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Category: phone hacking

News Corp. board issues statement supporting CEO Rupert Murdoch

Rupert Murdoch and Wendi Deng MurdochNews Corp.'s board of directors offered their unanimous support for Chairman and Chief Executive Rupert Murdoch one day after Britain's Parliament issued a report on the phone hacking scandal that concluded the mogul was "not a fit person" to run the media conglomerate.

The directors met Wednesday and issued a statement that the members remain confident in Murdoch's fitness to lead News Corp. and support his remaining in charge.

"The board based its vote of confidence on Rupert Murdoch's vision and leadership in building News Corp., his ongoing performance as chairman and CEO, and his demonstrated resolve to address the mistakes of the company identified in the Select Committee's report," the company said in a statement.

The parliamentary report, issued Tuesday, concluded that three newspaper executives from News Corp.'s News International subsidiary misled the committee during its 2009 investigation into phone hacking at the London-based News of the World tabloid, which has since been shuttered. It also found that News Corp and News International failed to properly investigate possible wrongdoing -- and exhibited "willful blindness" to the questionable conduct.

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Photo of Rupert Murdoch and wife Wendi Deng Murdoch as they are driven from The Royal Courts of Justice after he gave evidence to a judicial inquiry into press ethics in Britain. Credit: Photo by Peter Macdiarmid / Getty Images.

Despite Murdoch furor, BSkyB says it is a 'fit and proper' broadcaster

British Sky Broadcasting insisted that it remains a "fit and proper" holder of a broadcasting license in Britain, despite a damning parliamentary report on media baron Rupert Murdoch, whose News Corp. owns a controlling stake in the company
LONDON -- British Sky Broadcasting insisted Wednesday that it remains a "fit and proper" holder of a broadcasting license in Britain, despite a damning parliamentary report on media baron Rupert Murdoch, whose News Corp. owns a controlling stake in the company.

In an earnings report, the lucrative satellite television service said it was cooperating with British regulator Ofcom as part of the agency's evaluation of whether BSkyB remains a suitable holder of a broadcasting license.

The company said its "positive contribution to U.K. audiences, employment and the broader economy, as well as its strong record of regulatory compliance and high standards of governance" qualified it to maintain its license.

The statement came a day after an excoriating report by a parliamentary committee branded Murdoch as "not fit" to run a major international company. The report accused three senior News Corp. executives of lying to the panel during its investigation into phone hacking by the News of the World.

Murdoch shut down the tabloid last summer at the height of public outrage over phone hacking, which now appears to have been common practice at the paper. The furor also forced Murdoch to abandon his bid to buy the 61% of BSkyB that News Corp. does not already own.

The head of BSkyB sought to put some distance between his company and Murdoch's on Wednesday.

"It's important to remember that Sky and News Corp. are separate companies," Chief Executive Jeremy Darroch told reporters. "We believe that Sky's track record as a broadcaster is the most important factor in determining our fitness to hold a license. And the evidence shows that Sky serves U.K. audiences and customers well."

BSkyB reported a 5% rise in revenue over the last nine months, compared with same period a year earlier. Its adjusted operating profit during that period exceeded $1.4 billion, a 15% increase.

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Photo: Media magnate Rupert Murdoch and son James attend a horse race in Britain in March 2010. Credit: Adrian Dennis / AFP/Getty Images

Rupert Murdoch acknowledges News Corp. errors

James and Rupert Murdoch
News Corp. Chief Executive Rupert Murdoch sought to move beyond a damaging report from Parliament accusing him of "willful blindness" in failing to properly investigate allegations of phone hacking by one one of his company's London-based tabloids.

Murdoch, in a message to News Corp.'s 50,000 employees Tuesday, said the findings by the Culture, Media and Sport committee were "difficult to read" -- but afforded "an opportunity to reflect upon the mistakes we have made.

"We have done the most difficult part, which has been to take a long, hard and honest look at our past mistakes," Murdoch wrote. "There is no easy way around this, but I am proud to say that we have been working hard to put things right."

