News Corp will pursue alternative acquisitions to BSkyB (NYSE: BSY), buy back more shares and raise investors’ dividends – but will apparently refrain from major restructuring in the wake of its phone “hacking” scandal.
Rupert Murdoch declared himself “disappointed” by having backed out of the BSkyB bid during the furore but is “reassessing our near- and long-term priorities” for expenditure. President and COO Chase Carey said: “There are some exciting opportunities to add real value to our core businesses.”
Acquisition targets will be “those in the tens or hundreds of millions, not billions;” nothing on Sky’s scale. Carey brushed off a question on whether News Corp would return with a Sky bid when the UK climate has cleared, but said “we’re not stockpiling” for that.
‘No major restructuring’
Asked if UK or Australian newspapers might face the chop, Murdoch said: “I’m shocked and appalled at what happened in one small corner. Everything else is fine.” Across the company, he said: “I think we’ve got a very good mix. There are one or two (businesses) that we would sell, but no major restructuring.”
Whether Carey considers “major” what even Murdoch protests was “one small corner” is debatable. It was Carey who asked, rhetorically: “How do we address a business that looks very different without News Of The World in it?” And he who offered: “We would continue to concentrate on the businesses that are the core of our business.”
On that basis, however, the Publishing segment in which its newspapers and books sit is actually News Corp.’s biggest revenue generator.
News Of The World Fall-Out
“We’ve obviously had a big alarm call … In retrospect, we should have continued investigating,” Murdoch conceded, whilst repeating core themes of regret, outrage and a determination to fix things.
“I am personally determined to put right what went wrong at the News Of The World,” Murdoch said. “I have run this company for 50 years – the kind of (practises) that occurred in that newsroom have no room in News Corporation.
Financial impact
Murdoch declined to quantify amounts stockpiled for litigation settlement. “We’re not prepared to give that figure yet, nor do we know it. First, we have to get to the bottom of what happened. Were there a dozen of these people or two dozen? We are cooperating totally 100 percent with the police in their investigations. We expect that to go on for some time.
“We are all committed to doing the right thing … There has been no material impact on our operations outside of the closure of News Of The World.” Costs for that closure aren’t clear.
Beyond hacking
Carey says the growing U.S. TV business is “not even close” to realising its full potential. “Fox (NSDQ: NWS) and Fox News will take subscription fees to a whole new level in the next year, year and half. You will see us launch many new exciting digital extensions to our brands and franchises both here and abroad … our stock is woefully undervalued.”
Murdoch: “If you look at our apps – of the London Times, The Sunday Times, News Of The World, New York Post – they are as good or better than anybody else’s. The money coming from that will expand as more people have tablets. What is interesting is, we’re getting tremendous take-up not just on iPad but also on Kindle.”