Murdoch empire lost £100m by closing NOTW
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Thursday 03 November 2011
The closure of the News of the World has cost Rupert Murdoch's News Corporation close to £100m, it was revealed last night.
In quarterly results reported to Wall Street, News Corp recorded a one-off restructuring charge of $91m (£57m) and said its publishing division, which includes all Mr Murdoch's papers, suffered a $68m (£43m) fall in profits.
The results were the first to cover the period after Mr Murdoch shut the NOTW in July in an attempt to draw a line under the phone-hacking scandal. The restructuring charge was primarily the result of redundancy costs, while the profits plunge at the publishing division "reflects the impact from the closure of the News of the World in the UK, as well as lower advertising revenues at the Australian newspapers and integrated marketing services business", News Corp said.
Mr Murdoch last night left his deputy, Chase Carey, to deflect questions on the hacking scandal and on the position of James Murdoch, who is currently deputy chief operating officer and is being groomed to succeed his father as chairman and chief executive.
Mr Murdoch Snr was advised by his daughter Elisabeth that James should stand down earlier this year because of the mishandling of the scandal, the magazine Vanity Fair claims.
Both Elisabeth and Rupert Murdoch separately suggested to James that he should "take a leave" from the company this summer, only for Rupert Murdoch to "change his mind" following a "sleepless night", the magazine claims in an article published tomorrow. The story is based on information supplied by News Corp insiders and sources close to the Murdochs. Mr Carey said: "We have great confidence in James. James has done a good job and we are not contemplating any changes."
Operating profit at the publishing division – News Corp's UK newspapers, The Wall Street Journal and New York Post in the US, and the book publisher HarperCollins – fell from $178m to $110m for the most recent three-month period. That dented News Corp's overall profit. The company posted net income of $738m, compared to $775m this time last year.
Mr Carey defended the make-up of News Corp's board, whose members have been called cronies of the Murdoch family and who suffered a protest vote at a recent shareholder meeting. "We're proud of the board. It has provided unique leadership and value to the business," he said, adding its membership would continue to "evolve".
Vanity Fair claims that Elisabeth Murdoch declined to take her seat on the News Corp board because her lawyers and her husband, the PR man Matthew Freud, advised her that "it was best not to take the seat, in order to stay as far away from the [phone-hacking] scandal as possible".
The magazine also suggests an eventual scenario in which eldest son Lachlan could become chairman, with James as chief executive, and their sisters Elisabeth and Prudence stand to one side. But then, it admits, Rupert could continue as chairman and chief executive for a further decade or more.
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