News Corp. hangs onto its dual-class stock system
NEW YORK -- Rupert Murdoch's control of News Corp. nws remained secure on Friday after 77% of the company's shares were cast against a proposal to end the media giant's two-tiered stock structure.
He told shareholders meeting here that a system with super voting shares — giving him 39% of the company votes although his family owns about 15% of the equity — promotes stability, long-term planning and needed risk-taking.
"Everybody knows where they stand when they buy News Corp. shares, or The Washington Post, or The New York Times, or a number of other companies" that have dual-class stock, he said.
Opponents say the system also enables some families to remain entrenched at companies that would benefit from change and new ideas.
Last week, a fund at Morgan Stanley sold its 7.2% stake in The New York Times Co. nytafter losing a battle to force the company to end its two-tier stock system.
The clash over voting rights provided a backdrop to a meeting where Murdoch shared several thoughts about his far-flung media empire. Among them:
•Murdoch dismissed objections by a representative of the Parents Television Council to allegedly indecent programming during early-evening family-viewing hours in some time zones on episodes of Fox's The Family Guy and American Dad and FX's Dirt.
"People have a couple of hundred channels," Murdoch said. "They don't have to watch these things."
News Corp. President Peter Chernin added, "Unfortunately, children are exposed to lots of things. I'm frankly more concerned about them being exposed to the Internet than anything on television."
•Murdoch had a cool response to attorneys general from Connecticut, Pennsylvania and other states who want MySpace.com to verify ages of its users to help prevent young fans from being victimized by older online predators.
"We've had ongoing talks" with some of the attorneys general, Murdoch said. But "It's impossible to guarantee age verification."
•Murdoch says he isn't interested in MySpace rival Facebook, at valuations above $10 billion.
"They are more of a utility for friends to connect with each other," he says. By contrast, on MySpace, "People can reach out and make new friends, discuss hot topics and common interests."
•After his $5 billion acquisition of Dow Jones djis complete, Murdoch said, he will beef up The Wall Street Journal's coverage of national, international and cultural affairs to make it more appealing to general audiences. He also will create websites for overseas consumers of business news.
"People are prepared to pay very well for up-to-the-minute information about everything that's happening in their industries, wherever they are in the world," he says. "We think it's got great potential."
•Murdoch continues to weigh a proposal to eliminate subscription fees for the Journal's WSJ.com, making it a free site.
•Murdoch said he's "confident" that his new Fox Business Network will attract more than half of TV business news viewers, but its growth must be measured "in terms of years, not months."
Murdoch says FBN likely will lose $70 million this year — and cost as much as $200 million before it breaks even.
"It will get better as it goes along, but it's already had some outstanding programs," he says.
Although CNBC has a deal giving it the right into 2012 to air the Journal's business news and business news reporters, Murdoch said, "It does not cover all of the other sections of the paper, and we expect increasing participation" from them at FBN.
He said a decision on beaming FBN overseas will come "somewhere down the road."