Rupert Murdoch Isn’t Leaving News Corp., Selling His Newspapers or Making Any Other News
In retrospect, it should have been easy to predict that Rupert Murdoch wouldn’t use an extended interview with Wall Street and the press to make any news today.
- Wall Street (or at least the portion of Wall Street that provides analyst coverage for News Corp.) seems wholly uninterested in the PhoneGate scandal. That didn’t change during today’s call: The only questions from the investor sector that had anything to do with phone hacking were some mild ones about Murdoch’s interest in selling off his newspaper business. No surprise: The media mogul who grew up in newspapers, loves newspapers and thinks newspapers have a bright future in the digital age said he has no interest in selling his newspapers.
- And if the U.K. Parliament and a pie-thrower couldn’t get Murdoch to say much last month, then how could the lowly press? Murdoch (who, as I note below as well, is ultimately my employer) was prepared for the PhoneGate questions he got from my fellow scribes: No, he wasn’t going anywhere soon, and if he did, COO Chase Carey would run the ship, he told a reporter who asked about James Murdoch’s chances to succeed his father. Yes, he was committed to “total transparency” when it came to making sure there were no other News of the World scandals brewing in his empire. But he didn’t want to say anything else about it. And no, his board of directors was not jam-packed with his cronies, he told a reporter who asked about that. It would be interesting, in a setting that allowed for follow-up questions, to follow up with some of those questions, but today’s format wasn’t going to allow that.
Meanwhile, the people whose opinion Murdoch really cares about — News Corp. investors — took a look at the company’s earnings and shrugged their shoulders, leaving the company’s shares more or less unchanged after hours. (During the day, News Corp. shares were slaughtered along with everyone else.) Perhaps they have other stuff on their minds these days.
You can read about News Corp. earnings (pretty good) here. But odds are that most of you want to hear what Rupert Murdoch has to say about PhoneGate and its fallout. Pretty sure you’ll get to hear a bit about it this afternoon.
For those of you who haven’t tuned in to News Corp. earnings calls before: Wall Street gets to tee off first, starting at 4:30 New York time. Then reporter types, some of whom may work for Murdoch, will get their shot around 5:15. I’ll be here for the duration (here is where I note that News Corp. owns this Web site). So come on in and take a load off.
4:33 pm: Welcome! Introductory remarks coming up. On the call: Murdoch, COO Chase Carey, CFO Dave DeVoe.
4:34 pm: Rupert, reading from script. Our financials this quarter were “exceptional.” Full year “very good.” Proud of team and *all* our businesses.
4:35 pm: That said, we have some “challenges” re: News of the World. “The kind of behavior that occured in that newsroom has no place in” our company. Also: “Make no mistake, Chase Carey and I run this company as a team” (i.e. I’m not going away any time soon).
4:37 pm: Joel Klein’s on the case, etc. “There can be no doubt about our commitment to ethics and integrity.”
4:37 pm: And like we said before, PhoneGate has nothing to do with the rest of the company.
4:37 pm: “Our position is strong, and our future is promising.”
4:38 pm: Bummed about the BSkyB deal, though.
4:38 pm: Now that we have all that extra cash on hand, though, we’ll think hard about what to do with it. “Re-examining our near and long-term opportunities” on top of that $5B stock buyback we announced.
Now here’s DeVoe, reading from script. Will tune out on most of this, but if you’re into it, again, you can see it here.
4:42 pm: Scanning Twitter, I see that the FT’s Andrew Edgecliffe-Johnson pronounces Murdoch’s script reading to be “forceful.” Agreed! Much more at ease than when he was sitting in front of Parliament this month. Then again, no cameras, or pie.
4:45 pm: Speaking of Twitter, my stream has a whole lot less Murdoch-chatter than we saw last month during his UK appearance.
4:46 pm: Myspace generated $230 million in operating losses over the last year. Amazing. That’s separate from the $254 million writedown the company took (I believe).
4:48 pm: The money News Corp. won’t lose from Myspace next year will be offset, in large part, by the money it won’t see from News of the World.
4:49 pm: And here’s Carey, who wants to talk about “operating priorities” and balance sheet plans.
4:50 pm: Hey, look at that! Chase Carey stressing digital distribution. That’s a new one.
4:51 pm: Even *more* digital talk from Carey. Very unusual. Talking about the eight-day window/authentication plan it just rolled out for Fox.com and Hulu. Promises “many more” digital plans.
Also! Will be vigilant about programs that threaten our product, like $1 rentals. (Did I just hear that correctly? Would mean that Apple deal is over, if so.)
4:55 pm: Analyst wants to know cable TV pricing, wonders if company won’t be able to raise affiliate (and eventually your) prices.
Not a problem, says Carey. More growth coming next year in U.S., and then lots coming internationally. “We feel very good” about cable in general. It’s matured, and the economy is rough, “but the demand for this bundle out there in the United States continues to be, you know, strong.”