The select committee of the House of Commons found that "News of the World" and News International, the company's British publishing division, misled the committee in a 2009 investigation into phone hacking by blaming the actions on a "rogue reporter."  The committee found that the media company continued to downplay the involvement of its employees in phone hacking and engaged in a cover-up, rather than seeking out wrongdoing.

News Corp. issued a statement Tuesday acknowledging the "hard truths" that emerged from the committee's investigation: that it had been "too slow and too defensive; and that some of our employees misled the Select Committee in 2009." 

But News Corp. took issue with some comments, which the company labeled "unjustified and highly partisan." This appeared to be a reference to an explosive line in the report that called Murdoch  "not a fit person" to lead a major international company.

Murdoch wrote that the company should have acted more quickly and aggressively to uncover wrongdoing, and he expressed regret for failing to rectify the situation sooner. 

News Corp., and Murdoch, sought to underscore the company's efforts to fix the situation. Murdoch noted that an autonomous committee set up by News Corp. has completed a review of conduct at the company's other British publications, The Times and Sunday Times and The Sun, and found no evidence of illegal conduct beyond one incident reported months ago, in which disciplinary action was taken.

News Corp. General Counsel Gerson Zweifach is also creating a system of education and a compliance structure across the company's businesses. News International, the group that controls the company's British publications, also instituted governance reforms.

"The opportunity to emerge from this difficult period a stronger, better company has never been greater," Murdoch wrote. "And I will look to each of you to help me ensure that News Corp.'s next 60 years are more vital and successful than ever."

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Photo: Rupert Murdoch, right, and his son James Murdoch in July 2011. Credit: Sang Tan /  Associated Press

James Murdoch resigns from BSkyB ahead of phone-hacking report

 

James Murdoch's resignation as chairman of satellite broadcaster British Sky Broadcasting comes ahead of what is expected to be a very critical government report on his handling of the ethics scandal at News Corp.'s British tabloids.

Murdoch, in announcing his decision, alluded to the ongoing investigations into accusations of phone hacking and payoffs to police, allegedly by the News Corp.'s News of the World and the Sun. News Corp. owns 39% of BSkyB and was on track to acquire the rest of the company last year until the problems at the tabloids derailed the deal. Murdoch resigned in February as executive chairman of News International, the media conglomerate's British publishing division.

"As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company," Murdoch said in a statement released Tuesday. "I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organization." Murdoch will remain on BSkyB's board of directors.

Murdoch, the youngest son of News Corp. Chairman and Chief Executive Rupert Murdoch, has been the focus of scrutiny over his handling of the crisis as head of News International. Last December he informed Parliament that he did not read an email from senior executives saying that the practice of phone hacking -- listening in on voice-mail messages left for celebrities, members of the royal family and even crime victims -- could be widespread. 

More than a dozen journalists and executives with News International have been arrested and questioned by Scotland Yard in connection with its investigation into the allegations of phone hacking and bribery. Police are also probing whether News International was engaged in a cover-up of criminal activity at News of the World and its sister tabloid, the Sun.

James Murdoch, who served as chairman of News International until stepping down from that post in February, has consistently denied any knowledge of widespread phone hacking at the papers then under his command. He insists he was led to believe that phone hacking was confined to one "rogue reporter" at the News of the World who was convicted and jailed for his offense.

James and Rupert Murdoch are expected to appear before Parliament again as part of an ongoing inquiry into possibly illegal activities at the tabloids. The damaging scandal exploded last summer when the Guardian reported that News of the World operatives had eavesdropped on voice-mail messages left for a missing teen girl who was later found murdered.

Murdoch's resignation as chairman of BSkyB does not mean the powerful broadcaster won't suffer collateral damage from the probe into the newspapers. British regulators may investigate whether News Corp.'s tabloid troubles have made it unfit to be part of BSkyB. Nicholas Ferguson, currently the deputy chairman, will succeed Murdoch as chairman of BSkyB.

Once seen as the heir to his father's kingdom, James Murdoch has been severely tarnished by the controversy, although he still holds a senior position at News Corp. as its deputy chief operating officer and focuses on its international television business.

