Rupert Murdoch founded News Corp, he is its chairman and its chief executive and he controls it through his family’s minority shareholding - one which comes with voting rights others do not have.
In this morning’s conference call on its annual results, scarcely scratched by the phone hacking scandal, the 80-year-old stressed he is not going anywhere anytime soon, give or take the actions of a wayward bus.
But in a nod to concerns about how the company is run, he said it was not run by him alone, but by a two-person team.
The board and I believe I should continue as chairman and chief executive,” Murdoch said – in spite of ASX guidelines saying the roles should be separately held and the chairman independent. “But make no mistake, Chase Carey and I run this company as a team.”
Carey is liked by investors, and the News Corp president and chief operating officer has finally “cleaned up” the disastrous MySpace investment – bought for $US580 million, sold in June for $US35 million – which was a drag on the company’s otherwise impressive performance and $US2.7 billion net profit.
But two areas of News Corp remaining to be cleaned up are its corporate governance and the uncertain future for its newspapers everywhere.
Murdoch made it clear little is going to change on either. He is not going to alter his family’s stranglehold on the company despite it owning only 12 per cent, nor has his affection for newspapers diminished.
Given his age, succession is always present in discussion about News Corp’s future. Asked if he was confident the board would appoint James Murdoch as chief executive when the job became open, he joked: “I hope that the job won’t be open in the near future.”
“Chase is my partner,” Murdoch said – and Carey would get the job should Murdoch the elder fall under a bus. “Chase and I have full confidence in James,” he said, but in the end, it was a matter for the board.
The independence of that board – with three Murdochs and a number of current and former News executives on it – was “very often” critical, he said, and had wide ranging discussions.
Asked if the News of the World scandal and changed his “tolerance” for newspapers: “No, I’m feeling very confident. I’m shocked and appalled about what happened in one small corner,” he said, but the rest was “fine”.
Yet in the heavily anticipated call, Carey answered most of the financial questions posed by analysts, as he does most quarters, demonstrating he is the man with day-to-day control of News Corp business.
And that business is television, television, film and television. Of its full year earnings results, TV and film make up over 80 per cent of it; publishing – which includes all its newspapers in the US, Britain and Australia plus its book publishing division – just 16 per cent.
Today’s call was a reminder that even had News of the World not interrupted News Corp’s impressive year, newspapers are increasingly an anachronistic part of the company, and Murdoch’s disregard for corporate governance is a relic too.
The two combine to suggest that a phenomenally successful founder is now holding back a very profitable company.
tdick@fairfaxmedia.com.au
