The Murdoch Files: a collection of Murdoch related stories collected from our subscriber only emails this week.
Subscriber email – 15 October
There has always been a bit of a cloud over Rupert Murdoch’s ethics and the world’s most powerful man has once again demonstrated how slippery he can be as we count down to the October 26 shareholder meetings in Adelaide to approve the move to Delaware and a massively over-priced $3 billion related party transaction involving Queensland Press.
After supposedly coming to a peace deal with a global consortium of concerned institutions and proxy advisers, Rupert’s lawyers dropped in to the Federal Court last Friday and lodged the amendments to the proposal.
However, buried in the fine print were some very interesting termination clauses and one that looks like an attempt to effectively void the deal from the outset. The court documents show that all of the amendments don’t apply if any single shareholder, whether legal or beneficial, moves beyond 15 per cent of News Corp’s shares.
By including custodial holdings in the 15% carve out, the agreement may be terminated upon inception or very soon thereafter. Citicorp Nominees are already over the 15% threshold and other big American custody outfits will probably quickly approach this limit once the American funds start buying in.
News Corp apparently acknowledges that this is not within the spirit of the agreement, but have steadfastly refused to amend the deed presented to the Federal court. They’ve tried to appease institutional concerns with a side letter, which has no legal effect.
This flaw was first picked up by the media shy Proxy Australia group which, unlike any other media or institutional players, actually went to the Federal Court and read the documents in detail before releasing their advice to a select group of institutional investors earlier in the week.
The situation became public overnight when the impeccably connected Boston-based Global Proxy Watch newsletter reported on the find its latest edition as follows:
Not so fast News Corp. The move from Australia to the US is not yet in the bag. Despite an historic climb down last week, Rupert Murdoch faces more hurdles in his struggle to gain the 75% super majority needed to green light the epic relocation. First, advisors Institutional Shareholder Services in Maryland and Corporate Governance International in Sydney pointed investors to flaws in the deal. The two recommend yes votes, but clients may be swayed by the criticism.
Then Proxy Australia, the Melbourne-based advisor, unearthed a loophole that threatened to void the compromise struck last week between News and investors. News lawyers had inserted small print killing a key shareowner protection if a non-Murdoch investor acquired 15% or more of equity. Turns out, Citicorp Nominees already holds more than that on behalf of clients.”
So was the pact a mirage? News yesterday sent a side letter to the Australian Council of Superannuation Investors *clarifying that fiduciary holdings don’t count. But that doesn’t bind Murdoch. Watch this space.
Many of the custodian cut-offs in the US are on Sunday, so Rupert might’ve pulled off his trick unless the Australians get their act together and insist that the formal agreement is varied and re-presented to the Federal Court.
Don’t expect to read any of this in the Murdoch press tomorrow. We’re still waiting for Terry “His Master’s Voice” McCrann to offer one sentence of commentary on Rupert’s embarrassing backdown last week after he so vociferously attacked those calling for the very changes which his boss then purported to agree to.
Lachie lunches with the troops
Subscriber email – 15 October
There’s a slow-building swell of excited anticipation around the country. Only seven sleeps till he arrives upon our shores once again. Perhaps the last manifestation for a very long time.
The Sun King’s Royal Presence is nearly upon us.
All rise and chant Glory to Murdoch on High, and hullo Lachie. Nice lunch in the glitzy Eastern suburbs of Sydney yesterday, son of the Sun King.
Tre Scalini, a faded but still popular Italian troughing zone for News Ltd expense accounts.
Lachie was lunching the Sydney troops about life and other matters. Perhaps some rubbery circulation figures for the September six months were mentioned in passing.
The re-election of the Howard Government a distraction from the more important issues at hand. Bonuses, spraying Fairfax (who had very poor circulation figures) and making sure everyone is on song and booked to attend the News Corp meetings in Adelaide on October 26 when the shift of domicile issue will be voted on.
The Sydney Morning Herald’sSpike column recorded the lunch which was much gossiped upon in Sydney media circles late yesterday. But the on-line edition omitted the nice photo from the print edition of Lachie shaking hands with the Godfather of Australian political journalism, Paul Kelly. The hairstyles told it all. Lachie with a number one buzz cut and the grey, distinguished head of hair still owned by Kelly.
Impressive. Chris Mitchell was there, so too his deputy Michael Stutchbury. Not to mention John Hartigan, News Ltd’s local boss, when Lachie isn’t here. It was only last week that Harto was out and about at The Bulletin magazine’s Smart 100 awards where the other heir, JP, spoke with some wonderment when he rhetorically asked if Rupert Murdoch was our most innovative businessman? (Sorry, dad!)
Subscriber email – 13 October
It has been revealed that former BSkyB chief executive Tony Ball received a whopping $32 million (13.1m pounds) in pay, bonuses and benefits during his final year at the company.
