Posts tagged "News Corp"

Rupert Murdoch’s pay to reach almost $30m after News Corp split

Media mogul’s pay could be 15% higher if he hits targets after spin-off of entertainment arm as 21st Century Fox

Rupert Murdoch will receive almost $30m (£19.4m) for running the two companies that will emerge later this year from the separation of News Corporation’s publishing and entertainment businesses.

For the year ending June 2014 he will receive up to $28.3m in remuneration from the two businesses, with a base salary of $8.1m, a target bonus of $12.5m and long-term incentives of $7.7m. This is 15% more than the $24.6m total remuneration he is eligible to collect at the end of June this year as News Corp’s chairman and chief executive.

News Corp, which will be split in two in the summer, revealed in a filing with US financial regulators on Friday that the billionaire’s pay is “competitive and appropriate given Mr Murdoch’s responsibilities associated with two separate public companies”.

Most of Murdoch’s pay will come from running 21st Century Fox, by some distance the bigger and more profitable of the two News Corp businesses that are to be floated separately in New York later this year.

Murdoch is to be chairman and chief executive of 21st Century Fox, which encompasses the Fox film and TV studios, the eponymous US TV network, cable channels including FX and Fox News, and News Corp’s 39.1.% stake in BSkyB.

Just $5m of his $30m total remuneration package comes from his role as executive chairman of the newspaper and book publishing business, which is retaining the News Corp name and includes assets such as the Times, Sunday Times, Sun, Wall Street Journal, the Australian and HarperCollins.

Murdoch will receive a base salary of $1m, a $2m target bonus and a $2m target long-term incentive opportunity for his News Corp work.

The company said that Murdoch’s pay regime has been overhauled to introduce a much larger element of bonuses dependent on performance-based targets, with his overall base salary staying at the current level of $8.1m.

“A significant portion of [Murdoch's] target total direct compensation [will be] at-risk and linked to performance … which will further align Mr Murdoch’s compensation with the interests of stockholders,” News Corp said.

Murdoch’s total compensation is likely to be higher than the target amounts outlined on Friday when factors such as pension contributions and other benefits are included. In the year to the end of June 2012 he was paid almost $30m.

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Leveson: leave politicians to decide on media plurality

Leveson report suggests only minor changes for future mergers such as Murdoch empire’s BSkyB takeover bid

Lord Justice Leveson is highly cautious, even timorous, on what will be the key question for many of his readers, of how overweening power exercised by some media proprietors might be curbed.

He says politicians should be the ones to carry on deciding whether to intervene when they consider media plurality is threatened, rather than autonomous regulators: “It is in the nature of large media organisations that every one of us is exposed to their output on a regular basis and we all have views (and, in some cases, perhaps prejudices) that might affect such a decision if allowed to do so …

“It seems to me that those who argue that a public interest decision is rightly for a democratically-elected decision-maker are right. It is that person who is accountable to parliament and the electorate: that is the nature of our constitutional arrangements.”

All he recommends, for future media mergers, such as the Murdoch empire’s attempt to take total control of BSKyB, is a set of relatively minor improvements to transparency during the process: “The secretary of state should consult relevant parties as to the arguments for and against a referral, and should be required to make public his reasons for reaching a decision one way or the other.”

Leveson concedes that this might not appear to make much change, but he says this would make it easier to challenge poor decisions in court by judicial review: “It will ensure both the highest standards of probity and that a very rigorous test is applied to the reasoning behind the eventual position.”

He says it is “unarguable” that there needs to be more scope for the media regulator Ofcom to look regularly at plurality problems, and not merely when a merger or a takeover is occurring, but adds ” the precise mechanism for doing so is essentially a technical issue on which the inquiry is not best placed to reach a definitive conclusion”.

Anyone who thought Leveson would take a hatchet to the former culture secretary Jeremy Hunt for his behaviour over the Sky bid has had their hopes dashed.

Although he describes the Sky bid events as “an illuminating case study” that would cause a perception of bias, Leveson analyses the manoeuvrings over the ultimately withdrawn bid to take over 100% control of BSKyB in a way that broadly supports the already-presented government version of events.

