Scandal highlights big Murdoch discount

(The authors are Reuters Breakingviews columnists. The opinions expressed are their own.)

By Jeffrey Goldfarb and Richard Beales
NEW YORK, July 13 (Reuters Breakingviews) - Rupert Murdoch's political influence may be surpassed by his impact on the value of News Corp. The stock routinely trades more cheaply than media rivals largely because the company is run at Murdoch's whim. A Breakingviews calculator shows how big the Murdoch discount has become as a result of the scandal at the News of the World tabloid.
The Murdoch Discount: What's the market value of News Corp compared with the sum of its parts?
Run the numbers: http://r.reuters.com/sek62s
Live calculator for Eikon users: http://link.reuters.com/xek62s

The phone-hacking affair not only forced News Corp to shutter its most widely read newspaper but also has finally forced the company to withdraw a $14 billion plan to buy the rest of the British pay-TV operator BSkyB. The damage could extend to the company's American and Australian businesses. U.S. Senator Jay Rockefeller, for instance, has called on Congress to open an investigation that would accompany those under way in Britain.
The News Corp enterprise now trades at a paltry five times estimates of its EBITDA for the fiscal year 2012, according to analysts at Credit Suisse. That's 40 percent less than media groups like Walt Disney and Time Warner -- double the typical gap seen since 2002. Worse, the gap between News Corp's market value and the sum of its sprawling parts is widening, according to a Breakingviews analysis using divisional profit forecasts by Barclays Capital and comparable valuation data from Thomson Reuters.
The biggest and most valuable component of the empire is its American cable networks, including Fox News. Put them on a multiple of nine and they're worth more than $30 billion. The movie studio behind global blockbuster "Avatar" and the U.S. Fox broadcast network, home to hit shows like "American Idol" and "Glee," are lumpier businesses but together should be worth over $12 billion.
The publishing arm at the heart of News Corp's troubles warrants a lower multiple of four, between those of Britain's Trinity Mirror and the New York Times, or just over $5 billion. The Sky Italia satellite unit and various private stakes add north of $6 billion, and stakes in publicly traded companies bring another $10 billion-plus, three-quarters of which is accounted for by News Corp's 39 percent stake in BSkyB.
Ignore the unprofitable digital unit, tot it all up and strip out net debt of around $4 billion, and News Corp ought to be worth about $60 billion. The market values the shares almost 30 percent lower than that. For shareholders, that's the downside of Murdoch's clout writ large.

CONTEXT NEWS
-- News Corp on July 13 withdrew its $14 billion bid to buy the 61 percent of UK pay-TV company BSkyB that it doesn't already own following a phone-hacking scandal at its British tabloid News of the World.
-- The newspaper published its last edition on July 10 after News Corp decided abruptly to shut it down. The company on July 12 announced a $5 billion share buyback plan, increasing the $1.8 billion remaining on a previous scheme.
-- News Corp shares were trading at around $16.25 apiece in the early afternoon of July 13, giving the company a market value of about $43 billion.
-- News Corp buyback announcement: http://link.reuters.com/pyj62s

((jeffrey.goldfarb@thomsonreuters.com; richard.beales@thomsonreuters.com))
(Editing by Richard Beales and Martin Langfield)

===

SNAPSHOT-Developments in U.S. debt talks

13 Jul 2011 17:19

Source: reuters // Reuters

WASHINGTON, July 13 (Reuters) - Here is what is happening on Wednesday concerning negotiations to raise the U.S. $14.3 trillion debt limit.

* President Barack Obama expected to meet congressional Republican and Democratic leaders for a fourth straight day of talks in an effort to strike a deficit reduction deal to clear the way for a debt ceiling hike. Meeting set for 4 p.m. EDT (2000 GMT).

* U.S. Federal Reserve Chairman Ben Bernanke tells U.S. House of Representatives panel that failure to raise debt ceiling by Aug. 2 deadline will force an immediate 40 percent cut in government spending.

* Bernanke says the U.S. treasury will pay obligations to U.S. debt holders to avoid global financial market disarray. He warns of significant cuts in Social Security, Medicare, and military pay. The central bank chairman is not a member of the administration but the Federal Reserve has been involved in Treasury discussions on how to prepare for a possible default.

* Senate Majority Leader Harry Reid says backup proposal by Senate Republican Leader Mitch McConnell to raise the debt ceiling by $700 billion could help resolve impasse. Democratic aides says Reid working with McConnell to modify his plan to require some spending cuts.

* Republican presidential candidate, Representative Michele Bachmann, a Tea Party favorite, says "Obama is holding the full faith and credit of the United States hostage so he can continue his spending spree."

* Several conservative House Republicans question assertions that the U.S. government would be forced to cut back Social Security and other benefit payments if credit limit not raised. They proposed a bill that would require the U.S. Treasury to prioritize military pay and payments to bond holders over other spending if Congress fails to raise debt limit.

* Senator Charles Schumer, a member of Democratic leadership, in a Senate floor speech pointed a finger of blame at House Majority Leader Cantor, saying he has essentially been the only congressional leader refusing to compromise.