"The story continues to not go away, and the feeling that somehow James was involved to a greater extent than he's willing to let on continues to persist," said Doug Creutz, media analyst with Cowen and Co. "He keeps falling back further and further backwards along the line of defenses in terms of his involvement in the Murdoch empire. There ain't a lot left."

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 -- Dawn C. Chmielewski

News Corp.'s Teri Everett exiting; Julie Henderson to replace her

Rupert Murdoch's top spokesperson is leaving his media empire.

Teri Everett, senior vice president of corporate affairs and communications for Murdoch's News Corp., is exiting the media giant in two weeks.

Julie Henderson, head of communications for News Corp.'s West Coast operations, will take Everett's position and split her time between the company's New York headquarters and Los Angeles. JulieHendersonHeadshot

The departure of Everett, who told Murdoch late last year that she wanted to leave because she was "ready for something new," comes as News Corp. tries to distance itself from the phone-hacking scandal at its British newspaper unit that has led to the closing of the News of the World tabloid, the resignations of top executives and the arrest of several staff members.

She had been with the company since 2000, working primarily with former News Corp. Chief Operating Officer Peter Chernin before being promoted to Murdoch's spokeswoman in 2009.

One of the challenges for News Corp.'s communications staff has been managing the ethics scandal. There were disputes within the company over how best to proceed. Early on, News Corp. executives mistakenly thought that the revelations of phone hacking by members of News of the World into voicemail accounts of celebrities and crime victims would not explode into a global story. 

The communications team has had to walk a fine line between assuring Wall Street that the debacle has had little significance to the company's bottom line while appearing contrite to British officials probing the company.

In a statement, Murdoch said he was "grateful" to Everett's service to the company. Everett declined to discuss her future plans.

Henderson was not a surprise choice to succeed Everett. Over the last two years, she has developed a close working relationship with Chase Carey, News Corp.'s president and chief operating officer and the highest-ranking executive at the company to not have the last name Murdoch. Underscoring his reliance on her, Carey last year named Henderson to a high-level committee that brought the company's various divisions together to brainstorm new products, distribution models and approaches to marketing.

Carey is seen as likely to one day succeed Murdoch as chief executive until one of his children is ready to assume it. His youngest son, James Murdoch, had long been seen as the heir apparent, but he has been badly tarnished by the hacking scandal.

While Henderson will now be News Corp.'s top communications executive at the company -- she will serve in the newly created position of chief communications officer -- Murdoch will continue to also rely heavily on strategic advice from outside public relations firm Rubenstein Communications Inc. 

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Photo: Julie Henderson. Credit: News Corp.

The Morning Fix. Senior TV. 'Underworld' untouchable! Fox goes Spanish.

After the coffee. Before prepping for two weeks of non-stop Super Bowl hype.

The Skinny: Monday's headlines include News Corp.'s plans to launch a Spanish network in the U.S., a look at the weekend box office, a story about RLTV, a cable channel aimed at people over the age of 50 and a piece from Advertising Age about how ABC's "Modern Family" balances content vs. commerce when it comes to product placement. 

 

The Giants and Patriots could mean big ratings for next month's 2012 Super Bowl


The Daily Dose: With the New York Giants set to battle the New England Patriots in almost two weeks, NBC couldn't have asked for an easier Super Bowl to promote. Not only did the contenders play in a nail-biter during the regular season, they squared off in perhaps the most memorable Super Bowl ever four years ago when the Giants topped the then undefeated Patriots in a stunning upset. Last year's Super Bowl drew a record 111 million viewers: Don't be surprised if this year's tops that mark. 

 

Senior moment. RLTV, a cable channel founded by John Erickson, who made his fortune building retirement communities, hopes to convince Hollywood and Madison Avenue that the over-50 audience is worth reaching. The network, currently in 15 million homes, hopes to double its reach in the next 12 months and has attracted some familiar faces to go in front of the camera including Joan Lunden, Deborah Norville and Florence Henderson. But persuading big cable operators and advertisers to support the channel is no easy sell. A look at RLTV from the Los Angeles Times.