He does not back the claim that there was a secret deal in which Murdoch’s papers would support the Conservatives in return for explicit commercial concession.

He largely exonerates Hunt from actually biased behaviour, and merely accuses him of a lack of supervision of his special adviser, and an “unwise” failure to spell out how closely he had been communicating with James Murdoch before being given the job of deciding on the Sky bid.

Leveson accepts the official line that Hunt’s junior special adviser, Adam Smith, who subsequently resigned, merely went too far out of inexperience and allowed himself to be ensnared into “inappropriate” email and text correspondence with the lobbyist, Frederic Michel, who was carrying out a “charm offensive” on behalf of News Corp.

This left Smith exchanging messages that appeared to accept “Mr Michel’s use of the language of common cause and conspiracy”.

“When faced with the intimacy, charm, volume and persistence of Mr Michel’s approaches, Mr Smith was put in an extremely difficult position.”

He got “way to close” to the lobbyist, “ultimately, as I have concluded, probably passing on confidential information about Government thinking which should never have been imparted to News Corp.”

But Leveson accepted: “There is much to say by way of mitigation for Mr Smith. He was inexperienced, had been involved in government for a matter of months and had never before been involved in (even if he had ever heard about) a quasi-judicial process. He did not receive what was to be, for him, sufficiently clear or detailed guidance”.

Leveson contents himself with a dry hint that the official version of events may not, in all eyes, be wholly credible: “I must admit to finding it surprising that Mr Smith, who had worked for Mr Hunt so closely and for so long should have kept him unsighted on the way in which he was performing what he saw to be his duty; that, as I understood it, was the role of a special adviser – to be the ‘eyes and ears’ of his principal. Both men, however, make it clear that Mr Hunt was unaware of the nature, and extent of his contact with Mr Michel.”

Penguin authors and agents ‘terrified’ at prospect of News Corp takeover

News Corp deal would leave Penguin’s reputation in tatters, says co-author of book on downfall of News of the World

Rupert Murdoch’s News Corporation, described by Labour MP Tom Watson as a “toxic institution”, could find itself publishing his book on phone hacking as the publisher considers a bid for Penguin.

The reported £1bn offer from News Corp’s publishing arm, HarperCollins could be put to the board of parent company Pearson as early as Wednesday, the Sunday Times said. Any approach could spark a bidding war, as Pearson is already in talks with Europe’s biggest publisher, Bertelsmann, which owns Random House.

A deal with Random House would create a publishing house responsible for a quarter of English language books worldwide. A HarperCollins linkup would give the firm a market share of about 20%. Both are likely to face inquiries from the competition commission before a deal is finalised.

A number of writers warned that Penguin’s reputation would be damaged by a Murdoch takeover. Martin Hickman, co-author of Dial M for Murdoch, published by Penguin, said: “Penguin have a great reputation. They are a publisher with integrity and a wider social mission, so are not the most nakedly aggressive publisher out there. But with HarperCollins, their virtues would be lost.

“The idea of News Corp taking over Penguin is nightmarish for our book. I don’t think we’d see a paperback edition published by them and certainly not any updated editions. I don’t have the same fears with Random House, which I feel have integrity.”

Another Penguin author, David Lodge, best known for his campus trilogy, said he was fearful of a takeover by the Murdoch-owned company, although he pointed out that his publishing relationship with Penguin ends soon.

He said: “It would bother me if I was seriously connected with Penguin any longer. I don’t view it with any enthusiasm. I think the whole thing is going to reduce chances for authors placing their work if it was to go ahead.”

Other authors and agents, who declined to be named for fear of future publishing prospects, were also concerned to be associated with the Murdoch brand. One agent, who represents authors across all three publishing houses, said: “Authors have told me they are frightened by a Random House takeover, but terrified by a HarperCollins one.

“HarperCollins are far less author-friendly – they appear to be a monolithic and centralised organisation and, although Murdoch may not be pulling the strings, his mindset is certainly instilled in the company. Penguin is probably the only publisher that still has a gold-plated brand identity. Across the world they are known for paperback publishing and have an excellent reputation.