* U.S. Treasury Department releases monthly budget statement for June. The report showing the size of U.S. deficit nine months into the fiscal year is due out at 2 p.m. EDT (1800 GMT).

* Investors assume Washington will ultimately avert a debt crisis even though the clock is ticking toward an Aug. 2 deadline with no deal in sight. The impasse between Obama and Republican congressional leaders has investors' attention and has made Wall Street jittery. (Reporting by Donna Smith; Editing by Vicki Allen)

===



Reuters
Murdoch junior leaps to defence of feebler father

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

By Robert Cole
LONDON, July 19 (Reuters Breakingviews) - Shaving foam apart, News Corp's founder and his son escaped their UK hearing broadly unscathed. Their studied display of polite contrition neutered questions from members of parliament. But while James Murdoch gave an assured performance, Rupert Murdoch appeared bemused(So lost in thought as to be unaware of one's surroundings) and out of touch.
Murdoch senior may attract some sympathy after being accosted(To approach and speak to boldly or aggressively, as with a demand or request.) by a protester. Prior to that intervention, however, the media mogul had failed to live up to his formidable reputation. He looked every bit the 80-year-old man he is.
His performance showed little of the micro-managerial control that many have long assumed he exerts over his UK newspapers. The pauses that preceded many of his responses were almost embarrassing. He often deferred to his son, who frequently helped his father answer questions.
The hearing is not the end of the line for Rupert Murdoch. But investors could be forgiven for wondering if he still has the requisite energy to continue as News Corp's chairman and chief executive officer for much longer.
In surprisingly stark contrast, James Murdoch appeared sharp, helpful and authoritative. There were a couple of awkward moments, notably when the two were asked about help with legal fees incurred by the private investigator at the centre of the phone-hacking scandal, as well as payments to Gordon Taylor, the sports administrator. James Murdoch probably divulged less than he appeared to, but he will count that as an achievement.
The junior Murdoch is not out of the woods yet. Further revelations in the phone-hacking case could yet compromise his roles at News Corp, and as chairman of British Sky Broadcasting. But if the scandal lifts, his influence over the company his father built will increase.
News Corp shares, which had fallen by 17 percent since the scandal broke at the start of July, rose 5 percent. This may be interpreted as a vote of confidence in the Murdochs' ability to steer News Corp out of its troubles. But it may also reflect relief that the hearing served up no new horrors.
The share-price rise may also signal a hope that the Murdoch family's fierce grip over the media empire is on the wane. Rupert's performance did nothing to dispel that impression.

CONTEXT NEWS
-- Rupert Murdoch, the chairman and chief executive of News Corporation, the New York-listed media company, appeared before a committee of UK parliamentarians on July 19.
-- His son James, who is deputy chief operating officer of News Corp and chairman of BSkyB, the satellite broadcaster 39 percent owned by News Corp, appeared alongside him.

((robert.cole@thomsonreuters.com))
(Editing by Peter Thal Larsen and Martin Langfield)

===

After tiger mom, here comes the tiger wife
Updated: 2011-07-22 08:02
By Raymond zhou (China Daily)
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1

When Wendi Deng made a rare public appearance a month ago at the Shanghai International Film Festival, together with her husband Rupert Murdoch, the strongest impression she left on my colleague was her height: "She is really tall and stands out," I was told.

Deng, possibly the most powerful woman on the global scene by family association, enjoyed something of a dubious reputation back in her home country. Suffice it to say, she was not universally loved or admired in China.

After tiger mom, here comes the tiger wife

On the contrary, she was seen as the classic gold-digger. Her detractors constantly point out her less-than-glorious history: She was sponsored by an elderly American couple to pursue higher education in the United States, where she ended up marrying the husband - just long enough to obtain her green card.

To many in China, this ran counter to the quintessential Chinese moral principle. Not only did she break up a family, but she seemed to have done it for her own convenience rather than for loving the man, 30 years her senior.

No spinmeister could turn that episode into a touching love story. Even normally nationalistic youth in China have poured out sympathy for the American couple, Jake and Joyce Cherry.

But all that ill-will was largely washed away when Deng came down on Murdoch's attacker during Tuesday's Parliamentary hearing. Most online opinions in China hurrahed her.

In a Sina Weibo poll, about 70 percent cheered for her, 20 percent said the incident had completely changed their mind about her, leaving only 10 percent who still believed she is a manipulative woman whom they "dislike".

A lot of people associated her knee-jerk reaction with love. They were convinced Deng did it out of love for her husband. "This made us believe in love again," summed up a Tencent post, implying that the flurry of recent celebrity divorces have shaken public confidence in the foundation of a hallowed institution.

Some attributed Deng's "slam dunk", half-jokingly perhaps, to her volleyball skills that date back to her high-school years in Jiangsu province. Other jokes include suggestions that she should be assigned the task of safeguarding China's South Sea islands because of her uncanny ability to protect her territory.

Not everyone was convinced, though. A netizen with the handle "Walking Vivian" posted: "I respect Wendi Deng's choices in life, but I hope we do not elevate her to a source of pride. She destroyed the marriage of someone who had helped her because she needed a green card, and later she destroyed Murdoch's marriage that had lasted many years. She was unscrupulous every step of the way. If we admire her current success, that would be too materialistic and bone-chilling."