Caliente! News Corp. announced early Monday that it is teaming up with Colombian broadcaster RCN to launch Mundo Fox, a Spanish broadcast network in the U.S. that will compete against Univision and Telemundo. The announcement, made at the National Assn. of Television Program Executives conference in Miami, said the channel should debut this fall. Details on the new channel from the News Corp.-owned Wall Street Journal, which broke the story.

Unbeatable. Sony's "Underworld: Awakening," the fourth installment of a franchise I was unaware of until three days ago, finished at the top of the box office with $25.4 million. "Red Tails," a historical film about the Tuskeegee Airmen, delivered a stronger-than-expected $19.1 million. "Haywire," which I thought would do better, took in only $9 million. Coverage from the Los Angeles Times and Movie City News.

Man behind the moustache. With the last name Murdoch a little bit tarnished, News Corp. President and Chief Operating Officer Chase Carey, known for his handlebar moustache and his no-nonsense approach to deals, has risen even higher in stature at the Rupert Murdoch-controlled media empire. The New York Times looks at Carey. The Los Angeles Times last year profiled Carey and his "everyone pays" revenue strategy.

A fine line between clever and silly. ABC's "Modern Family" is on the top of every advertiser's list when it comes to product placement. But the show's producers are very selective about the companies they do business with and how products are incorporated into the show. The fear is being seen as a shill, a perception currently plaguing CBS's "Hawaii Five-O," which took heat last week for an over-the-top placement for the Subway sandwich chain. Advertising Age examines what it takes to make the cut and get your product in the hands of the cast of "Modern Family."

Report card. Steve Burke is wrapping up his first year as chief executive of Comcast's NBCUniversal. The New York Post gives him a report card that pretty much reads incomplete and questions whether Universal Studios stays in the portfolio. My question: Where would it go?

Inside the Los Angeles Times: A look at the unappreciated work of Hollywood makeup artists.

-- Joe Flint

Follow me on Twitter. You'll join an elite club. Twitter.com/JBFlint

Photo: The Giants and Patriots battling in the 2008 Super Bowl. Credit: Charlie Riedel/Associated Press

James Murdoch received email warning of phone hacking 'nightmare scenario'

JamesMurdochNewsCorp.

News Corp. Deputy Chief Operating Officer James Murdoch received an email in June 2008 that described the company's tenuous legal position because of the widespread nature of phone hacking by operatives of its now-defunct News of the World tabloid.

The internal emails, which were released Tuesday by the British Parliament's Culture, Media and Sport Committee, are important because they appear to belie Murdoch's statements to Parliament that he was unaware that illegal conduct involved numerous News of the World reporters as well as a private investigator hired by the tabloid. 

Murdoch consistently has insisted to Parliament that he did not learn until late 2010 of the widespread nature of the phone hacking. However, the emails lay out an exchange more than two years earlier between Murdoch, the 38-year-old son of media baron Rupert Murdoch, and Colin Myler, the former editor of the tabloid. 

"Unfortunately it is as bad as we feared," Myler wrote to James Murdoch in a June 7, 2008, email. 

The correspondence included another email, this one from the paper's in-house lawyer, which said News International -- the British newspaper unit of News Corp. -- would have to pay a soccer league executive Gordon Taylor about $1 million to settle invasion of privacy charges. The second email warned of a "nightmare scenario" because a second soccer league official, Joanne Armstrong, also had been targeted in the phone hacking.

Murdoch, in a separate letter submitted to Parliament this week, stated that he only became aware of the email chain last week. He noted that the 2008 emails had been sent to him on a Saturday afternoon, and that he failed to fully read them.

"I typically received emails on my BlackBerry on weekends. I am confident that I did not review the full email chain at the time or afterwards," Murdoch wrote to the head of the Parliament committee. "I would like to take this opportunity to reaffirm my past testimony that I was not aware of evidence that either pointed to widespread wrongdoing or indicated that further investigation was necessary."

News Corp. on Tuesday declined further comment.