“Murdoch could come in and make assurances that he won’t interfere, but he said that when he bought the Times newspaper and you only need to look at what happened with Chris Patten’s book on China.”

In 1998 HarperCollins dropped Lord Patten’s East and West under Murdoch’s orders over fears it would be critical of China, where News Corp was hoping to expand. The company was forced to apologise and agree an out-of-court settlement.

Another Penguin author said: “This is all to do with Amazon and the big publishers hoping to challenge the website’s dominant position. But if Penguin ends up with HarperCollins that would be a terrifying prospect. It could well lead to Murdoch making an approach for the [Pearson-owned] FT.”

It is thought discussions with Random House are more likely to succeed and could lead to Penguin’s chairman and chief executive, John Makinson, being given a senior role within the new company.

The deal would provide Pearson with a clean break from book publishing as the company looks to focus its attentions on its education business, which makes up four-fifths of its turnover. Any deal with HarperCollins would boost News Corp’s publishing division ahead of a split in the company between broadcast and print.

Pearson, HarperCollins and Random House all declined to comment.

News Corp strengthens compliance teams

Senior new appointments in wake of phone-hacking crisis include hiring of former SEC executive and federal prosecutor

News Corporation has hired a senior executive from the Securities and Exchange Commission and a former federal prosecutor to lead new compliance teams at its newspaper and book publishing, TV and film divisions.

News Corp’s general counsel and chief compliance officer, Gerson Zweifach, has created the framework in response to the News of the World phone-hacking scandal which has tarnished the media conglomerate and cost it in excess of $224m to date.

Five appointments will be made to beef up News Corp’s compliance procedures, with a full announcement on the new framework expected later on Monday.

The new appointments include John McCoy, the associate regional director of the SEC’s operation in Los Angeles; and Brian Michael, a former federal prosecutor for the US attorney’s office in New York.

News Corp has decided to move to a more centralised compliance structure, with the five new appointments reporting to Zweifach and responsible for activities in different geographical areas.

The new strategy aims to avoid any repeat of the phone-hacking scandal, which was initially handled by News Corp’s UK management, including James Murdoch and Rebekah Brooks.

“News International has recognised past failings, gone out of our way to identify what went wrong and have put a range of measures in place to ensure those mistakes are never repeated,” said a News Corp spokesman. “We aim to be one of the best governed media companies in the world.”

News International recently appointed a new general counsel in Paul Chinnery, the former company secretary and director of legal affairs at Channel 5, and Imogen Haddon, as chief compliance officer.

Zweifach added the responsibilities of chief compliance officer to his role as general counsel in February, about a month after joining News Corp.

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James Murdoch ‘set for top Fox Networks job’

Rupert Murdoch’s second son is being lined up to run News Corp’s Fox TV businesses in the US, according to a report

James Murdoch is reportedly being lined up to run News Corporation’s Fox TV business in the US despite being sharply criticised by British broadcasting regulator Ofcom on Thursday.

The role being discussed would put him in charge of the Fox Networks Group, which includes the Fox terrestrial TV network as well as cable channels such as FX and National Geographic, says a report in the Financial Times.

Murdoch had hoped the promotion, which would return him to pole position to take over from his father and to run the TV business when News Corp demerges it from its newspapers next year, would have been announced in July.

Sources told the FT that the new role had been formalised but Rupert Murdoch resisted the announcement.

Another source cited said that News Corp could not countenance announcing the expanded role in July until there was a better idea about what would happen in London, where potentially damaging Ofcom and Leveson inquiry reports were still on the horizon.

On Thursday, Ofcom declared BSkyB “fit and proper” to own broadcast licences, but the regulator was highly critical of James Murdoch’s handling of the phone-hacking scandal.

It found that Murdoch’s conduct in relation to News Group Newspapers “repeatedly fell short of the conduct to be expected of a chief executive and chairman” and that his lack of action in relation to phone hacking was “difficult to comprehend and ill-judged”.

