Rupert Murdoch Earnings Call: News Corp Faces Wall Street, Investors For First Time Since Hacking Scandal
Rupert Murdoch faced Wall Street and the press for the first time since the phone hacking scandal plunged his News Corp. into its deepest-ever crisis. Murdoch used the occasion to express contrition about the scandal, but he also doubled down, insisting that he is staying on as CEO, that he is not selling his newspapers and that the worst of the scandal is behind him.
Murdoch appeared on News Corp.'s quarterly earnings call for the first time in a year, amidst shareholder skittishness and the potential dismantling of his family dynasty.
Though the scandal has died down a bit in recent weeks, it is by no means over. Just Wednesday, Scotland Yard announced it had arrested another former editor at the News of the World, the paper where the hacking crisis began.
Murdoch was forced to fly to London and testify before Parliament for the first time ever as a result of the scandal. (That's where he was infamously attacked with a shaving cream pie.)
Murdoch and his deputies, COO Chase Carey and CFO David DeVoe, spent much of the roughly hour-long call discussing some of the more granular details of News Corp.'s holdings. Most of the financial analysts on the call did not directly mention the hacking scandal, or ask any questions about whether Murdoch still plans to name his son James as his successor. Murdoch said that he has "complete confidence" in James, but stressed the closeness of his and Carey's relationship. He batted away questions of succession by saying he hopes the top News Corp. job "won't be open" in the near future.
Murdoch also once again said he was "shocked" by the criminality at the News of the World, and was determined to get to the bottom of the scandal.
"Were there a dozen guilty people or two dozen?" he asked rhetorically.
For a complete recap of the call, check below.
Peter Kafka reports:
First look at News Corp earnings: The media conglomerate reported earnings of $0.35 per share on revenue of $8.98 billion; Wall Street had been looking for $0.30 a share and $8.44 billion.
Murdoch also apologized, again, for the hacking scandal, writing, "While it has been a good quarter from a financial point of view, our company has faced challenges in recent weeks relating to our London tabloid, News of the World. We are acting decisively in the matter and will do whatever is necessary to prevent something like this from ever occurring again."
before the conference call lacks much of the defiant spunk News Corp. is known far. Way too many acoustic guitars! Where's the punk cheek?
With Rupert Murdoch are COO Chase Carey and CFO David F. DeVoe.
The performance thus far has been "exceptional," Murdoch says. He then talks phone hacking.
"I have run this company for more than 50 years. The kind of behavior that occurred in that newsroom has no place within News Corporation."
He also addresses his role in the company:
"The board and I believe that I should continue in my current role," he says, "but make no mistake: Chase Carey and I run this company as a team."
Murdoch says he's "disappointed" about the end of the BSkyB bid, but that it was "no longer feasible" for News Corp. to buy it up.
Murdoch now turns it over to David DeVoe, who talks about the black hole that was MySpace. (The company is happily rid of it now.) Also some of the other business things: European channels! FX! And such and such.
DeVoe continues his very granular analysis of every aspect of News Corp.'s performance. It's tedious and dull, but also a reflection of just how many branches this company has.
was a real, huge drag! The site lost $230 million before it was sold at a $254 million lost. Staggering stuff.
'Our most exciting markets' are in Latin America, India and Southeast Asia, he says.
The financial people come first, which means snoozers about affiliate fee growth and Pay TV. Don't worry, the good stuff's coming up! Nobody in the media is on the call for anything but phone hacking.
The question is about buying back stock (which News Corp. just did to the tune of $5 billion.) Why does Rupert want to do it now, when he originally didn't?
He starts about relative values, saying that he didn't buy back the stock in 2008 because he was saving up to buy BSkyB. "Now that's changed," he says.
|@ davidfolkenflik : Analysts on News Corp call doing what analysts do: fixate on ad rates, buy backs, profits etc. No focus so far on leadership, governance.|
Rupert Murdoch takes the opportunity to praise Fox Business, whose ratings and profits he says are both up.
Rupert Murdoch praises the "biggest and most efficient" printing plants that he has in Britain. (So he knows about the printing plants, but not about the top editors' activities in the UK, we guess.)
Finally, an investor addresses the hacking scandal. "In light of what's happened," he asks, is Murdoch more open to selling his newspapers? He says that, since everything is fine at his papers except for the "one tiny corner" that was the News of the World, he's keeping the papers.
Murdoch on News of the World: "Were there a dozen guilty people or two dozen? We are cooperating totally 100% with the police in their investigations."
Expect few questions about Harper Collins and/or Sky Italia.
First question: succession. Will James be allowed to succeed you in the near future?
"I hope that the job won't be open in the near future!" Murdoch continues:
"Chase and I have full confidence in James. That's all I need to say about it. Succession is a matter for the board."
Murdoch also denies any problems with the News Corp. board, which many have said is too cozy. "It's an excellent board," he says.