Rupert Murdoch a no-show on News Corp.'s quarterly earnings call
The highlight of News Corp's quarterly earnings call is always the part at the end when chairman and chief executive Rupert Murdoch takes questions from the press.
And so it was a big disappointment to learn, early on during today's call, that the embattled media baron would not be on the line.
Instead, chief operating officer Chase Carey took the reins, and he made it clear from the get-go that he wasn't interested in talking about anything pertaining to the phone-hacking scandal that has rocked the company, shaken its shareholders' confidence and, many believe, threatened Murdoch's plans to pass the company on to one of his heirs. Murdoch's absence from this call is arguably the biggest news to come out of it.
"With so much of the press coverage of News Corporation in recent months focused on the News of the World issues in the U.K., the earnings call is actually a good time to shift gears and talk about our operations," Carey said. "I'm in no way minimizing the issues we face in the U.K., or our committment to properly address them. However, there is not a lot more I can say beyond what has already been said. That is, we are cooperating fully with the authorities in their investigation, and we'll do what is necessary to make things right."
Things could get worse before they get better, with evidence seemingly mounting that James Murdoch, who had been the heir apparent to his father's title, was complicit in the phone-hacking operation at the now-shuttered News Corp. tabloid, News of the World. He's scheduled for a second grilling before British Parliament on Nov. 10.
Carey is now favored among insiders and gossips to be in line to replace Murdoch as C.E.O. if and when he steps down, but on today's call, he wasn't having it.
"We have great confidence in James," Carey said, responding to a question from an L.A. Times reporter. "James has done a good job and we are not contemplating any changes."
News Corp. shareholders seem less impressed with the 39-year-old executive. At their annual meeting several weeks ago, a not insignificant minority of them voted against re-electing James or his brother Lachlan to the board.
Asked by a Reuters correspondent about the apparent lack of shareholder confidence in the Murdoch siblings, Carey said: "We take those votes seriously, and the board will and is discussing those votes. We continue on an ongoing basis to evolve the board ... and we're looking for feedback from our shareholders. We want that engagement."
Meanwhile, in an article for the December issue of Vanity Fair, bits of which the magazine leaked a few hours before News Corp's earnings report landed this afternoon, Sarah Ellison reports that the Murdoch clan has sought counsel from a family therapist to sort through its succession issues.
“Rupert was seriously considering giving up his C.E.O. title and wanted Carey to ‘groom’ James for the job," she writes. "Lachlan, Prudence, and Elisabeth had discussed the move extensively with James. They told James that if they worked together as siblings they could help him and their father have a better relationship, and that together the kids could hold Rupert to account to be a mentor to James and not undermine him.”
As for today's financial results, while net income declined, News Corp. nonetheless beat estimates by posting a 7-percent revenue increase in the first fiscal quarter, with double-digit growth across all segments with the exception of publishing.
In that corner of the organization, operating income plummeted by 38 percent, or $68 million, to $110 million, down from $178 million during the same three-month period a year earlier.
The reason for the slide?
"The impact from the closure of The News of the World in the U.K.," according to an earnings statement.
But the upside was that "the segment operating income decline was partially offset by improved contributions from Dow Jones, driven by higher advertising and circulation revenues at The Wall Street Journal."
The Journal yesterday boasted that it had retained its footing as the most widely-circulated daily newspaper in the U.S., according to the latest data from the Audit Bureau of Circulation. Its average total weekday circulation for the six months ended Sept. 30 was up 1.7-percent year-over-year, to roughly 2.1 million combined digital and physical copies. The paper also boosted circulation for its Saturday edition.