If Murdoch ascends to the new role, there would be a new reporting structure at News Corp with Peter Rice, the Los Angeles-based head of News Corp’s lucrative Fox Networks, reporting directly to him.

Rice was promoted to this role in July and Murdoch had hoped his father would rubber stamp the deal then.

The move gave Rice control of all programming of the Fox Networks Group, including Fox Sports, Fox International and National Geographic channels. However, Fox News, run by Roger Ailes, remains a separate business.

In London, the phone-hacking scandal and its fallout will continue to cast a shadow over News International for some time. Lord Justice Leveson’s final report on the future of press regulation is still to come, there are several hundred more civil damages cases to settle next year, and the Metropolitan police investigations into alleged criminality at the publisher and any resulting prosecutions could continue for up to three more years.

Tensions are running high at Murdoch’s favourite paper, the Sun, over the mounting number of arrests of journalists. On Thursday afternoon, the chief executive of News International, Tom Mockridge, called an unexpected staff meeting to try to boost morale.

The meeting was called after the third Sun journalist in two days was arrested in relation to Operation Elveden, the Met police inquiry into alleged payments to police and other officials for stories, and to Operation Tuleta, the police investigation into alleged computer hacking which was recently widened to include alleged criminal breaches of privacy.

In all, 21 journalists at the Sun have now been arrested.

According to one staff member who was at the meeting, Mockridge is very uneasy about the continuing role of the management and standards committee, the internal inquiry unit that set up by News Corp to clear Wapping of all alleged criminal practices.

Mockridge told Sun staff that he had “no date” for when the arrests would end and said the company continued to co-operate with the Metropolitan police, as agreed by parent company News Corp.

He said it was up to News Corp, not News International, to decide when to end co-operation with the police.

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Sky ruled fit for broadcast licence, but James Murdoch comes in for criticism

Ofcom rules that BSkyB can retain its broadcasting licences, but criticises former chairman James Murdoch’s handling of the phone-hacking scandal

BSkyB remains a fit and proper owner of broadcast licences, media regulator Ofcom has concluded.

But the regulator is highly critical of the company’s former chairman, James Murdoch, over his handling of the phone-hacking scandal.

The judgment comes as News Corp is reportedly considering handing oversight of Fox Networks to James Murdoch. According to The Financial Times, Murdoch could soon be in charge of the media firm’s flagship Fox network, one of its most lucrative assets, and cable channels such as FX and National Geographic. Fox Networks does not include News Corp’s Fox News Channel.

Ofcom criticised Murdoch, the News Corporation deputy chief operating officer and former Sky and News International chairman, for his “lack of action” over the News of the World phone-hacking affair.

The regulator found that Murdoch’s conduct in relation to News Group Newspapers “repeatedly fell short of the conduct to be expected of as a chief executive and chairman” and that his lack of action in relation to phone hacking was “difficult to comprehend and ill-judged”.

NGN was the News International subsidiary that published the News of the World, which was closed in July 2011 after the most damaging phone-hacking revelations emerged.

Ofcom, which launched its “fit and proper” review of BSkyB’s broadcast licences on 6 July 2011, the day before News International announced it was closing the News of the World, concluded that there was no evidence to suggest that the pay-TV company was involved in phone hacking.

The ruling found: “There is no evidence that Sky was directly or indirectly involved in any of the wrongdoing either admitted or alleged to have taken place at [the News of the World] or the Sun.

“In the circumstances, and notwithstanding our views in relation to James Murdoch’s conduct, we do not consider, having taken into account all the relevant factors, that on the evidence available to date Sky is no longer fit and proper to hold broadcast licences.

“Whilst we consider that James Murdoch’s conduct in various instances fell short of the standard to be expected of the chief executive officer and chairman, we do not find that James Murdoch’s retention as a non-executive director of Sky means that Sky is not fit and proper to hold broadcast licences.

“We recognise that whether it is appropriate for James Murdoch to be a director in light of the events is a matter for the board and shareholders of Sky.”

Sky welcomed the long-awaited ruling as its share price rose slightly in early trading on Thursday, up 5p – nearly 1% – to 733p at 9am.

