 |
Last month, we broke the new on the International Phone Hacking Scandal but just this past week Rupert Murdoch, the Chief Executive of News Corp. addressed investors for the first time. Murdoch stood up on Wednesday during the company's earnings call with analysts and said "I want to be very ... (407 words)
Update: 'News of the World' Phone Hacking Scandal
Dave Smith
Last month, we broke the new on the International Phone Hacking Scandal but just this past week Rupert Murdoch, the Chief Executive of News Corp. addressed investors for the first time. Murdoch stood up on Wednesday during the company's earnings call with analysts and said "I want to be very clear about where I stand; I've run this company for more than 50 years. The kind of behavior that occurred in the newsroom has no place in News Corp."
Murdoch's admonition was in regards to the conduct of journalists working for the now-defunct 'News of the World.' These journalists had allegedly used caller ID spoofing services to intercept voicemail messages of murder victims and soldiers killed in combat. The scandal forced the closure of the 168 year-old publication. Murdoch is trying to reassure investors, who have been scared off by the scandal, that the company is doing very well and its reflected in their fourth-quarter earnings.
News Corp. reported a 22% decline in its fiscal fourth quarter from the previous year's net income. The financial results were affected by the $254 million loss the company recorded for the June sale of the original social networking site, MySpace. News Corp. incurred a breakup fee of approximately $63 million when the company decided to withdraw its bid for BSkyB's remaining shares. The company was forced to walk away from the satellite broadcaster because of the turbulent phone hacking scandal. These recent losses have caused the company's stock to drop 24%, but Murdoch seeks to set things right and reassure investors of the future of News Corp.
News Corp. is looking forward to an acquisition of a $680 million London based television production company, Shine Group, run by Murdoch's 42 year-old daughter as well as an expected increase in company earnings.
Amidst the bad PR for News Corp. and the continued public outrage, Murdoch is both trying to get his conglomerate back on track while undergoing the continued investigation. The twelfth suspect was arrested just last week, an 11-year veteran of the Metropolitan Police Service. The scandal continues to heat up as Rebekah Brooks, the former British newspaper chief, was arrested Sunday on suspicion of not only phone hacking, but bribing police as well. Police were allegedly bribed into providing news tips and other inside information to reporters. Murdoch has his hands full, as it seems that the scandal is only going to worsen as more details are learned.