The 80-year-old media tycoon experienced another spell in the line of fire yesterday, as he appeared before shareholders of News Corporation for the first time since several of his senior executives were arrested in connection with a scandal which continues to rock the establishment on both sides of the Atlantic.
Speaking at the company’s AGM in Los Angeles, he told Tom Watson, the Labour MP who has spearheaded a Parliamentary investigation into phone hacking, that reports of police interest in as many as three other private eyes that his newspapers employed are nothing more than: “recent rumours”.
But in a series of contrite moments, he pledged to “admit to and confront our mistakes,” and said he was “personally determined” to right any wrongs that have been committed by his organisation. “I promise you, absolutely, that we will stop at nothing to get to the bottom of this and put it right,” he added.
It was by no means the humblest day of his life, but Mr Murdoch nonetheless experienced a gruelling hour-and-a-half inside the Zanuck Theater at 20th Century Fox’s Hollywood studio. Faced with a barrage of hostile questions from investors and shareholder activists, his mood swung from angry, to amused. At times, he even decided to lighten the mood cracking a joke.
Such a moment came shortly after Watson, who was appearing as a proxy for the US trade union organisation AFL-CIO (a News Corp shareholder), asked Murdoch if he was aware of the activities of private investigators Jonathan Rees and NOTW employee Alex Marunchak, who are suspected of attempting to gain private information about Kate Middleton and Gordon Brown.
“News Corp is potentially facing a Mulcaire II,” Mr Watson said, referencing Glenn Mulcaire, the investigator jailed in 2007 for hacking the phones of the royal family. “Yet you haven’t told any of your investors about what is to come.”
Murdoch denied any knowledge of the duo, and said he had nothing to hide. A few minutes later, he added: “Just to show our feelings, we even agreed to have Mr Watson on Fox News this morning.” Then he quoted the channel’s slogan: “You see, we’re fair and balanced!”
At another point, Murdoch light-heartedly confronted a cassock-wearing Catholic priest who had stood up to ask if he was responsible for the ethical culture that prevails inside his business empire. “Are you saying,” Murdoch wondered, “that I am a very bad person?”
All told, it was a schizophrenic performance. One moment, Murdoch was whacking the lectern as he issued an on-the-record denial of allegations that thousands of people had their phones hacked by his organisation (the number is far smaller, he claimed). The next, he was poking fun at a fund manager in charge of the Church of England’s financial portfolio, chuckling: “Your investments haven’t been all that great recently, have they?”
The business of the day – on paper, at least – involved votes on a series of resolutions regarding the management of his $60bn conglomerate, which has 51,000 employees around the world. Thanks largely to the scandal which engulfed the company this summer, forcing it to shutter the NOTW and abandon its takeover bid for BSkyB, growing numbers of shareholders are concerned at his stewardship.
To that end, several institutional investors were preparing to oppose the appointment of the 15 company directors seeking re-election, saying the board has become insufficiently independent. Most of the directors are close friends of the Australian tycoon, and two are his sons, James and Lachlan. They were in the front row of the auditorium, but did not speak during the AGM.
A separate motion calling for Murdoch to be stripped of his chairmanship of News Corp, which he currently holds in conjunction with the chief executive’s role, was also hotly debated. Supporters said it will allow management to have better oversight, and give them proper independence from Murdoch. The board disagreed.
Other speakers criticised Murdoch’s pay deal, claiming that the $30-odd million he took home last year is four times the amount earned by his peers. Murdoch responded to that observation by noting that News Corp has enjoyed a successful year in which profits have grown and its shares have risen by around 15 per cent.
The surreal of proceedings was partly a result of the setting of the AGM, in a large theatre several thousand miles from New York, where News Corp is based. Only a few dozen investors made the trip to Los Angeles, meaning they were almost outnumbered by journalists. Security was tight, thanks perhaps to the fact that Mr Murdoch was attacked by a custard pie in Parliament this summer.
Inside, Murdoch stood at a lectern where he relied on an autocue to deliver his 13-minute introductory speech. Ironically, Fox News has recently been fiercely critical of Barack Obama for relying on a similar device.
The outcome of the day’s votes was due to be announced late last night. But the chances of Murdoch actually being on the losing side of them are almost non-existent. Despite owning roughly 10 per cent of News Corp, he controls around 40 per cent of its “voting” stock, an arrangement critics at the AGM described as unfair.
Analysts are instead focusing on what percentage of shareholders vote against Murdoch. A figure of 20 per cent or larger will be a severe embarrassment, and is expected to add to pressure for reform. It may also cloud Murdoch’s future succession plans.
