News Corp. shareholders OK pill
3-year anti-takeover extension gets narrow approvalShareholders of entertainment giant News Corp. have narrowly approved what is in effect a three-year extension of a much-discussed anti-takeover provision, or "poison pill," with John Malone's Liberty Media voting against the measure.
Chairman and CEO Rupert Murdoch said at the annual meeting here Friday that while Liberty seems ready to soon strike a deal to swap its stake in News Corp. for assets, he feels no pressure to do so anytime soon.
He also restated his plan to lead his conglomerate for a long time to come, to "definitely" launch a much-anticipated Fox business news channel next year and to push his firm's digital assets to new heights.
"If Liberty is to be believed, we're on track for a pretty quick resolution," Murdoch told shareholders, who met here at the Asia Society.
He later told journalists that a deal could be "very close," though he added that his company is "not in a rush" and "not under any pressure" but "quite relaxed" given the extension of the poison pill.
More than 57% of votes cast by Class B common stockholders and 46% of all outstanding shares approved the extension of the poison pill, News Corp. said, with Murdoch later telling reporters that Liberty voted against the measure. It also withheld its votes for a handful of News Corp. directors that were re-elected at the meeting, including Murdoch son Lachlan, who was present, along with DirecTV president and CEO Chase Carey. Liberty couldn't be reached for comment.
Shareholders on Friday confirmed the directors that stood for re-election and voted down a shareholder proposal to end the staggered re-election of directors in favor of an annual confirmation of all board members. Murdoch said News Corp. is considering going back to such a setup over time but not right now.
Friday's pill vote extends the anti-takeover measure through October 2008, with News Corp. then having the right to extend it without a shareholder vote for another year if the Liberty situation hasn't been resolved. Most observers had expected the extension to go through, though critics have remained vocal about ending it; the voting results seemed to show some investor concerns.
According to a settlement that News Corp. reached with shareholders this year, even a vote against the pill, also known as a shareholder rights plan, would only have been nonbinding and advisory. With a majority at the annual meeting supporting the plan's extension, all litigation in this case will now be dismissed.
Sources have said that Liberty Media and News Corp. have continued to discuss a possible swap of News Corp. stock held by Liberty for a controlling stake in News Corp.-controlled satellite TV giant DirecTV Group and at least one TV station.
While some on Wall Street originally had hoped that a deal would be announced before Friday's annual meeting, sources have signaled in recent weeks that any agreement would take longer to finalize (HR 10/13).
Asked by reporters after Friday's meeting if he would discuss his company's current succession plans, Murdoch said "no" before adding: "I intend to be here many, many more years."
In his annual presentation on the state of News Corp.'s business, Murdoch touted the firm's "spectacular growth rate" over the past three years and its digital assets, saying, "News Corp. is in the midst of profound change."
However, while these are "the most stressful of times for others, they are great times for us," the media mogul said. "Technology is liberating us from old constraints."
He noted that online community MySpace has doubled its revenue every four months over the past year and boasts more than 120 million registered users. He added that the company's new-media assets are "moving quickly toward profitability."
And News Corp. president and chief operating officer Peter Chernin said MySpace is on track to reach $500 million in online advertising revenue this fiscal year.
Executives declined comment on the state of talks with Google Inc. about extending a search relationship with MySpace now that Google is acquiring online video destination YouTube. Asked how News Corp. plans to defend its copyrights vis-a-vis YouTube, Murdoch said this is "under very close study" but that the firm has not reached any decisions yet.
Murdoch and Chernin also declined to discuss in detail Fox News' carriage renewal negotiations with cable and satellite TV providers. Asked whether FNC still targets $1 per subscriber per month in carriage discussions, Chernin declined comment. Murdoch in his earlier presentation called the Cablevision deal "attractive."
Murdoch also reiterated that the Fox business news network is scheduled to launch next year, saying his team is "disappointed" that it isn't on the air yet.