News Corp said it was pleased with Ofcom’s ruling regarding Sky, but disagreed with the regulator’s conclusions about Murdoch, saying they were “not at all substantiated by evidence”.

BSkyB said in a statement: “Ofcom is right to conclude that Sky is a fit and proper broadcaster. As a company, we are committed to high standards of governance and we take our regulatory obligations extremely seriously. As Ofcom acknowledges, our track record of compliance in broadcasting is good.”

“We are proud of our contribution as a broadcaster, the investments we make to increase choice for UK audiences and the wider benefits we create for the economy.”

News Corp said: “We are pleased that Ofcom recognises BSkyB as a fit and proper holder of a broadcast licence and remain proud of both News Corporation’s and James Murdoch’s distinguished record in facilitating the transformation of Sky into Britain’s leading pay television and home communications provider.

“We disagree, however, with certain of the report’s statements about James Murdoch’s prior actions as an executive and director, which are not at all substantiated by evidence. As Ofcom itself acknowledged, James deserves credit for his role as chief executive, then chairman and now non-executive director, in leading Sky to an outstanding record as a broadcaster, including its excellent compliance record.”

The Ofcom review was aimed at establishing whether the pay-TV broadcaster remained eligible to broadcast in the UK, given that News International owner News Corp is its largest shareholder, with a 39.1% stake.

At the point Ofcom launched its review, on 6 July 2011, News Corp was still bidding to take full control of Sky. It abandoned the bid the following week in the face of mounting public and political outrage over News of the World phone hacking.

After reviewing evidence subsequently submitted to the Commons culture, media and sport select committee and the Leveson inquiry, Ofcom concluded that Murdoch had no knowledge of an alleged News International cover-up of what has been branded the “industrial scale” of phone hacking at the News of the World.

“The evidence available to date does not provide a reasonable basis to find that James Murdoch knew of widespread wrongdoing or criminality at [the News of the World] or that, by allowing litigation to be settled and by allowing NGN and News International executives to make the representations they did, he was complicit in a cover-up,” the regulator said.

However, Ofcom was critical of Murdoch’s reaction to the payout to Professional Footballers Association chief executive Gordon Taylor in 2008.

The regulator said it was clear at that point in 2008 that Murdoch was aware of the existence of new evidence that News of the World phone hacking may have gone beyond one rogue reporter – as News International was claiming at the time – in light of internal documents in relation to the Taylor settlement. But he did not follow up by asking to see the opinion of the senior counsel hired by the company or finding out for himself what the evidence on which the settlement was based was.

“James Murdoch’s exercise of responsibility was less than we would expect to see exhibited by a competent chief executive officer,” the regulator concluded of this episode.

Ofcom also criticised Murdoch for not taking seriously a Guardian article in July 2009 headlined “Murdoch papers paid £1m to gag phone hacking victims”, which first revealed the Taylor settlement and that the practice went beyond a single rogue reporter at the News of the World.

The regulator noted from Murdoch’s own evidence to the culture select committee that he entrusted the handling of the response to the Guardian article to News International subordinates, rather than launch an investigation into whether phone hacking involved the three individuals referred to in internal communications. This information subsequently emerged during a culture select committee inquiry.

“We consider that James Murdoch’s failure to apprise himself of this information, given the information which he accepts he knew, fell short of the exercise of responsibility to be expected of the chief executive officer and the chairman,” Ofcom said.

Murdoch was also criticised for failing to respond meaningfully to a highly critical report by the culture select committee on phone hacking in 2010.

“We consider this lack of action by the chairman of News International in response to a widely publicised highly critical select committee report to be both difficult to comprehend and ill-judged,” Ofcom said.

It also expresses bafflement over Murdoch’s inaction when the phone-hacking scandal began to escalate with the publication of fresh evidence in the New York Times in September 2010 and with the launch of legal action by Sienna Miller, which became public in December 2010.

