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from Breakingviews:

Zuckerberg and Murdoch rock air-governance shows

By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Mark Zuckerberg and Rupert Murdoch breezed through their latest air-governance shows. Facebook on Tuesday held its first annual meeting as a public company while News Corp shareholders on the same day agreed to split the company. Both may have served the greater good this time, but when founders dominate the voting, as in these two cases, it’s not a given.

Thanks to super-voting Class B stock, Zuckerberg directly controls 54 percent of Facebook votes. Add those he casts for others, and the tally rises to 67 percent. Items on the social network’s proxy – electing directors, two non-binding ballots relating to executive pay, and the appointment of accountants – were hardly controversial, coming so soon after its market debut last year. Even if they had been, though, there was no danger of meaningful dissent. A few shareholders griped about the share price, down nearly 40 percent since the IPO, but that was about it.

At News Corp, it’s a little more complicated. There, Murdoch controls 39 percent of the Class B voting stock – enough to make most things happen. Holders of non-voting Class A shares actually do get a say on certain things, too. In this case, the split of News Corp into a media and entertainment group and a newspaper-led business benefits all – the company’s stock is up 66 percent over the last year, helping it to outpace Disney’s and Viacom’s. But Murdoch’s imperialism has inflicted plenty of damage, too, including overpaying for Dow Jones and presiding over the phone hacking scandal in the UK.

from Alison Frankel:

News Corp deal: a new way to police corporate political spending?

On Monday, the directors and officers of Rupert Murdoch's News Corp agreed to settle a derivative suit accusing them of breaching their duty to shareholders by failing to avert the phone-hacking scandal at the company's British newspapers. News Corp's insurers will pay $139 million, in what shareholder lawyers atGrant & Eisenhofer called the largest-ever cash settlement of derivative claims in Delaware Chancery Court. The settlement, which comes as News Corp prepares to split its news and entertainment branches into two publicly traded companies, was produced after several months of mediation that took place while the company's motion to dismiss was pending before Vice Chancellor John Noble.

The cash portion of the deal (which will be eventually reduced by legal fees paid to G&E, co-lead counsel fromBernstein Litowitz Berger & Grossmann and several other plaintiffs firms that managed to grab a piece of the case) is obviously the big news, but among the many corporate governance enhancements detailed in the memorandum of understanding between News Corp and shareholders, you'll find what appears to be a historic concession by the company: News Corp has agreed to disclose its campaign and political action committee contributions to shareholders and its lobbying and Super PAC spending to the board. According to two advocates for corporate political transparency, this settlement apparently marks the first time that shareholders have used the vehicle of a derivative suit to obtain enhanced disclosure of corporate political spending. "I think it's terrific," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington (CREW). "Any way to force companies to disclose spending is good for democracy."

from John Lloyd:

A free press without total freedom

Journalism gyrates dizzily between the dolorous grind of falling revenue and the Internet’s vast opportunities of a limitless knowledge and creation engine. On the revenue front, no news is good. The just-published Pew Center’s “State of the US News Media” opens with the bleak statement that “a continued erosion of news reporting resources converged with growing opportunities for those in politics, government agencies, companies and others to take their messages directly to the public.” Not only, that is, is the trade shrinking, but those who once depended on its gatekeepers have found their own ways to visibility.

Journalists’ task, as large as any they have collectively faced in 400 years of their trade’s existence, is to find a way to continue the journalism that societies most need and citizens are least willing to pay for: detailed, skeptical, truthful, fair, investigatory writing and broadcasting. It’s a big ask. The British are in the process of not answering it. They are staging a sideshow: not an unimportant one, but in a minor key all the same.

from Nicholas Wapshott:

The crumbling of the Murdoch dynasty

Rupert Murdoch has had a rough few weeks. He had to race to Melbourne, Australia, to visit his 103-year-old mother, Dame Elisabeth, who has died in Australia.* There is nothing like the death of your mother to remind you of your own mortality.

Then last month the political party he supports and largely owns lost the election. When you have Sarah Palin, Mike Huckabee, Roger Ailes, Karl Rove, John Bolton, Liz Cheney, William Kristol, Dick Morris, Oliver North, Rick Santorum, and Newt Gingrich on the books and have all your media properties conduct a virulent, ad hominem campaign against the president, then watch the Republicans lose so convincingly, it must be hard to know where you went wrong.

