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NEW YORK – A defiant News Corp. chairman and CEO Rupert Murdoch made clear on Wednesday that, with support from his company’s board, he will not give up his current dual roles – at least for now, but sent a strong signal to Wall Street that his president, COO and deputy chairman Chase Carey is a strong partner who would likely lead the conglomerate if anything unexpected happened to him.
Company observers have long asked for a clear succession plan at the top of the entertainment giant. Critics and governance advocates have also suggested that News Corp. split the chairman and CEO roles. The latter could go to Carey under that scenario.
On an earnings conference call, Murdoch said that the company’s “board and I believe that I should continue in my current role as chairman and CEO.” But he also told Wall Street observers: “make no mistake, Chase Carey and I run this company as a team.” Should anything happen to the now 80-year-old mogul, “I’m sure he would get it immediately if I went under a bus,” he added about the board’s likely decision in the case of anything unforeseen.
He added that the latest quarterly results show that this team produces good results, but he stopped short of clearing up the ever-present succession question by, for example, acknowledging that Carey could in the future take on the CEO role. Observers have predicted that Carey, who was also on the call, will sooner or later take over the CEO post and allow Murdoch to focus on the chairman role.
In comments that may please critics of the strong role of Murdoch and his family at the conglomerate less than his shoutout to Carey, Murdoch on Wednesday also expressed support for his son and deputy COO James Murdoch and the News Corp. board, which critics have argued includes too many people who aren’t truly independent as they are friends of the Murdochs or used to work at the company.
Asked about his son – and, some say, heir apparent – James, whose testimony in front of a parliamentary committee on the phone hacking probe has come under scrutiny, Murdoch said: “Chase and I have full confidence in James.” Asked if the son will one day in the near future become CEO, he quipped: “I hope that the job won’t be open in the near future.” On a more serious note, Murdoch added that “in the end, this decision is a matter for the board.”
Asked about corporate governance concerns and particularly the role of Viet Dinh who counts as an independent director of News Corp. despite recent reports that he is friends with Murdoch son Lachlan, Murdoch said that Dinh was a “completely independent” director. He added that the board was “strong” and “very open” in its discussions with no plans in place to make changes. But he later acknowledged that News Corp. and its board will continue to evaluate corporate governance issues.
Murdoch early on the call also said he was “disappointed” that he had to give up his bid for full control of BSkyB.
Asked about his view of the newspaper business, Murdoch signaled no interest in selling his company’s newspapers, saying he remains “confident” in them, even though he was “shocked and appalled” at what happened at the News of the World. Many on Wall Street have expressed hope that News Corp. will end up selling its newspaper assets.
The CEO also said Wednesday he was “personally determined to put things right” amid the phone hacking scandal. “We are all committed to doing the right thing.” Ethics and integrity are important to News Corp., and the phone hacking scandal doesn’t reflect the work of the conglomerate’s 50,000 employees worldwide, he argued. Business practices like that “have no place” at the company, he emphasized. He later also said that “in retrospect, we should have continued to investigate” the phone hacking allegations.
Murdoch also said that the scandal has had “no material impact” on operations outside of the News of the World.
News Corp. in its earnings report Wednesday acknowledged that it is subject to “several ongoing investigations by U.K. and U.S. regulators and ?governmental authorities, including investigations into whether similar conduct may have occurred at the company’s subsidiaries outside of the U.K.” It reiterated that it is “fully cooperating” with these investigations. “We are acting decisively in the matter and will do whatever is necessary to prevent something like this from ever occurring again,” Murdoch said.
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