News Corp UK dons Norwegian plumage

The Telegraph in London has gone back into the story that News Corp UK could face corporate charges and repeats the inane line that in response Rupert Murdoch “could close UK newspapers”. It’s repeated over the place, for example here.

It’s the Monty Python Dead Parrot Sketch approach to newspaper futures. The Sun and The Times remain in their current position only cos they’re nailed to the perch. News loyalists would say they’re only resting. Or stunned. Or shagged out following a prolonged squawk. Pining for the fjords.Beautiful plumage, the Norwegian Blue.

At the same time News Corp critics are saying the real prospect is that they will be deceased. No more. Pushing up daisies.  They wouldn’t get up and Voom if you put three million volts through them. Off the twig. Their metabolic process are now ‘istory.  Shuffled off their mortal coil.

All of which is based on the assumption that if News Corp UK faces corporate charges, that News Corporation as the parent will pull the plug on all the British newspapers.   

This is nonsense. It’s misconceived and out of date. 

You stunned him, just as he was wakin’ up! Norwegian Blues stun easily, major.

Last year News Corp lawyers are reported to have flagged that laying corporate charges against News International (now renamed News Corp UK& Ireland) would kill the company and put 46,000 jobs in jeopardy. As the Telegraph notes:

 However, the potential case would “go away” altogether if the company News UK ceased to exist, in the same way as the CPS cannot press charges against a person who has died.

The reason for News Corp to take such a drastic step is that the corporate charge

. . . could criminalise the News UK board and have severe knock-on effects on the rest of Mr Murdoch’s business interests, especially in the US.

The concern is that it would endanger Fox Television licenses and other Fox operations in the US. The claim reads like grandstanding. But whatever the reality of this concern at the time it was raised, life has moved on. Since June 28 those vulnerable US assets have been held by a completely separate company, 21st Century Fox. Just like independent countries, independent companies have no permanent friends, only permanent interests.

Any attempt to close down News Corp UK and its still profitable newspaper operation will cost News Corp shareholders a large amount of future profits. If those operations are closed down to prevent action being taken against assets that belong to 21st Century Fox, then News Corp shareholders are subsidising 21st Century Fox shareholders.

News Corp has a code of ethics for the CEO and senior financial officer which deals with conflict of interest. /

The immediate effect of any such move to close News Corp UK would be a class action shareholder suit against News Corp and its directors.

If it went that far. But the reality is that because News Corp and 21st Fox are separate companies, no action to distance them would be necessary. There is no direct contagion. The only threat is from their shared directors—in particular James and Rupert Murdoch, both former directors of News Corp UK.

In such case any move to close News Corp UK would only be to the benefit of the Murdochs, at the cost of News Corp shareholders. That’s not going to happen.

But merely reporting it as if it might plays into public perceptions of whether or nor corporate charges should be laid. There are pros and cons for laying such charges. Claims about newspaper closures are a dangerous irrelevance.

Private Eye has a far more useful consideration of the arguments for charges, versus a Deferred Prosecution Agreement (copping a no-admissions fine).

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s