Rupert Murdoch Resigns From Boards
News Corp. (NASDAQ: NWSA) Chairman and Chief Executive Officer Rupert Murdoch has resigned as a director of a number of newspapers his company controls. The directorships which he has given up include News International, the U.K. division that publishes the Times and the Sun. He also stepped down from board positions at Newscorp Investments and Times Newspapers Holdings. The resignations come in the wake of the phone-hacking scandal in the U.K., and the announcement that News Corp. will split into two companies, both of which will have Murdoch as the chairman. He will also be the CEO of the entertainment unit.
While News Corp. described the resignations as "nothing more than a corporate housecleaning exercise" ahead of the planned split, market observers believe that the move is designed to distance Murdoch from the phone-hacking scandal. Claire Enders, founder and CEO of media researcher Enders Analysis, told Bloomberg that, “The Murdochs have always been keen to sit on every board and have a finger in every pie." However, she continued, “The newspapers don't benefit anymore in the U.K. from having the ear of Rupert Murdoch." She added that the resignation “seems to me to be potentially pleasing to every constituency.”
News Corp. under pressure from shareholders, announced last month that it will split into two publicly traded entities: publishing and entertainment. The publishing business will consist of newspapers in the U.S., U.K. and Australia along with book, education and marketing units. The entertainment company will include News Corp.'s film and television businesses. In the wake of the news that came out last July that News International's News of the World had hacked into the voice-mail account of a murdered teenager, News Corp. shut down the tabloid and backed out of its plans to purchase the remaining 61 percent of British Sky Broadcasting Group.
Murdoch's reputation has also taken a hit because of the scandal. Earlier this year, Murdoch's son James also stepped down from the board of News International and its newspapers. In addition, he also resigned from his chairman position at BSkyB. “After all, James and Rupert Murdoch are not all that different in the play-out of the scandal,” Enders said. “They've both been heavily implicated in different ways. So this is a response.”
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.