The Wall Street Journal has released a bulldog defence of its owner Rupert Murdoch and slammed the phone-hacking scandal as a row blown out of proportion by its business competitors.
It follows criticism of the media mogul for trying to tame the mounting crisis after he tried to save the BSkyB deal, protect News International CEO Rebekah Brooks and close the tabloid newspaper.
Backing: The Wall Street Journal has dismissed the phone-hacking scandal as a row blown out of proportion by its business competitors and defended News Corp owner Rupert Murdoch, pictured on Monday in London
News Corp’s value crashed 13 per cent last week following the closure of the News of the World after reports employees had intercepted the voice mail of murdered UK schoolgirl Milly Dowler.
Going down: News Corp valued at only half sum of its parts, analysts say
Estimates from Barclays Plc and Gabelli & Co suggest News Corp is still worth $62billion to $79billion when its businesses are valued separately, even though it is currently a $41billion company on the market.
This shows News Corp is trading at almost a 50 per cent discount to its units, reported Bloomberg.
Virginia analyst Michael Morris calculated News Corp is worth around $25 a share, which values it 60 per cent higher than the company’s closing price last week of $15.64.
‘There’s just sort of this generic Murdoch discount, which encompasses the concern that he will make decisions that are not consistent with other shareholder interests,’ he told Bloomberg.
But Mr Murdoch has denied News Corp is all about him, after saying last week the company is ‘the collective creativity and effort of many thousands of people around the world’.
‘We trust that readers can see through the commercial and ideological motives of our competitor-critics,’ a Wall Street Journal editorial said in today’s newspaper as it tried to defend itself.
The editorial criticised The Guardian - referred to as a publication that ‘give(s) Julian Assange and WikiLeaks their moral imprimatur’ - for its ‘lectures about journalistic standards’.
‘They want their readers to believe, based on no evidence, that the tabloid excesses of one publication somehow tarnish thousands of other News Corp journalists across the world,’ it said.
‘Politicians and our competitors are using the phone-hacking years ago at a British corner of News Corp to assail the Journal, and perhaps injure press freedom in general’.
The paper said it was ironic so much moral outrage is being directed at one media company when the British press is known for buying scoops - but claimed it ‘doesn't pay sources for information’.
News Corp’s fiercest critics suggest the company has not been apologetic enough for the scandal, which has now engulfed two of Britain’s top policemen - Sir Paul Stephenson and John Yates.
Controversial: The Wall Street Journal editorial criticised The Guardian - referred to as a publications that 'give(s) Julian Assange and WikiLeaks their moral imprimatur' - for its 'lectures about journalistic standards'
‘The shell of invulnerability that Rupert Murdoch had around him has been cracked,’ Boston University professor James Post told the Washington Post. ‘His credibility and the company’s credibility are haemorrhaging.’
News Corp shares falling again
News Corp's widely traded Class A shares fell 69 cents, or 4.4 per cent, to $14.96 in early afternoon trading on Monday.
The shares are down 15.5 per cent since the end of June, compared with just 1.7 percent for the S&P 500 index.
Mr Murdoch, 80, and his son, James, 38, are preparing for a UK parliamentary committee on Tuesday, when they will be questioned on their roles and responsibilities in the phone hacking scandal.
News Corp’s recent slump has cut more than $6billion off the combined value of the shares that give the Murdoch family control over the company, reported the Washington Post.
Some News Corp directors have suggested Mr Murdoch, company chairman and CEO, is in denial over the fallout from the scandal and does not realise how much it has destroyed what he has built.
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