Media
5:41 pm
Fri October 21, 2011

Murdoch Confronts Critics At News Corp. Meeting

On Friday, News Corp. held its first shareholder meeting since a phone-hacking scandal in the U.K. led the company to close a major tabloid. Outside the meeting at Fox Studios in Los Angeles, about 100 demonstrators assembled to condemn the Murdochs and News Corp.'s leadership.

But the complaints that followed inside were far more specific. There was a vote to approve the board of directors, but it was largely a formality because the Murdoch family and its allies control so many voting shares.

Rupert Murdoch wasted little time in reminding investors of his track record.

"The story of our company is the stuff of legend — from a small newspaper in Adelaide [Australia], to a global corporation based in New York, with a market capitalization of about $44 billion," he said.

Murdoch sounded contrite about the phone-hacking scandal, but he pushed back — pre-emptively — against his critics.

"The company has been the subject of both understandable scrutiny and unfair attack," he said.

Notably, however, Murdoch did not mention credible allegations that a News Corp. tabloid bribed police, that its executives may have perjured themselves in a Scottish trial or that British lawmakers are investigating whether executives lied to Parliament. Among those executives is James Murdoch, Rupert's son.

Leading the investigative charge in the U.K. is Labor MP Tom Watson. He held proxy shares on behalf of some union-related investors and traveled to Los Angeles for the meeting.

"I've genuinely been shocked about the scale of criminal wrongdoing and how executives covered it up and how, frankly, Rupert Murdoch, as head of the company, took a blase approach — almost took a blind eye to wrongdoing. And I don't think that's right," he said in an interview Thursday.

"I think I've got a duty to bring that to the shareholders' attention, because, after all, they are also responsible for what this company does," he said. "And I think this board has let them down."

At Friday's meeting, Watson told Murdoch and shareholders that there will be a second front: that journalists for a British News Corp. tabloid were involved in hacking into emails, too.

Murdoch didn't have much patience for that, slapping the table repeatedly.

Other executives played defense. Corporate director Viet Dinh called the scandal limited to one small corner of the company. Dinh, who is overseeing the internal investigation, is a former assistant U.S. attorney general, as well as the godfather of one of Murdoch's grandchildren.

Many shareholders — led by labor and religious institutional investors — challenged how much top executives were paid and Murdoch's decisions to acquire MySpace, The Wall Street Journal and his daughter Elisabeth's production company. The overall argument struck at the integrity of the corporation and the coziness between the Murdochs and its board.

News Corp.'s British arm confirmed Friday it would pay nearly $5 million to settle claims from parents of a murdered girl whose cellphone messages were hacked and deleted. The company also announced it would be laying off 200 employees at The Times of London and its sister paper, The Sunday Times.

Company officials were already looking ahead to Monday, when the former publisher of The Wall Street Journal will be questioned anew before Parliament. He felt compelled to resign after his testimony about hacking during his time as CEO of News Corp.'s British newspaper arm proved to be untrue.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, host: From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host: And I'm Melissa Block. Today at Fox Studios in Los Angeles, Rupert Murdoch confronted some of his sharpest critics. It was the annual shareholder meeting for Murdoch's News Corp., and it was a testy one. The company owns cable channels, newspapers, movie studios and other ventures on four continents. And the meeting comes in the wake of the phone hacking scandal that led News Corp. to close a major British tabloid. As NPR's David Folkenflik reports, many investors took the opportunity to protest.

DAVID FOLKENFLIK: Outside the gates of Fox Studios, about 100 demonstrators assembled to condemn the Murdochs and News Corp.'s leadership.

(SOUNDBITE OF DEMONSTRATION)

UNIDENTIFIED GROUP: ...got to go. Hey, hey, ho, ho. Corporate greed has got to go. Hey, hey, ho, ho.

FOLKENFLIK: But the complaints that followed inside would be far more specific. Murdoch wasted little time in reminding investors of his track record.

RUPERT MURDOCH: The story of our company is the stuff of legend: from a small newspaper in Adelaide to a global corporation based in New York, with a market capitalization of about $44 billion.

FOLKENFLIK: Murdoch sounded contrite about the phone hacking scandal in the United Kingdom, but he pushed back - preemptively - against his critics.

MURDOCH: The company has been the subject of both understandable scrutiny and unfair attack.

FOLKENFLIK: Notably, however, Murdoch did not mention credible allegations that a News Corp. tabloid bribed police, that its executives may have perjured themselves in a Scottish trial or that British lawmakers are investigating whether executives lied to parliament. Among those executives is James Murdoch, Rupert's son. Leading the investigative charge in the U.K. is Labour MP Tom Watson. He held proxy shares on behalf of some union-related investors and traveled to Los Angeles for the meeting.

TOM WATSON: I've genuinely been shocked about the scale of criminal wrongdoing and how executives covered it up and how, frankly, Rupert Murdoch as head of the company took a blase approach, almost took a blind eye to wrongdoing.

FOLKENFLIK: These remarks came from an interview with me yesterday ahead of the meeting.

WATSON: I think I've got a duty to bring that to the shareholders' attention because after all they are also responsible for what this company does. And I think the board had let them down.

FOLKENFLIK: At today's meeting, Watson told Murdoch and shareholders that there will be a second front to the British scandal: hacking into email. Murdoch didn't have much patience for that. You can hear him slapping the lectern as he replied.

MURDOCH: I think I have assured everyone that I am going to put these things right. What happened a few years ago was absolutely wrong, and I've said so. And I said that we're all ashamed of it.

FOLKENFLIK: Other executives played defense. Corporate director Viet Dinh called the scandal shameful but limited to one small corner of the company. He's a former assistant U.S. attorney general, and he's also the person overseeing the internal investigation, as well as the godfather to one of Murdoch's grandchildren. Many shareholders, led by labor and religious institutional investors, challenged how much top executives are paid, as well as Murdoch's decisions to acquire MySpace, The Wall Street Journal and his daughter Elisabeth's production company. The overall argument struck at the integrity of the corporation and the coziness between the Murdochs and its board. And indeed as the meeting went on, Rupert Murdoch became testier.

STEPHEN MAYNE: And I've heard the 15...

MURDOCH: Stephen, I'd hate to call you a liar, but I don't believe you.

UNIDENTIFIED MAN #1: Chairman, the Church Commissioners for England have elected to be represented in person at this meeting.

MURDOCH: Because your investment haven't been that great, but go ahead.

UNIDENTIFIED MAN #2: We can do both.

MURDOCH: Are you on the subject?

UNIDENTIFIED MAN #2: Some of his questions...

UNIDENTIFIED MAN #3: Later on.

MURDOCH: No, not later on, now.

FOLKENFLIK: News Corp.'s British arm confirmed today it would pay nearly $5 million to settle claims from parents of a murdered girl whose cell phone messages were hacked and deleted. And company officials were already looking ahead to Monday, when the former publisher of The Wall Street Journal will be questioned anew before parliament. He felt compelled to resign after early testimony proved untrue. David Folkenflik, NPR News. Transcript provided by NPR, Copyright National Public Radio.

Related Program