There are also conspiracy theories that put Deng's decisiveness and the subsequent rise of News Corp stock together, suggesting she could have arranged the pie throwing. "Sister Deng, do you need to pay the actor afterwards? After this, Rupert may have to change his will," writes "Doyen-Vest", a netizen suspicious of the whole affair.

The traditional virtues of a Chinese wife range from being demure in public to having multiple talents such as painting and music. This week Deng played the role to a hilt, and with a modern twist. She kept a low profile during much of the hearing, yet remained quite conspicuous by the color of her dress. When the occasion called for it, she displayed an agility and a physical stamina that are worthy of Chinese martial arts.

Zhang Yihe, a prominent female scholar, summed it up this way: "Whatever your attitude toward her as a person, she turns out to be the 'right' wife."

China Daily

===

Rupert Murdoch's wife Wendi Deng finally flocks to her husband's side on eve of Parliamentary questions



By Rachel Quigley

Last updated at 9:09 AM on 19th July 2011

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On the eve of one of Rupert Murdoch's biggest challenges since the phone hacking scandal broke, his wife Wendi Deng became the latest member of his family to flock to his side.

Tomorrow the media tycoon will face parliament to answer questions about the scandal - which brought down one of News International's biggest papers the News of the World, which closed last week.

Until now, Wendi - Murdoch's third wife - had remained in New York keeping out of the glare of the media while her 80-year-old husband was in London.
Support: Wendi Deng arrived at her husband's London home tonight on the night before he is due to face MPs in parliament

Support: Wendi Deng arrived at her husband's London home tonight on the night before he is due to face MPs in parliament

Probe: News Corp Chief Executive Rupert Murdoch is due to face MPs tomorrow to answer questions about the phone hacking scandal

Probe: News Corp Chief Executive Rupert Murdoch is due to face MPs tomorrow to answer questions about the phone hacking scandal

But she joined his sons James and Lachlan and daughters Elisabeth and Prudence on the eve of his public appearance before MPs.

His children have been by his side since the scale of the crisis facing the family and the company it controls became clear last week.

But Ms Deng was busy entertaining the A List in the Hamptons at the weekend while her husband continued to face flak in the UK, with more News International chiefs coming under fire as further allegations emerged.


More...

James Murdoch to face police grilling over 'hush money' to hacking scandal victims
Cameron in crisis: Now FOUR police chiefs face inquiry as PM is forced to call emergency session on phone hacking
News Corp chiefs 'discuss whether Murdoch can continue as CEO' as he hires team of media coaches for tomorrow’s Commons grilling

According to Showbiz 411, in the middle of the scandal that may topple Murdoch’s empire, Ms Deng was showing her film on Saturday to guests like Barbara Walters, Rudy and Judi Nathan Giuiliani, former Sotheby’s chief Alfred Taubman, Sony’s Rob Wiesenthal, and Warner Music’s Lyor Cohen and designer Tori Burch at the Southampton UA theatre.
Outing: She was last seen on July 6 with Kathy Freston, wife of Firefly3 principal Tom Freston during the first day of the Allen and Company Sun Valley Conference

Outing: She was last seen on July 6 with Kathy Freston, wife of Firefly3 principal Tom Freston during the first day of the Allen and Company Sun Valley Conference
James Murdoch scaled the rungs of the global media empire that his father built.
CEO of Shine Limited and daughter Rupert Murdoch, Elisabeth Murdoch

Family affair: Daughter Elizabeth and son James have flocked to their father's side since the phone hacking scandal broke

The move, Wayne Wang's Snow Flower and the Secret Fan, is an adaptation of a novel that cuts between present day China and the 1800s featuring Hugh Jackman.

She was last pictured lunching with Kathy Freston during a break on the first day of the Allen and Company Sun Valley Conference on July 6, which is annually attended by the world business elite, global political leaders, entertainment giants and major figures in international philanthropic and cultural spheres.

Since the scandal broke, there has been at least one 'family summit' in the UK Murdoch household, when Murdoch's daughters were said to have persuaded him to accept the resignation of Rebekah Brooks – in the face of opposition from James.

Prudence, Mr Murdoch eldest daughter from his first marriage, has played little part in the company's affairs but is now on the board of Times Newspapers.

She is married to Alasdair MacLeod, who stepped down last year after 20 years as a News Corp executive and is known to be especially close to her father.

Read more: http://www.dailymail.co.uk/news/article-2016290/Rupert-Murdochs-wife-Wendi-Deng-London-Parliamentary-questions.html#ixzz1TOWszLk2

===
BSkyB dishes out $1.6 bln to appease investors

29 Jul 2011 16:34

Source: reuters // Reuters

* 750 mln pound share buyback, 253 mln special dividend

* Full-year sales, profits beat expectations

* Customer additions slow

* CEO says won't prejudge Murdoch, outcome of investigations

* Shares close down 0.6 percent (Adds closing share price)

By Paul Hoskins and Georgina Prodhan

LONDON, July 29 (Reuters) - BSkyB will hand out 1 billion pounds ($1.6 billion) to placate(To allay the anger of, especially by making concessions; appease) investors who lost out when a phone-hacking and police corruption scandal forced News Corp to drop its bid for the satellite broadcaster.

