Rupert Murdoch is back in London. His return to the UK, five weeks after mysteriously resigning from his UK board positions in the News International group, is at the invitation of London’s ambitious and calculating Mayor Boris Johnson. The Guardian claims that Johnson could get the backing of Murdoch and his tatty UK media outlets.
Johnson has been a supporter of Murdoch and News during the now long-running scandals. He has been slow to criticise News and its culture, and famously described the early phone hacking charges as “codswallop” — a comment he had tried to recant, but without too many people believing him.
The government of David Cameron set up the Leveson inquiry into the UK media — especially the phone hacking claims — and that has enraged the 81-year-old News Corp chairman, who feels hard done by. So he is back playing mischief in the UK political scene by sidling up to the opportunistic Johnson and pushing him forward? That’s just the thing he told the Leveson inquiry he didn’t engage in, isn’t it?
The return to the UK also came as his one-time favourite, Rebekah Brooks, answered bail at Lewisham police station overnight and will appear at Westminster Magistrates’ Court on September 3. Six other journalists from the News of the World, including David Cameron’s former spin doctor Andy Coulson, have been officially charged and will appear at the same court later this month on August 16.
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Meanwhile, in a filing with the US Securities and Exchange Commission this morning, News said it had now spent $US5.013 billion in buying back its non-voting A shares. A total of 276.68 million shares had been bought by the end of trading on August 1. A further filing will be made early tomorrow our time for any purchases made yesterday. News shares hit a 52-week high of $US23.80 overnight and ended the day up half a per cent to $US23.31.
News has moved into the second part of its now $US10 billion buyback. The first $US5 billion was part of a scheme started several years ago, but had been suspended up until last July as the company saved its cash for its planned bid for BSkyB which would have cost upwards of $US12 billion. But the phone hackings scandal at the NotW ended that plan and Murdoch restarted the buyback as News Corp shares plunged under $US14, driven lower by investors worried about the company’s role in the growing scandal and the impact of the closure of the paper. The extra $US5 billion was added earlier this year when it became clear the scandal was worse than expected and had spread to bribery allegations by journalists at The Sun.
Murdoch’s return to the UK comes ahead of the release of the company’s fourth-quarter and 2011-12 financial results next Thursday morning, Australian time. The fourth will be lower (a warning was issued about that at the third-quarter release). But what the markets want is more detail on the split announced in late June between its broadcast assets (not in Australia and NZ) and its publishing operations around the world.
Investors want details of any asset impairments to be taken in the publishing business in Australia, the US and UK, as well as funding details and management. They seem more comfortable about the broadcast side of the split with management and finances already fairly well known. Next week’s results will confirm the rationale for the split with solid revenue and earnings gains for the US cable TV and FTA networks, but not for film. The publishing businesses will see big losses and redundancy costs in newspapers, especially at News Limited in Australia where hundreds of people are being sacked, and at News International in London where an update on the full cost of the closing of the NotW and the various scandals is expected.
Perhaps the most interesting UK media story this week was in The Guardian on the directors within News Corp that could face corporate charges and prosecution for neglect of their duties, in plans that are being examined by the UK Crown Prosecution Service. Was that behind the decision by Rupert to follow son James out of the UK and off all those company boards?