Ofcom noted that Murdoch gave evidence to the Leveson inquiry earlier this year that he immediately moved to get his house in order with three specific courses of action: an internal investigation; action against any employees involved in wrongdoing; and seeking fresh legal advice to get to the bottom of what was really going on.

“Having reviewed the relevant evidence relating to this period as a whole, we note that only one of these steps was taken in 2010,” Ofcom concluded.

“In light of the events which occurred in 2009 and 2010, in particular the publication of the [culture select committee] report, the growing civil litigation and the New York Times article, we find it difficult to comprehend James Murdoch’s lack of action, given his responsibility as chairman.”

His father Rupert Murdoch, News Corp’s chairman and chief executive, escapes censure by Ofcom. The regulator said it did not find the evidence provided a basis to conclude Rupert Murdoch had acted in a way that was inappropriate in relation to phone hacking, concealment or corruption by employees.

Ofcom also found that BSkyB was not involved. “To date there is no evidence that Sky was directly or indirectly involved in any of the wrongdoing either admitted or alleged to have taken place at the News of the World.”

News Corp said: “We are also pleased that Ofcom determined that the evidence related to phone hacking, concealment and corruption does not provide any basis to conclude that News Corporation and Rupert Murdoch acted in a way that was inappropriate, and that there is similarly no evidence that James Murdoch deliberately engaged in any wrongdoing.”

If the regulator had decided that either James Murdoch – who stood down as chairman of News International in March 2012 and as chairman of BSkyB in April, but remains on the board of the broadcaster as a non-executive director – or the company itself were not fit and proper owners, the regulator could have revoked its licences.

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Rupert Murdoch’s memo to News Corp staff – full text

Mogul’s message outlining review of compliance with bribery laws in several of its publishing arms, including News International

Dear colleagues,

As you are all aware, our company has been under intense scrutiny in the United Kingdom. I assured parliament and the Leveson inquiry that we would move quickly and aggressively to redress wrongdoing, co-operate with law enforcement officials and strengthen our compliance and ethics programme company-wide. With the support of our board of directors, I am pleased to tell you that we have made progress on each of these important steps.

Gerson Zweifach, senior executive vice-president and group general counsel, News Corporation, is now our chief compliance officer and has assumed overall responsibility for our effort to create a more robust global compliance and ethics programme. Lisa Fleischman, vice-president and associate general counsel, News Corporation, is our deputy chief compliance officer and will exercise day-to-day operational responsibility for the global compliance and ethics programme. In these capacities, Gerson and Lisa will report regularly to the board of directors and the audit committee regarding the content and operation of the compliance and ethics programme.

For purposes of the compliance and ethics programme, all of our business units will be organised into five compliance groups: the LA Cable and Broadcast Group; the LA Film and TV Production Group; the Europe and Asia Group; the Australia Group; and the New York News and Information Group. Each group will be headed by a group chief compliance officer who will report directly to Gerson and will focus full-time on compliance issues.

We have already strengthened and expanded our anti-bribery training programmes. To ensure the effectiveness of our entire compliance and ethics programme, we have recently initiated a review of anti-corruption controls in selected locations around the globe. The purpose of this review is to test our current internal controls and identify ways in which we can enhance them. Let me emphasise that the review is not based on any suspicion of wrongdoing by any particular business unit or its personnel. Rather, it is a forward-looking review based on our commitment to improve anti-corruption controls throughout the company.

We recognise that strengthening our compliance programmes will take time and resources, but the costs of non-compliance – in terms of reputational harm, investigations, lawsuits, and distraction from our mission to deliver on our promise to consumers – are far more serious.

As one of the world’s most innovative media companies, News Corporation serves a vital role in the global marketplace of ideas. Every day, hundreds of millions of people rely on us to provide high-quality news, sports programming, and entertainment. To continue to be worthy of the trust of our audiences around the world, we all have an affirmative obligation to adhere to the highest standards of ethical behaviour, consistent with our standards of business conduct. The enhancements to the compliance function that are already underway and that we are planning will help us to maintain those standards.

Please join with me in this important effort and give it your full co-operation and support.