BSkyB, whose board on Thursday voted unanimously to keep the embattled James Murdoch as its chairman, will return 750 million pounds to investors with a share buy-back and a further 253 million via a 20 percent boost to the final dividend.

News Corp agreed to take part in the buyback to prevent its stake from creeping above its current 39 percent, BSkyB said on Friday. Any increase would have been politically contentious while the phone-hacking scandal hangs over the company.

"We view the share buyback announcement as positive, particularly given News Corp have agreed to participate," one of BSkyB's 10 largest shareholders told Reuters.

"The 750 million pounds quantum is sensible and allows a balanced approach between returning cash to shareholders while maintaining financial flexibility to pursue growth opportunities," the fund manager said.

BSkyB also released full-year results that beat expectations for sales and profits, though a slowdown in customer additions showed the impact of economic weakness and perhaps the fact that management attention had been focused on the failed bid.

Shares in BSykB initially rose slightly on the news but closed down 0.6 percent at 712 pence, broadly in line with the wider market.

"Ordinarily, one might expect a buyback of this size, equivalent to 7 pct of share capital, to lead to both decent upgrades and a decent share price reaction," said Alex DeGroote, media analyst at brokerage Panmure Gordon.

"Our sense is that Sky faces a challenging 2012 in terms of its core business. The company gave an impressive performance in 2010/11, but the management that delivered it probably didn't expect the plc to remain a going concern in FY12," he said.

GROWTH CONCERNS

As well as being a consolation prize for investors and for News Corp -- which will make 390 million pounds instead of the hoped-for consolidation of BSkyB's substantial cash flows -- the move may signal a shift at BSkyB if growth begins to slow.

"While there's still concern about growth, they may be more open to share buybacks, and that potentially helps News Corp as well," said Ian Whittaker, media analyst at Liberum Capital.

Shares in BSkyB have fallen by more than 15 percent since the News Corp bid premium evaporated and the long-simmering phone-hacking case erupted into a national outrage this month.

Allegations of hacking at a title since closed by News International, News Corp's British newspapers unit, in particular reports that journalists accessed the voicemails of murder victims, have triggered a judicial inquiry and calls from some politicians to cap Murdoch's media ownership.

There have also been allegations of payments to police officers for information and overly close links between News International personnel and senior police officers. Two of Britain's most senior officers have already handed in their resignations.

This makes any renewed approach for BSkyB, whose current market value is $20 billion, a distant prospect.

STRONG CASH FLOW

BSkyB's appeal to News Corp was highlighted as the broadcaster reported a 51 percent jump in adjusted free cash flow to 869 million pounds on the back of a 19 percent increase in core profit to 1.4 billion.

The broadcaster, which offers broadband and telephone services in addition to its core premium sports, movies and drama pay-TV offerings, increased revenue by 16 percent to 6.6 billion pounds, beating analysts' forecasts.

"Given the tough environment, we're pleased with our growth this quarter," BSkyB Chief Executive Jeremy Darroch told journalists on a conference call.

In a sign that its subscribers may be feeling the pinch as the British economy struggles, the company said average revenue per user (ARPU) dipped to 539 pounds per year at the end of the fourth quarter from a rate of 544 pounds in the third.

BSkyB said a technical issue related to less frequent publishing of a magazine was largely to blame, but its number of TV customers rose by just 40,000, well below the expected 60,000, taking the total TV customer base to 10.2 million.

Rival Virgin Media , which sells TV and telephone services alongside Britain's fastest broadband, this week said it had lost 36,000 cable customers but extracted higher spending from the ones who remained.

BSkyB has frozen subscription prices until next year, and Darroch said he expected the consumer environment to remain difficult. Britain's economy barely grew between April and June, according to figures released this week.

Nonetheless, Darroch said BSkyB remained focused on organic growth, and the company said it had won rights to broadcast Formula One racing in a partnership deal with Britain's public service broadcaster, the BBC .

The dividend lifts BSkyB's payout for the full year by 20 percent to 23.28p per share, creating a total dividend pot of 405 million pounds of which News Corp, as 39 percent shareholder in BSkyB, will get about 160 million.

News Corp has seen its stock fall more than 10 percent on fears of reputational damage to the wider group, wiping billions of dollars off its market value and shaking Rupert Murdoch's grip on the media group.

As well as derailing the planned buyout of BSkyB, the scandal forced Murdoch Snr to shut the 168-year-old News of the World tabloid at the heart of the scandal and rocked the British political establishment.

Asked on Friday why BSkyB's board had decided to keep James Murdoch as chairman while investigations by police, a top judge and a parliamentary committee continue, Darroch said: "It's not for me or for Sky to preach as to the outcome of those."

James Murdoch, who is head of News Corp's international operations, and is based in Wapping, the HQ of the UK newspaper operations, has already appeared before the British Parliament's Culture, Media and Sport Committee to give evidence on the phone hacking scandal.

