Board must decide how to spend $12 bil surplus
LONDON — News Corp.’s board will meet in Los Angeles Tuesday for the first time since the U.K. phone hacking and police scandal re-ignited early July.
The conglom aims to use the meeting and its accompanying year-end results presentation “to steer attention away from the scandal,” according to the Murdoch-owned Wall Street Journal.
News Corp.’s numbers are expected to be good, said the Journal, adding that directors need to decide what to do with the company’s huge cash pile.
This coin was earmarked to pay for the 61% of U.K. paybox BSkyB it does not own.
The BSkyB bid collapsed early July after the public outcry that followed the news that British tabloid, the News of the World, owned by News Corp. subsid News Intl., had hacked a phone belonging to murdered British school girl Milly Dowler.
In March, News Corp.’s surplus was getting on for a gargantuan $12 billion.
The Journal speculated that the company’s dividend may be raised — or there could be another stock buyback on top of the $5 billion program already announced.
News Corp.’s stock price remains low — at Friday’s close, it was $14.67, down 19% from July 5, the day after the Dowler revelations were first published by U.K. paper the Guardian.
At the board meeting, News Corp.’s nine independent directors are expected to discuss the progress of a committee formed by the conglom to help investigate the hacking and accompanying police corruption allegations.
Corporation governance critics claim the committee is not genuinely independent because it reports via News Corp. executive Joel Klein to independent director Viet Dinh.
There are concerns too that the board is too easily manipulated by Rupert Murdoch, whose family possesses 40% voting control, despite owning a much smaller financial stake in News Corp.
The Journal quoted an institutional investor with a small stake, Christian Brothers Investment Services, which wants Murdoch to be divested of his chairmanship and an independent chairman to be appointed at News Corp.’s AGM in October.
Tuesday’s meeting was expected to see the appointment of Elisabeth Murdoch to the News Corp. board, but in a statement released Friday the company said the Shine topper would no longer be joining the board.
She told directors it would be “inappropriate” for her to join and “the independent directors agreed that the previously planned nomination should be delayed.”
In February, News Corp. bought Shine. At the time Rupert Murdoch said: “Shine has an outstanding creative team that has built a significant independent production company in major markets in very few years, and I look forward to them becoming an important part of our varied and large content creation activities. I expect Liz Murdoch to join the board of News Corporation on completion of this transaction.”
There have been reports, subsequently denied, that Elisabeth was unhappy about how her brother, James, and News International’s then CEO Rebekah Brooks, were handling the hacking and police corruption crisis.