Rupert Murdoch

The Church of England’s stand on Murdoch makes the world a little better | Andrew Brown

The C of E’s pension fund does not easily mix with its principles. But disinvesting in News Corp sends an ethical signal

So a moment of silent pity, if you can manage it, for the Church of England, which has inherited this enormous pension fund and must somehow work out how to make use of it without getting its hands too dirty. Incidentally, the Church Commissioners are almost entirely a pension fund, and they pay only 15% of the church’s running costs. The rest is raised from congregations every year.

The decision to disinvest in News Corp can only be meant as a signal.

By selling nearly £2m worth of shares, it will have caused no hardship to a $57bn corporation. But it has put down a marker that it regards the whole phone-hacking scandal as something that no reputable company should have got involved in. It says that for a year now it has been trying to persuade News Corp to change its corporate governance – for which, read “stop being entirely controlled by the Murdoch family”.

When I asked what exactly was wrong about the corporate governance of News Corp, the press officer did not reply: “Rupert Murdoch.” Instead, he said that it was wrong for the chairman and chief executive to be the same person.

It’s hard to believe this is really the reason. The church does have clear rules about ethical investments, and sticks to them at some cost. It won’t invest in alcohol, tobacco, pornography, arms traders or payday lenders. Although it puts money in hedge funds (£60m as opposed to the £1.9m in News Corp) these are vetted to ensure they don’t trade in socially destructive ways. The commissioners list among unacceptable practices, “short-selling, trading in basic commodities such as food and oil, trading around mergers and acquisitions, and trading in the assets of companies in financial distress”.

A note in this year’s accounts suggests that these ethical decisions knocked about 2% off the value of its portfolio last year, which must have been quite painful when the fund’s return was only 2.9%.

Yet the fund still ends up invested in a number of morally dubious companies, among them Vodafone (tax avoidance), Royal Dutch Shell and BP (oil), Google (which certainly profits from selling advertising against pornography, payday loans and other forbidden nasties), and big pharma like GlaxoSmithKline.

As a customer of all those firms myself (or, in Google’s case, as part of its product) I am not in any position to make moral noises. But is News Corp really that much worse than the companies in which the church is still invested? Is it even the worst media company? There is suspicion of widespread phone hacking among the tabloids, and of bribery of policemen and prison officers for stories. The Mail is more brutal in its attacks than any Murdoch paper; the Express group is run by a pornographer. You couldn’t say that the Times had more of a political agenda, or fewer scruples about it, than the Telegraph, or even the Guardian.

It looks to me as if the Church Commissioners were acting as part of the Church of England here. They are run by Andreas Whittam Smith, who founded the Independent, and who has always taken moral questions seriously. In the particular context of British politics, News Corp did for years exert a malign influence that no other media group quite managed. All media power tends to corrupt. News Corp had more of it than most: too much, as we now can see.

The church is part of a fallen, morally equivocal world. It can’t administer its pension scheme without muddying its principles. But it can act to make the world a little better at the edges and this is what it has now done by saying very publicly that News Corp does not meet its ethical standards.

Murdoch resignations don’t herald a Wapping sell-off… not yet anyway

Rupert Murdoch’s resignation from his News International (NI) directorships was bound to fuel speculation about his intentions.

As the Reuters report puts it: the news is “likely to reignite speculation” that Murdoch’s main US company, News Corporation, is preparing to sell off The Times, Sunday Times and The Sun in the wake of the phone hacking scandal.

The revelation of the resignations also prompted the New York Times to note that “there has been mounting speculation among corporate analysts that he would seek to sell the newspapers once dozens of impending lawsuits stemming from the phone-hacking have been concluded.”

So let’s start with the official version (via Tom Mockridge, NI’s chief executive): it’s “corporate housecleaning”. By quitting the boards of the NI Group and Times Newspapers Holdings Murdoch is preparing for “the upcoming restructure” of News Corporation into two companies. He remains “fully committed” to the UK papers.

One point in that version’s favour: Murdoch has also resigned from more than a dozen other News Corp boards in the US, India and Australia. So it’s not a UK-only matter.

