Rupert Murdoch attacks 'the English' as he rules out Sky bid
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.
Friday 29 June 2012
Rupert Murdoch vowed not to make a new bid for BSkyB after the division of News Corporation yesterday, saying he would focus his media empire on the US because "the English" had made him unwilling to invest any further in the UK.
The News Corporation chairman's anti-English outburst came in an American television interview after the company confirmed it would split its newspaper businesses, which include The Sun and The Times.
"No, I think we've moved on in our own thinking on that," Mr Murdoch replied, when asked if the split made it possible to revive the £7.8bn bid to take full control of BSkyB. "There are billions and billions of dollars. If Britain didn't want them, we've got good places to put them here. I am a lot more bullish on the US than on the UK. I would be a lot more reluctant to invest in new things in Britain today than I would be here."
The interviewer, on Mr Murdoch's business news channel Fox Business, asked if his reluctance was down to the political firestorm over phone hacking, to which the mogul replied: "No, just the English."
A reluctant-sounding Mr Murdoch sanctioned the spin-off of News Corp's publishing division this week, after years of pressure from outside investors who believe newspapers are dragging down the overall company. News Corp's fastest-growing and most profitable businesses are concentrated in television and entertainment, where it owns the Fox networks in the US and the 20th Century Fox film studio.
These entertainment assets account for almost 90 per cent of News Corp's profits, with barely 10 per cent coming from the publishing arm.
The standalone publishing company will wrap Mr Murdoch's newspapers in the UK, the US and Australia with HarperCollins book publishing. He will remain chief executive of the core News Corp entertainment group, leaving open the possibility that he will no longer have day-to-day involvement in his newspapers when the split takes effect in a year's time. But the Murdoch family will still control both companies.
News Corp shares have leapt more than 10 per cent since the split was mooted earlier this week, partly because the entertainment business can be more highly valued without low-profit newspapers and partly because it could be insulated from the legal costs of resolving the UK hacking and bribery scandals, which would stay with the publishing arm.
The moves failed to assuage Mr Murdoch's parliamentary critics, however, suggesting the mogul is right in his calculation that a bid for BSkyB would still be impossible, even after the split.
"No matter how much they rearrange the furniture the real problem with chateau Murdoch is the ownership," said Labour MP Chris Bryant. "The two men in charge have shown themselves completely unable to run a proper corporate management structure or to ensure their company complied with the law. Why they would be better at running two companies than one I don't see."
Tom Watson MP also dismissed the changes as cosmetic: "News Corp are not through this scandal. They will have to account for the illegal activities of their other private investigators before this is over. And Rupert Murdoch, like it or not, will be held responsible."
Mr Murdoch presented the split as a clear-eyed business decision unrelated to the hacking scandal, although the events in the UK newspaper arm had emboldened his critics within and without the company to push for the change. "I've been 58 years building a company," he said. "Gradually I realised the logic of it and how all the companies would be better managed."
He added that it was "highly unlikely" that his eldest son, Lachlan, would run the publishing division, as some commentators have speculated.
Brian Cathcart, co-founder of Hacked Off and a professor of journalism at Kingston Journalism, said Mr Murdoch's anti-English remarks amounted to "empty rhetoric" from the mogul. "If he dislikes Britain it's because he has been found out in Britain. The culture which he engendered and sustained at the News of the World has been exposed. If he is wary of Britain, it's because of that."
Chase Carey: The big winner
Chase Carey has spent the bulk of his business career in television, developing the Fox Sports channel for Rupert Murdoch and News Corp's satellite businesses in Europe and Asia. Yet he has spent much of his time since 2009 fighting tedious legal scandals at a declining newspaper business that accounts for just a sliver of the company's profits.
The moustached executive, 57, had never expected to take over from Mr Murdoch. He was given great power over the entertainment divisions while Mr Murdoch tinkered with his newspapers, but it was James Murdoch who was being groomed as successor, until his fall.
Now Mr Carey has the upper hand as Rupert Murdoch conceded yesterday that Mr Carey and the numbers guys at News Corp had tipped him into agreeing the split.
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