If I were a stockholder of News Corp. (NYSE: NWS),
I would be concerned about what has been happening to our company
lately. The stock is up nearly 10% year to date, though it's trended
down nearly 3% in the past month, apparently because so many questions
The integrity of our journalism has been besmirched by phone hacking
charges against trustworthy journalists, some 49 of whom are already
under arrest. Not to mention charges of surreptitious payoffs to the
police, perverting the course of justice.
Our encryption business is under a cloud, charged in a BBC
documentary and an Australian financial newspaper investigation with
engaging in industrial espionage and pay TV piracy, selling of smart
cards and encryption codes to shady Websites, catering to people who
want to watch pay TV without paying... The swine!
Our once heir apparent to the company throne has been dragged through
the parliamentary slime for the third time this week, even though he
has already been sacked and sent to Coventry (New York), where his
duties have been relegated to the equivalent of having lunch, but no
longer getting the best tables in the Pool Room of the Four Seasons.
And now our chief executive Rupert Murdoch has gone before Lord
Justice Sir Brian Leveson, ordered by the prime minister to have a look
at the cesspool that is the British newspaper business, and denied he
has any influence in politics.
What, I would think, is happening to our company?
Our chief executive on Wednesday stood, or sat, before the very tough
Judge Leveson and claimed his primary purpose in heading a $60 billion
media empire that owned 40% of the newspapers in the UK was to set a
model of ethical behavior in that empire.
It was unthinkable that he should try to influence the selection of a
prime minister. Others may curry favor with him, but the favor is not
returned. True, after the upset victory by the Tory John Major over
Labour's Neil Kinnock in the 1992 election, The Sun headline read: "It
Was the Sun Wot Won It." But Murdoch chewed out the offending editor.
Some would think that a man who published more papers in English than
anybody in the world and controlled media on six continents would at
least have some impact beyond his dedication to the truth.
He is too modest, by half.
Ask those who have seen the chief come into a newspaper city room and
roll up his sleeves, rewrite headlines, the stories, and the
editorials, throw out the front page -- and then throw out the editors.
Ask Sir Harold Evans, the editor of The Sunday Times of London, who wrote a whole book (Good Times, Bad Times)
about the chief's attempt to influence the UK's most distinguished
newspaper, even after assuring the monopolies commission he would never
do such a thing.
Could this be our leader, the powerless power broker obsessed with
setting ethical behavior in his empire? Has he become as "unbalanced" as
he accused Gordon Brown of being -- the former Labour prime minister
who blamed the truth-seeking media mogul for the media campaign against
Is he showing his age? Or could he unknowingly be the media's Manchurian Candidate on some kind of truth crusade?
Stockholders expect him to throw his weight around. That's the secret
of the success of News Corp. Murdoch always had the reputation of being
a fearful media mogul. Why, when he first invaded the United States in
1972, Time magazine had a picture of him as King Kong on top of the
Empire State Building.
The company especially needs that Rupert in its next big battle at Ofcom,
the "independent regulator and competition authority for the UK
communications industries." The UK media regulator has launched an
investigation into Sky News, a channel run by British Sky Broadcasting Group plc
(LSE: BSY) -- more commonly known as BskyB -- following its admission
that it hacked emails of individuals suspected of criminal activity.
The regulator is now enquiring whether News Corp. is a "fit and
proper" owner of a broadcasting license, raising the possibility that
watchdog Ofcom will force News Corp. to cut or sell its stake (39.1%) in
a highly profitable pay TV operation.
Rupert the nice guy, the truth seeker. Well, that's his story, and he is sticking to it. At least this week.
But as a stockholder I would remind him of what Winston Churchill
said in the early days of World War II, after Adolf Hitler claimed to
have shot down 151 planes that day, when the Royal Air Force actually
lost 13. If these claims continue, Churchill warned, "the Fuhrer's reputation for veracity of statement might be seriously impugned."