On Friday the committee said he would probably be recalled to clarify details following claims his evidence was "mistaken". ($1 = 0.612 British Pounds) (Additional reporting by Sinead Cruise; Editing by Chris Wickham and Will Waterman)

===
NOTW Bosses 'Widely Discussed' Hacking

James Murdoch is likely to be recalled to give evidence to MPs after a letter was published claiming phone hacking was "widely discussed" at the News Of The World.

The News International chairman appeared in front of the Culture, Media and Sport (CMS) Committee in July.

He told MPs he was "not aware" of an email suggesting phone hacking was not limited to one reporter at the News Of The World (NOTW).

But MPs have been sent documents that appear to cast doubt on this claim.

The CMS committee has published a letter written four years ago by former royal editor Clive Goodman, who was jailed in 2007, saying hacking was "widely discussed" at editorial meetings at the Sunday tabloid until the then editor Andy Coulson banned further mention of it.

It went on to say that Mr Coulson offered to let him keep his job if he agreed not to implicate the paper in hacking when he came to court, and that his own hacking was carried out with "the full knowledge and support" of other senior journalists, whose names have been blacked out in the letter.

james murdoch committee evidence: July 19, 2011

Tom Watson MP, a member of the CMS committee, said the document was "absolutely devastating".

"Clive Goodman's letter is the most significant piece of evidence that has been revealed so far. It completely removes News International's defence. This is one of the largest cover-ups I have seen in my lifetime," he said.

He said the committee had written to Mr Coulson to ask if he wanted to amend his previous evidence.

Mr Coulson has strenuously denied any knowledge of hacking, both before a Commons Select Committee and while he was employed as David Cameron's director of communications at Number 10.

Mr Watson and committee chair John Whittingdale said they will also be recalling former NOTW editor Colin Myler and former legal manager Tom Crone to give evidence on September 6.

Daniel Cloke, who was human resources director at News International, and Jon Chapman, who was director of legal affairs, have also been called to give evidence.

In a statement issued in July, Mr Myler and Mr Crone said they had informed Mr Murdoch about the email and that he was "mistaken".

Clive Goodman's letter

Names of other journalists were blacked out in the letter

Mr Watson said there "seemed to be a question" over whether Mr Murdoch "misled" the committee when he gave evidence to it on July 19.

The basis of James Murdoch's defence to the phone-hacking scandal has always been that he was told there was only one rogue reporter, Goodman, involved in the practice.

But the conflicting accounts hinge on a settlement paid to Professional Footballers' Association chief executive Gordon Taylor in 2008, worth a reported £700,000, after he brought a damages claim against the NOTW.

Colin Myler, editor of the News of The World, holds up a copy of the last edition in Wapping, east London July 9, 2011.

Colin Myler holding the last ever issue of the NOTW

At the committee hearing, MP Tom Watson asked James Murdoch: "When you signed off the Taylor payment, did you see or were you made aware of the full Neville email, the transcript of the hacked voicemail messages?"

He replied: "No, I was not aware of that at the time."

In a statement, Mr Myler and Mr Crone said: "Just by way of clarification relating to Tuesday's CMS Select Committee hearing, we would like to point out that James Murdoch's recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken.

Phone Hacking

"In fact, we did inform him of the 'for Neville' email which had been produced to us by Gordon Taylor's lawyers."

The 'for Neville' email contained a list of transcribed hacked messages obtained by Taylor's lawyers from the police by a court order.

It was one of 11,000 files seized from private investigator Glenn Mulcaire who was jailed alongside Mr Goodman.

'Neville' apparently refers to Neville Thurlbeck who was employed as the NOTW's chief reporter.

Gordon Taylor, chief executive, Professional Footballers' Association

Gordon Taylor brought a damages claim against the NOTW

The Goodman letter was included in a submission released by Harbottle and Lewis, the lawyers appointed to assist News International in dealing with Mr Goodman's appeal against dismissal.

But Mr Watson said a version of the letter was also included in the submission by News International to the committee, with the company's version containing blacked-out references to the "daily editorial conference" and "the Editor".

A News International spokesperson said: "News Corporation's board has set up a Management and Standards Committee, chaired by independent Chairman Lord Grabiner, which is co-operating fully with the Metropolitan Police and is facilitating their investigation into illegal voicemail interception at the News of the World and related issues.

"We recognise the seriousness of materials disclosed to the Police and Parliament and are committed to working in a constructive and open way with all the relevant authorities."

Read more on hacking:

:: Transcript Hightlights: Murdochs Give Evidence

:: Timeline: How The Hacking Scandal Has Unfolded

:: Ex-NOTW Executives Challenge Murdoch's Evidence

:: Hacking Analysis: How Did The Murdochs Perform?
=============

Murdoch reporter's devastating letter blows whistle on News International phone cover-up. Hacking 'widely discussed at News of the World'

MPs 'likely to' recall James Murdoch over claims he misled hacking committee as 'devastating' new information comes to light
Copy of same letter released to MPs by News International has many of the explosive claims removed
Revelations will cause more embarrassment for Prime Minister David Cameron because he decided to employ Mr Coulson
Downing Street refuses to comment on the explosive letter
NotW former lawyer Tom Crone, editor Colin Myler, head of human resources Daniel Cloke and director of legal affairs John Chapman will appear in front of MPs on September 6
Ed Miliband questions the PM's 'catastrophic' judgment for bring Mr Coulson into No. 10

By Martin Robinson

Last updated at 4:39 PM on 16th August 2011

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Top executives from Rupert Murdoch down today faced devastating allegations of a phone hacking cover-up at News International, after former royal correspondent Clive Goodman sensationally claimed that the matter was 'widely discussed' at the News of the World.