As Chase talks up cable business and TV business, Rupert chimes in to talk up ratings.
4:59 pm: Q: Your ad dollars looked much stronger than other people’s. What’s up with that?
Carey: Advertising is good because our ratings are good. American Idol, Fox News, etc. Looking forward, national business is great. Figures broadcast ads flat for next year, cable up a lot. Local business “not as robust” as national. “Looks like it will be a better for us in September.” That is, he’s not allowing that the whole possible economic collapse thing might chip away at the ad biz.
Q: For Rupert: August 2008, you were asked about buying back stock, and it was much cheaper then than it is now, and you didn’t want to do it. So why are you buying back shares now?
Rupert: “It’s a question of relative values.” In 2008, I was “coy about it, and of course I couldn’t say so openly” because we were saving for our giant BSkyB bid.
[Missed q, sorry]
5:04 pm: How’s the local TV business doing? Also, with the new eight-day delay “authentication” deal, do you have those in place with most distributors (so far just Dish announced) and aren’t you losing some eyeballs by doing it piecemeal?
5:06 pm: Missed first part of answer. On authentication, Carey is explaining justification for the plan, but not answering Q, which is about how many of these deals he has done, and what rolling them out piecemeal does for this business.
“I’m not going to get too deep into all our negotiations” but this will become standard for our deals.
Carey still explaining why authentication isn’t bad. “We think it’s a really great experience.” But yeah, in short term, may be some “sacrifice” by not chasing a quick buck.
Q: On Fox Biz. WTF happened to that? “You don’t even mention it as an undermonetized asset.”
Rupert: We’re doing okay. Sometimes during the day we beat CNBC. We’re at cash break-even. We need more distribution, though.
Carey: “I could have put it on the list” of assets we like. I just didn’t include everything. Don’t read anything into it. “We think this channel really is an exciting growth area for us as well.”
Q: Boring question about print operations in Australia. Skipping.
Rupert still talking about Australian print newspapers. It’s his roots, after all.
5:14 pm: For Carey: Are your return on capital projections reasonable?
5:15 pm: And here I’ll just note that there have been zero questions from Wall Street about PhoneGate so far. That’s not a surprise — Wall Street buys the argument that PhoneGate has nothing to do with most of News Corp.’s biz — but figured someone might want to toss them a lay-up.
5:16 pm: Q for Rupe: We’ve asked you about spinning of newspapers before. What about now?
“I’m feeling very confident” about newspapers. “Shocked and appalled” about NOTW, but that was a “tiny corner.” Everything else good, WSJ doing great.
5:18 pm: Sorry, missed this one again. About writedowns in TV. Also, a question about operating income for film business. Rupert says it’s a “very very dangerous thing” to predict movie biz.
5:20 pm: DeVoe (I think) goes back to the buyback question, says buying back stock makes more sense now because “we’re in an entirely different place today.”
5:21 pm: Are you factoring in NOTW closing costs into your guidance?
Murdoch: Nope. “First we have to get to the bottom, exactly, of what happened. Were there a dozen guilty people, or were there two dozen?”
5:23 pm: One last Wall Street questions: Will you consider more structural changes at company? If not, why not?
Rupert: “I think we’ve got a very good mix.” We’ve got one or two … things we would sell, “but no major restructuring.” Chase: Right. What he said.
Rupe on digital: “We’ve learned a tremendous amount.” Have good people working digital now — our newspaper apps are great. “That will expand, and the money from that will expand as more people have tablets, and what is interesting is we’re getting tremendous takeup [?], not just from the iPad, but on the Kindle.”
Time for press questions. Do your best/worst, fellow wretches.
Q: Recently you said you wanted your kids to run the company. Do you think BOD will still support James running the company in the near future?
Rupe: “I hope the job won’t be open in the near future” [much laughter] … but “I have full confidence in James.”
And now my line is dead. Bear with me as I try an alternate route …
5:29 pm: Sorry, missed at least one there, back. Appears to have been about Hulu, and it appears to have been a non-answer from Carey. But I’ll backfill if I can.
5:30 pm: For Rupert: What are you doing to look at the rest of the business to prevent NOTW-style scandals?
Rupert: “We’re absolutely committed to total transparency” throughout the company but don’t want to get into it.
Yikes. One last question. Superfast Q&A: You said board said it makes sense for you to stay as CEO and chairman. But everyone says your board is not really independent.
5:32 pm: Murdoch cuts him off. “That’s not true.” Viet Dinh is a “completely independent” director. “We are in compliance with good governance.”
Annnnnnnnnnd that deflated balloon sound you hear are the sighs of my fellow media watchers, who got nothing of value from Murdoch today.
Going to sign off for now, thanks for listening/watching.