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Photo: News Corp. Deputy Chief Operating Officer James Murdoch pictured in London last month. Credit: Oli Scarff / Getty Images

 

James Murdoch survives BSkyB vote despite dissent

Despite the taint of the persistent British phone-hacking scandal, James Murdoch on Tuesday was reelected as chairman of the powerful British Sky Broadcasting television service

Despite the taint of the persistent British phone-hacking scandal, James Murdoch on Tuesday was reelected as chairman of the powerful British Sky Broadcasting television service.

The youngest son of Rupert Murdoch received the support of 81.2% of votes cast in Tuesday's election. Nearly 19% of shareholders voted against him. James Murdoch, 38, also is deputy chief operating officer of News Corp., which owns 39% of the BSkyB shares, and has been considered the likely heir to his father's media empire. 

Stripping out the votes held by News Corp., James Murdoch received far less support. Slightly more than 55% of the independent shareholders voted for his retention on the board. Nearly 32% opposed his continued tenure, and the remaining 12.9% withheld their votes.

In October, James Murdoch survived a vote of no confidence during the annual meeting of News Corp. investors. At that time, he retained his position as a director in the New York-based media giant. However, he faces continued hearings in the British Parliament concerning his oversight of News Corp.'s U.K.-based newspaper division, and his handling of the phone-hacking scandal that led to the shuttering of News of the World tabloid. 

In July, fallout from the scandal forced News Corp. to withdraw its $12-billion bid to buy out the remaining shares of BSkyB. James Murdoch on Tuesday reaffirmed News Corp.'s continued role as a long-term shareholder in the television service.

In his statement to shareholders, he also said that BSkyB passed its long-term target of 10 million TV customers last year. "This is a significant achievement," he said.  "But more important than any single target is the way that our business has been transformed through constant appetite for change and a strong culture of continuous improvement."

The vote results were reported by RNS, a news service of the London Stock Exchange.

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Photo: James Murdoch leaves Tuesday's annual meeting of British Sky Broadcasting shareholders in London. Credit:  Gareth Fuller / Associated Press

James Murdoch leaves boards of British newspapers' parent firms

Jamesmurdoch3Story
News Corp.'s chief operating officer, James Murdoch, has resigned from the boards of the companies that operate the British newspapers the Sun and the Times.

Murdoch remains chairman of News International, the division that controls News Corp. publishing operations in Britain. However, he turned over day-to-day operations of the group to Tom Mockridge, who was named chief executive following the resignation this summer of former New International chief executive and News of the World editor Rebekah Brooks.

The 38-year-old Murdoch, son of powerful News Corp. Chairman Rupert Murdoch, stepped down in September as a director of Times Newspapers, which publishes the Times and the Sunday Times, and of News Group Newspapers, which owns the Sun tabloid and formerly published the now-defunct News of the World, which is at the center of the British phone-hacking scandal.

A person familiar with the matter described these units as holding companies that exist primarily for accounting purposes. The change comes as James Murdoch prepares to move to New York, as was announced in March with his elevation to the No. 3 News Corp. job.

"Following the appointment of Tom Mockridge as CEO of News International, in September James Murdoch stepped down from the boards of a number of News International subsidiary companies, including News Group Newspapers and Times International newspapers," the company said in a statement Wednesday. "He remains chairman of News International Group and director of Times Newspapers Holdings, the holding company of the Times Newspapers."

The development comes against the backdrop of a parliamentary investigation into allegations that the News of the World and other newspapers hacked phone messages left for members of the royal family, celebrities and crime victims in pursuit of salacious scoops. Murdoch has been called twice by the committee investigating the matter to answer questions about what he knew of the illicit conduct.

The controversy has sparked calls for press reforms in Britain from, among others, actor and phone-hacking victim Hugh Grant.

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Photo: James Murdoch looks on during the Digital Life Design conference on January 25, 2011 in Munich, Germany. Credit: Miguel Villagran / Getty Images.

Hugh Grant raises profile of hacking hearings in London

HughGrantMediaEthics

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.

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

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