MPs said they were 'likely' to recall James Murdoch to give further evidence to the committee examining the hacking scandal, as fresh information emerged which appeared to implicate a raft of top executives and undermine their evidence to Parliament.

In a letter penned by Mr Goodman in 2007 and only made public today, he claimed that hacking was 'widely discussed' in the newsroom until editor at the time Andy Coulson banned all reference to the subject.

The allegations could prove to be very damaging to Mr Coulson and News International chief James Murdoch, who both claimed they believed the hacking was the sole domain of 'rogue reporter' Mr Goodman.


James Murdoch, left, and Rupert Murdoch, giving evidence to the Culture, Media and Sport Select Committee

Further embarrassment could also be heaped on Prime Minister David Cameron, who appointed Mr Coulson as No 10's chief spin doctor.

There are 20 letters in total as well as many e-mail released as part of a large bundle of evidence received by the committee in the last month.

The committee has called Mr Crone, former News of the World editor Colin Myler, former head of human resources Daniel Cloke and former legal director John Chapman to give further evidence on September 6.

The MPs have also written to Mr Coulson and his predecessor as editor Rebekah Brooks, the tabloid's former managing editor Stuart Kuttner, and former News International chief executive Les Hinton to ask whether they wish to clarify earlier evidence given to the committee.

Goodman's claims also raise serious questions about Rupert Murdoch's close friend and right hand man in London at the time, Les Hinton, who was sent a copy of the letter but failed to pass it to police and who then led a cast of senior Murdoch personnel in telling parliament that they believed Coulson knew nothing about the interception of the voicemail of public figures and that Goodman was the only journalist involved.

The letter was said to have been sent to News International HR director Daniel Cloke in March 2007 in support of a claim he was making for wrongful dismissal from the paper.


Clive Goodman has made the explosive claims

'This practice was widely discussed in the daily editorial conference, until explicit reference to it was banned by the editor.' he wrote.

In the letter, Mr Goodman is also said to have stated that he was promised he could have his job back if he did not implicate anyone else on the paper.

'Tom Crone and the editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea,' he wrote.

Two versions of his letter were provided to the committee.

One which was supplied by law firm Harbottle and Lewis, has removed names of journalists at the request of police.

But the other, which was supplied by News International, but this is without references to hacking being discussed at editorial meetings and to Coulson's alleged offer to keep Goodman on staff if he agreed not to implicate the paper.

The words 'daily editorial conference' and 'the Editor' have gone.

The company also faces a new claim that it misled parliament. In earlier evidence to the select committee, in answer to questions about whether it had bought Goodman's silence, it had said he was paid off with a period of notice plus compensation of no more than £60,000.

The new paperwork, however, reveals that Goodman was paid a full year's salary, worth £90,502.08, plus a further £140,000 in compensation as well as £13,000 to cover his lawyer's bill, hacking committee member Tom Watson said: 'It's hush money. I think they tried to buy his silence.'

Murdoch's executives have always denied this.
Spot the difference:

Spot the difference: The above letter was supplied to MPs by law firm Harbottle and Lewis and shows five numbered paragraphs with only the names of journalists blacked out. But below is the same letter, this time submitted by News International, showing that paragraphs three and four are missing completely. These excerpts refer to claims Goodman was employed despite saying he was guilty of hacking and later while in prison. Allegations that Tom Crane and Andy Coulson promised he could have his job back if he did not implicate anyone else on the paper are all missing completely. The News International copy of the letter also redacts( To draw up or frame (a proclamation, for example).
To make ready for publication; edit or revise.) more information relating to the editor and discussions during editorial meetings.

New international version:
HACKING TIMELINE

January 2007: Mr Coulson quit as editor of News of the World after one of its reporters was jailed for phone hacking. He insists he had no knowledge of the practice.

January 2011: He resigned as Mr Cameron’s media chief in January because of continuing media coverage, and was arrested earlier this month over alleged hacking.

Monday July 4 2011: Emerges NotW private investigator hacked into mobile of murdered schoolgirl Milly Dowler in 2002.

Tuesday July 5 2011: Revealed: Parents of murdered schoolgirls Holly Wells and Jessica Chapman contacted by police.

Wednesday July 6 2011: Claims 7/7 victims and soldiers’ relatives also targeted.
Metropolitan Police Commissioner Sir Paul Stephenson says News International made ‘inappropriate’ payments to officers.

Thursday July 7 2011: News International announces closure of NotW as 4,000 potential victims revealed.

Friday July 8 2011: Andy Coulson is arrested on suspicion of phone hacking and corruption.

Sunday July 10 2011: The final edition of the NotW is printed as Rupert Murdoch arrives in UK.

Monday July 11 2011: Former PM Gordon Brown claims that other NI papers illegally obtained his private information.