The satellite broadcaster’s annual report also revealed that young James Murdoch picked up $3.6 million (1.47m pounds) for eight months work – including a 850,000 pound bonus, despite the fact the share price has plunged more than 25 per cent since Rupert gave him the top job in November last year.
In addition to his 10.7m pound golden goodbye, Ball also picked up 1.25m pounds under the company’s performance-related bonus scheme for senior managers, plus another ¡288,000 under another scheme. He also picked up his 717,676 pound salary, taking the overall amount that he earned in his four years as chief executive to around ¡33m.
Interestingly, the non-compete clause that Ball signed at the time of his departure prevents him participating in the next round of negotiations for Premier League soccer TV rights, whether for the league itself or any rival bidders.
The Guardian has more details here.
Rupert’s grand plans
Subscriber email – 13 October
Meanwhile, Rupert is pushing ahead with the restructure of his UK printing operations, with over two thirds of printing staff to be axed in a move from Wapping to three new state-of-the-art facilities in North London, Liverpool and Glasgow announced overnight.
This is how The Sunis reporting the move today:
“An exciting 600 million pound project to make The Sun even bigger and better, with colour on every page, was announced yesterday.
“Our parent company News Corporation is investing in state-of-the-art printing presses which will revolutionise Britain’s best-selling daily paper.
“Because they run twice as fast as our existing presses, our deadlines will be much later. That means readers throughout the country will get improved news, pictures and sport.”
The Guardianis more circumspect but still writes: The plans “signal another major shift in the history of newspapers with just 300 staff pumping out millions of copies of the Sun and Times every weekday and around five million copies of The Sunday Times and the News of the World every Sunday.”
And Rupert should collect a tidy profit on the Wapping site when the move is complete. It is believed the site was bought for about ¡1m eighteen years ago but is now worth around 200m pounds.
Subscriber email – 13 October
Conservatives across the country, particularly those in politics, must be breathing a sigh of relief that they have Terry McCrann and Andrew Bolt to stand up for them.
In today’s Herald Sun, both McCrann and Bolt once again set their sights on “lefty” journalists for attacking good god-fearing people like Tony Abbott and Family First chairman Peter Harris in the media.
Journalists who were singled out by McCrann included, Tony Jones, Ross Gittens and the entire Press Gallery.
McCrann described Jones as a “complete simpleton”, while Gallery journalists weren’t clever enough to walk and talk and chew gum, unlike the genius McCrann, who still has not ventured into News Corp territory after Rupert’s humiliating corporate governance backdown last week.
Read McCrann here – Lateline must apologise for ‘getting’ religion
Meanwhile, Bolt unloaded with another predictable spray at the Greens and media outlets such as The Age, which he claims is Australia’s most left wing newspaper.
Ummm, didn’t The Age editorialise for John Howard. Therefore, The Canberra Time must surely assume the “most left” title. However, the blinkered ravings of the Herald Sun triumvirate of Bolt, McCrann and editor-in-chief Peter Blunden arguably makes the Herald Sun the most right wing paper in the country, although The Australian is giving it a good run for its money.
While the Greens fell short of what they wanted, they were up on their 2001 Federal result and a 7.5 per cent national vote was hardly “a terrible result and perhaps the beginning of the end for this mad party”, as Bolt wrote today.
He then deliberately distorts the figures by comparing the 45,500 Family First primary votes with the 42,500 votes that Bob Brown got in 2001. This, of course, ignores the size of Tasmania and the fact that Bob Brown was well into double figures percentage wise whereas Family First was wallowing at 1.9 per cent. Quite dishonest spin from someone who professes to put the truth above everything else.
When Bolt Green-bashes, he really should disclose at the bottom of his column that he is a dead tree journalist who earns close to $200,000 a year, primarily working for the man responsible for the consumption of more trees than anyone else in history.
Col Allan lets it all hang out
Subscriber email – 12 October
Rupert Murdoch would have enjoyed this Col Allan editorialin The New York Post yesterday.
Australian Prime Minister John Howard came out on top in his quest for a fourth term yesterday in an election with profound implications for one of America’s strongest — and longest — strategic alliances. And, of course, for the war on terror.
Howard’s victory in Australia’s federal election all but guarantees that Canberra will keep its troops in Iraq. Indeed, the presence of Australian soldiers in the Coalition of the Willing had been a major issue in a bitterly fought campaign.
The fact that Howard appeared actually to have increased his government’s majority in Parliament despite predictions of a very tight outcome was described yesterday as surprising, though it shouldn’t have been.
Australia has itself been targeted by Islamic fundamentalist terror bombers — and thus most Australians understand what is at stake at least as well as most Americans. That is, it is no more in Australia’s interest that the war be lost than it is in America’s.
Yes, there is a vociferous anti-American left in Australian politics. But then, there is a vociferous anti-American left in American politics, too. Good sense, fortitude and a respect for the mandates of history came to the fore Down Under yesterday.
We trust that the same will hold true for America on November 2.
And if that wasn’t enough, try this New York Postopinion piece which is straight out of Rupert’s central thought generating division.