Then on Monday Murdoch announced his reluctant splitting of News Corp. in two, dividing the company between News Corp.--containing the mostly hard-copy waning press properties he dabbles in as an expensive hobby--and Fox Group, made up of the money-making media properties, like the Fox movie studio, the Fox TV network, and Fox News, that the company’s non-family and therefore non-voting shareholders prefer. The restructuring was forced upon Murdoch in the wake of the revelation that phone hacking had become quotidian at his British newspapers, a crime of which, despite his addiction to editorial micromanagement, he has always denied all knowledge. Had he not taken the initiative and divided his company, the report by Lord Justice Leveson on corruption in the British press might have demanded a more painful remedy.

from Jack Shafer:

The Daily didn’t fail–Rupert gave up

When you're as wealthy as Rupert Murdoch ($9.4 billion) and you control a company as resource-rich as News Corp (market cap $58.1 billion), shuttering a 22-month-old business like The Daily doesn't signify failure as much as it does surrender.

Murdoch knew what he was getting into when he launched the iPad-only (and then smartphone, Android tablet, and Kindle Fire) publication in February 2011. At a press conference, the mogul claimed to have invested $30 million pre-launch and assumed running costs of about $500,000 a week. According to a report in the New York Observer, attributed to a "source," the operation was amassing annual losses of $30 million. But again, for someone like Murdoch, $30 million is chump change. His New York Post loses up to $70 million a year, according to some accounts, and you don't see him closing it. Such losses are rounding errors in the company's entertainment budget.

from Breakingviews:

Disney chief’s unlikely fairy godfather: Murdoch

By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Rupert Murdoch makes an unlikely fairy godfather. The News Corp boss is more often portrayed as a cartoonish evil villain, especially inside rivals like Disney. But by paying a punchy price for a big piece of the Yankees Entertainment and Sports Network, Murdoch is implying an even richer valuation for ESPN than is already attached to the coveted Disney sports brand. That in turn makes the whole Magic Kingdom look worth more.

from Lucy P. Marcus:

Should big investors be fleeing Murdoch?

Following the proceedings of the News Corp annual general meeting, one can’t help but think of the proverbial definition of insanity: doing the same thing over and over again and expecting a different result.

I’m not talking about Rupert Murdoch. He’s been doing the same thing for years and always getting the result he wanted. He comes away from yet another AGM with the dual roles of CEO and chairman firmly in hand. Also, the dual voting stock structure remains so that, though Rupert Murdoch and his family own approximately 12 percent of the shares, they hold 40 percent of the voting power. In essence, Rupert Murdoch and his family control the decisions and destiny of the company relatively unchallenged. Both Rupert Murdoch and News Corp board member Viet Dinh made abundantly clear during the board meeting that this was not going to change. Though the company has gone through the motions of appointing new independent directors, the choices suggest a not-so-subtle sense of humor: One of the new independent directors is the former president of Colombia, Alvaro Uribe, who was embroiled in a wiretapping scandal of his own.

from Breakingviews:

Investors may live with outrageous News Int payoff

By Robert Cole

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Shareholders in News Corp would be forgiven for being outraged at a report that Rebekah Brooks, the former CEO of News Corp’s UK newspapers, has received a 7 million pound “payoff”. She left her post in July last year as allegations of phone hacking engulfed the News of the World and led to the abrupt closure of the Sunday tabloid owned by the company.

from Breakingviews:

FT sale would defy today’s financial times

By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A sale of the FT would surely defy the financial times the newspaper documents. The impending departure of Marjorie Scardino as chief executive of Pearson, parent company of the Financial Times, makes a change of ownership more likely. Her replacement said on Wednesday the publication is a “highly valued” asset. But the paper’s status could make it more valuable to someone else.

from Anatole Kaletsky:

Does Murdoch’s paywall reversal signal a sale of The Times?

Rupert Murdoch conceded defeat this week in his battle with Google and the Internet, an adversary even more powerful than the British government. Murdoch, uniquely among the world’s media magnates, decided two years ago to create a “paywall” for the London Times that could not be penetrated by Google and other “parasitic” search engines. In effect, the paper was cut off completely from the public Internet. As one of Murdoch’s newspaper managers later described this strategy: “Rupert didn’t just build a paywall; he circled it with barbed wire, dug a moat around it and put crocodiles in the moat.”

On Monday Murdoch relented. Times articles started reappearing in Google searches, although anyone wanting to read them still has to pay £1 for one day’s paper or £2 per week. Coincidentally, News Corp, Murdoch’s holding company, announced the departure of its chief digital officer, Jonathan Miller. And Murdoch himself stood down as chairman of Times Newspapers, the News Corp subsidiary that controls his upmarket British papers.