Wednesday July 13 2011: News Corp withdraws its BSkyB takeover bid.

Thursday July 14 2011: Rupert Murdoch and his son James bow to pressure and agree to join Rebekah Brooks in giving evidence to MPs. Former NotW executive editor Neil Wallis is arrested on suspicion of phone hacking, putting Scotland Yard under pressure to explain why it employed him as a PR consultant in 2009-10.

Friday July 15 2011: Mrs Brooks resigns

Saturday July 16 2011: NI apologise for the NotW’s ‘serious wrongdoing’ in national newspaper ads.

Sunday July 17 2011: Mrs Brooks arrested on suspicion of phone hacking and corruption.
Sir Paul resigns as Metropolitan Police Commissioner.

Monday July 18 2011: John Yates resigns as Scotland Yard Assistant Commissioner. David Cameron cuts short his visit to Africa for an emergency session in Parliament. IPCC is asked to investigate four former and serving senior Met officers. Former NotW showbusiness Sean Hoare is found dead in ‘unexplained circumstances’.

Goodman's letter is dated March 2 2007, soon after he was released from four-months in jail.

It registers his appeal against the decision to sack him for gross misconduct for hacking three royals.

In it he says he acted 'with the full knowledge and support' of named senior journalists and that payments for the private investigator who assisted him, Glenn Mulcaire.

These names have been blanked out from the published letter at the request of the Metropolitan Police.

James Murdoch is likely to be recalled by MPs after files handed to them cast doubt over his evidence to Parliament, it has been revealed.

Amid continued questions about the extent of Mr Murdoch's knowledge of the hacking, the Sunday tabloid's former editor, Colin Myler, and ex-legal manager, Tom Crone, are to be asked to appear in September.

Politicians say there are discrepancies between what Mr Murdoch said last month and evidence from News International executives Colin Myler and Tom Crone.

Mr Myler and Mr Crone said Mr Murdoch had seen an e-mail to Neville Thurlbeck, chief reporter, which contained transcripts of hacked voicemails.

Committee member Tom Watson said the Goodman letter raised 'very very serious' questions about Mr Coulson's denial that he was aware of hacking at the paper he edited.

'He was appealing his dismissal and he made allegations that the whole editorial team at News of the World were involved in discussions on phone hacking at the time. Andy Coulson was editor of the paper,' he said.

'The Goodman letter I genuinely think is devastating and shows that if it is accurate the whole foundation of the company defence, in all the evidence they gave to all the inquiries, was bogus, and so we need to bottom that out.

'Then we need to get to the facts of the payments to people who left the company either for gross negligence or because they went to jail, and was their silence bought?'

He said he thought there was a 'cover up', adding: 'I think we're dragging out the facts of this case, day by day, week by week.'

Mr Watson said he thought the Committee was 'genuinely shocked' by the amount Clive Goodman was paid.

'We have written to Andy Coulson to ask him whether he would like to amend his previous evidence.

'Clearly if Clive Goodman's account is accurate it shows the evidence he gave us was at best misleading and probably deceptive.'

LINKS TO ALL THE DOCUMENTS RELEASED BY THE COMMITTEE TODAY

Letter from Jonathan Chapman to Chairman - August 11
Letter from Chairman to NotW editor Colin Myler - July 29
Letter from Colin Myler to Chairman - August 10
Letter from Chairman to NotW lawyer Tom Crone - July 29
Letter from Tom Crone to Chairman - August 6
Letter from Chairman to law firm Harbottle and Lewis - July 29
Covering letter from Harbottle and Lewis to Chairman - August 11
Attachment from Harbottle and Lewis - August 11
Letter from former PCC chair Baroness Buscombe to Chairman - July 26
Letter from Milly Dowler's lawyer Mark Lewis to Chairman - August 11
Letter from legal advisor to News Corp John Turnbull to Committee - August 15
Letter from Chairman John Whittingdale to James Murdoch - July 2
Letter from James Murdoch to Chairman - August 11
Letter from James Murdoch to Chairman - August 11 (Part 1)
Letter from James Murdoch to Chairman - August 11 (Part 2)
Letter from James Murdoch to Chairman - August 11 (Part 3)
Letter from James Murdoch to Chairman - August 11 (Part 4)
Letter from James Murdoch to Chairman - August 1 (Part 5)
Letter from James Murdoch to Chairman -August 11 (Part 6)
Letter from Chairman to Rebekah Brooks - July 29
Letter from Rebekah Brooks to Chairman - August 8
Letter from Chairman to NotW lawyer Jonathan Chapman - July 29

David Cameron has been battling to protect his reputation because he employed Andy Coulson.
Spotlight: In light of the letter, MPs have written to Andy Coulson asking he would like to 'amend' his previous evidence



In January, Mr Cameron, who fought to keep Andy Coulson as his £140,000-a-year director of communications, protested – even as the resignation was announced – that Coulson was being ‘punished for the same offence twice’.

He insisted the affair had not raised questions about his own judgment ‘at all’ and added: ‘I judge him by the way he has worked in my office...he’s done an excellent, excellent job.’