Unofficial versions: he is symbolically distancing himself from his Fleet Street empire (Financial Times); it’s part of the “slow fade” of Rupert and his son, James, from the UK and will be “complete and permanent” (analyst Claire Enders, quoted in the Sunday Telegraph and in The Observer and in the Mail on Sunday). He is deserting his loyal staff who “will smell betrayal in their nostrils this weekend” (Labour MP Tom Watson quoted in the Independent on Sunday).

It is “no surprise” because the phone-hacking scandal has created “a nightmare”. Nevertheless, it “is plainly significant” (media commentator Steve Hewlett, quoted by Robert Peston on the BBC site).

For good measure, Peston (quoting “our correspondent”) adds: “I am not sure that his departure from these boards tell us anything much about how long he will remain chairman of their parent and therefore associated with them.”

I tend to agree with Peston on that. While I remain convinced that News Corp will, one day, jettison its Wapping-based titles, I don’t think that’s about to happen soon.

Directors seek to mollify upset shareholders

Of much more significance is the potential rebellion by investors against Murdoch’s leadership of News Corp. The 81-year-old mogul is facing pressure to resign as chairman at the company’s annual general meeting in October.

Last week it was revealed that 18 major shareholders have signed a letter calling for Murdoch to step down. And The Independent reported that the situation was worrying enough to prompt two non-executive directors – Rod Eddington and Andrew Knight – to hold discussions in order to mollify one of the most powerful of those shareholders, the Local Authority Pension Fund Forum (LAPFF).

The letter was also signed by other mainstream British investors, such as Aviva and Legal & General.

In addition, a trio of investors are pursuing a legal action against Murdoch in the United States for his allegedly “lax oversight” of the company.

In the unlikely event that the shareholder rebellion succeeds, it could well lead to the disposal of News International. Otherwise, I can’t see that the resignations are really that significant.

Sources: Reuters/Sunday Telegraph/The Observer/Independent on Sunday/Sunday Times/Financial Times/New York Times

News Corp board reported to have approved company split

Murdoch expected to announce one company will hold his entertainment businesses, and the other his publishing assets

Rupert Murdoch is expected to announce plans to split his troubled empire in two on Thursday, severing his US media assets from the newspaper division tarnished by the phone hacking scandal.

Murdoch met with key executives on Wednesday at News Corp’s headquarters in New York to outline plans for the biggest corporate shakeup in his company’s history. According to the News Corp owned Wall Street Journal the evening meeting lasted roughly an hour and a half.

Murdoch told executives one company would house News Corp’s entertainment businesses including 20th Century Fox and the Fox broadcast network while another would hold publishing assets including Dow Jones, publisher of The Wall Street Journal, News International, publisher of and the Times and Sun in the UK, HarperCollins book publishing and News Corp’s recently established education business.

The move is volte face for Murdoch who has consistently fought off calls to split his troubled newspaper assets from his more fast growing media assets. The news has cheered investors and News Corp shares have leapt 11% since Tuesday when the media company first confirmed it was contemplating a split.

The move is unlike to end News Corp’s legal woes, according to legal experts. US authorities are now investigating the company and executives including Murdoch and his son James, former boss of the News International newspaper division, under the foreign corrupt practices act (FCPA).

The FCPA is a powerful US law used to investigate allegations of bribery by US executives involving foreign officials and News Corp stand accused of bribing policemen and other officials to obtain stories for its now closed News of the World tabloid and other papers.

The new largely US-based News Corp would be formed from businesses that accounted for $23.5bn (£15.1bn) in revenue in the year ended in June 2011. The publishing arm that would the UK papers, the WSJ and the New York Post, The Australian and the book publisher, as well as HarperCollins generated $8.8bn (£5.6bn) in the same period.

News Corp called in its newspaper editors from around the world on Wednesday to reassure them that the new company remained committed to publishing.

Murdoch’s career started in newspapers and as the company’s largest shareholder he has, until now, stood firm against calls to split his media empire. The media baron is expected to explain his change of heart tomorrow and will be interiewed on News Corp’s Fox Business channel.