, to the board. However, in August she delayed her nomination in the wake of the company's various controversies, including shareholder lawsuits filed after News Corp. paid $675 million to buy her London-based TV production company Shine Group. Of that amount, Elisabeth Murdoch received $214 million.

In a departure, News Corp. said it would hold its annual meeting with shareholders Oct. 21 at the Fox lot in Los Angeles.  News Corp. typically holds its annual meeting in October near the company's headquarters in New York.


News Corp. shares soar amid market rally

Elisabeth Murdoch makes $214 million on Shine sale

Rupert Murdoch's L.A. dinner featured steak -- but not hacking

-- Meg James

Photo: Rupert Murdoch. Credit:  Ben Gurr / Reuters

News Corp. shares soar amid market rally

Investors for the last month have been punishing Rupert Murdoch, pushing down the value of his media company News Corp. by nearly 25% as the company has struggled to contain the damage from illegal phone interceptions by operatives of one of his London tabloids.

All that changed Thursday.  Amid a broader market rally, shares of News Corp. went on a tear, gaining 18% in value after the company's fourth-quarter earnings beat analysts' expectations.  In an earnings conference call after markets closed Wednesday, analysts seemed mollified that no new bombshells were about to come out. 

Rupert Murdoch Instead, News Corp. executives said they would raise the dividend and buy back at least $5 billion in News Corp. shares.  Shares closed Wednesday (before the conference call) at $13.71, and by midday Thursday they had climbed to $16.20.

The share price is still down about 10% from its pre-scandal trading levels. The day the British crisis exploded, July 5, News Corp. shares topped $18 a share.

On Wednesday, the 80-year-old mogul said he was not planning on stepping down from the chief executive role. However, he said that Chase Carey, the chief operating officer, and not one of his children, would step into the role immediately if Murdoch "was run under a bus."

Carey also calmed investors by saying  the company was not planning to go on a spending spree.  News Corp. had built its cash reserves to more than $13 billion so that it could buy out the remaining shares of British Sky Broadcasting, the largest pay TV service in Britain.

Last month, News Corp. was forced to withdraw its bid, valued at $12 billion, amid the fall-out of the News of the World phone hacking scandal and criticisms by members of the British Parliament that Murdoch already had too much media power.

"We plan to use this cash to continue to pursue additional buybacks beyond the $5 billion one recently announced if our stock continues to be undervalued, and today it is woefully undervalued," Carey said.

-- Meg James


Murdoch says he's staying at News Corp. helm

News Corp.'s Rupert Murdoch Gets Mixed Reviews

News Corp. shares hammered in wake of phone hacking scandal

 Photo: Rupert Murdoch. Credit: Louis Lanzano / Associated Press


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