News Corporation boss Rupert Murdoch has described the News of the World scandal as “a major black eye” for the company but has reiterated his enthusiasm in the media group’s future and his intentions to “put things right”.
Murdoch detailed his regret of the scandal, which saw the NotW closed down in July, in a letter attached to News Corporation’s annual financial report.
In the letter Murdoch described the event, and the subsequent parliamentary hearing, as “the most humbling episode" of his career and has promised to hold those involved in the scandal accountable for tainting the image of global media empire.
“As has been widely publicised, our company has received a major black eye from the phone hacking scandal at our NotW newspaper in the UK.
“Let me be clear, the behaviour carried out by some employees of NotW is unacceptable and does not represent who we are as a company.
“It went against everything that I stand for. That behaviour betrayed not only our readers, but also the many thousands of magnificent professionals in every one of our other divisions around the world. It was a painful decision to shut down NotW, but it was the right thing to do,” Murdoch said.
Murdoch said News Corporation has launched its own internal investigation and had appointed former US Justice Department official Joel Klein to help lead the company’s efforts.
“He (Klein) reports to independent director Viet Dinh, who in turn is having regular meetings with all other independent directors. The Board of Directors and the company have retained independent counsel, and we are cooperating with the relevant authorities in the UK and US.
“In sum, we have taken decisive actions to hold people accountable – and we will do whatever is necessary to prevent something like this from every occurring again. We will put things right,” Murdoch said.
While conceding litigation and government investigations stemming from the NotW scandal “could damage our reputation and might impair out ability to conduct business”, Murdoch said the company was “better positioned, financially and operationally” than it had ever been.
News Corporation reported a full year net income of $US2.74 billion, up from $US2.54 billion on the year prior.
The company recorded fourth quarter income from continuing operations of $US982 million ($0.35 per share). The company posted a $425 million, or 45%, increase in total segment operating income to $US1.35 billion.
Full year income from continuing operations of $US3.15 billion ($1.14 per share) was well up on last year’s $US2.64 billion ($0.97 per share). The results were largely driven by News Corporation's TV and film assets including blockbuster productions like Avatar and Ice Age: Dawn of the Dinosaurs.
“I’m pleased that once again News Corporation exhibited operational momentum in both the final quarter of the fiscal 2011 and for the full year driven by significant increases at our marketing-leading Cable Network Programming and Television segments,” Murdoch said.
“While it has been a good quarter from a financial point of view, our company has faced challenges in recent weeks relating to our London tabloid NotW … It is important to note that there has been no material impact on our other operations. Our fundamental goals at News Corp are to produce sustained, meaningful value for shareholders, provide outstanding content and services to customers, and do it with integrity. These goals are interrelated and all three are critically important,” he said.
Murdoch will address shareholders at News Corporation’s annual general meeting in Los Angeles on 21 October.
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