Mr Cameron and Mr Osborne are understood to have spent 48 hours attempting to persuade Mr Coulson to stay on. But a source said: ‘He had just had enough. He had been thinking about this for a long time.’

In July, the Prime Minister refused to distance himself from Mr Coulson, calling him ‘a friend’ with whom he is still in touch.

Last month, David Cameron admitted that he had been mistaken in hiring Coulson and said any wrong doing would be punished.

'It was my decision, I take responsibility,' he told the Commons. 'With 20-20 hindsight and all that has followed, I would not have offered him (Mr Coulson) the job and I expect that he wouldn't have taken it.

'But you don't make decisions in hindsight, you make them in the present.

'You live and you learn and, believe you me, I have learnt.'

He continued: 'If it turns out Andy Coulson lied then he will not only have lied to me but to the police, to the select committee and the press complaints commission and perjured himself in a court of law.

'I have an old-fashioned view about innocent until proven guilty.'

Mr Cameron said that if Mr Coulson had lied about phone hacking at his time at the News of the World then he should face 'severe' criminal charges.

He added: 'If it turns out I have been lied to, that would be a moment for a profound apology, and in that event I can tell you I will not fall short.'

Today a Downing Street spokesman said: 'It would be inappropriate for us to comment - there is an ongoing police investigation and we have set up a judicial inquiry to establish the facts. The Prime Minister has made his thoughts on Andy Coulson clear.'

Meanwhile Labour leader Ed Miliband said the evidence submitted to the committee indicated Mr Cameron's judgment in employing Mr Coulson was 'catastrophic'.
Labour leader Ed Miliband today
Prime Minister David Cameron during his visit the Community Assistance Centre in Tottenham Green Leisure Centre today

Labour leader Ed Miliband pictured today in Bristol where he said the letter illustrated David Cameron (right) had shown catastrophic judgment in employing former News of the World editor Andy Coulson

He said: 'This evidence raises serious questions about the extent of the cover-up at News International and the judgment of David Cameron. It says phone hacking was widely discussed at the News of the World.

'The problem for Mr Cameron is that he was already warned by the article in the New York Times last year about the same behaviour that today's evidence claims went on at the News of the World when Andy Coulson was the editor. Yet he continued to employ Andy Coulson as his director of communications.

'The Prime Minister took no action and looked the other way amid these allegations that he had brought someone aware of criminal activity into 10 Downing Street.

'Every new bit of evidence shows how catastrophic his judgment was.'

Last month, George Osborne admitted he ‘regrets’ pushing for Andy Coulson to be made David Cameron’s media manager.

The Chancellor’s role in recommending Mr Coulson – who was arrested this month over the News of the World phone hacking scandal – left him fending off suggestions he had been ‘reckless’.

In an interview the chancellor said: 'I repeat the words of the Prime Minister, knowing what we know now we regret the decision and I suspect that Andy Coulson would not have taken the job.'

The committee also released a letter from Harbottle and Lewis rejecting claims by Mr Murdoch that News International was entitled to rely on a review the firm carried out to assert Mr Goodman had been the only reporter involved in phone-hacking.

The firm stressed that the review of emails had been a limited 'desktop exercise' which specifically related to Mr Goodman's claim for wrongful dismissal.

'There was absolutely no question of the firm being asked to provide News International with a clean bill of health which it could deploy years later in wholly different contexts for wholly different purposes,' it said.

'If the firm had initially been given a retainer as broad as instructions 'to find out what the hell was going on' or (to put it more formally) to undertake an investigation which News International could use for broader purposes, such as laying it before Parliament as independent support for the 'one rogue reporter' theory, the firm would have refused the instructions.'

Read more: http://www.dailymail.co.uk/news/article-2026604/News-World-phone-hacking-Clive-Goodman-s-letter-blows-whistle-Murdoch-s-NI.html#ixzz1VD9xAzWs

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Reuters
James Murdoch's perch gets shakier by the second

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

By Chris Hughes
LONDON, Aug 16 (Reuters Breakingviews) - The phone hacking scandal at News Corp burst back to life on Tuesday. New evidence emerged adding to claims that top executives were warned four years ago the illegal interception of voicemail messages went beyond one rogue reporter. James Murdoch, who returned to the company to run European and Asian operations in December 2007 after the matter appeared to have been resolved, continues to protest ignorance. But the sheer scale of what he didn't know raises fresh questions of how he handled the affair.
It wasn't until late 2010 that Murdoch acted on evidence that probes into hacking were insufficient. Fresh documents disclosed by British Parliament provide no smoking gun he knew the practice was more widespread at the now-defunct News of the World before then. Murdoch again rejected allegations by former managers that he was presented with such information in 2008 at a meeting to discuss an alleged victim's damages claim. Though it's still unclear what was said then, questions about Murdoch's conduct in signing off on the settlement and his response to later media allegations aren't going away.


Murdoch keeps saying how little he knew of the matter. He has now admitted that when he gave evidence to lawmakers last month, he was unaware the 700,000 pound ($1.15 million) settlement was so big partly because it included a confidentiality clause. This post-testimony qualifier is embarrassing.


Worse, a law firm involved in the affair is fighting back. Harbottle & Lewis is now giving lawmakers tips on tricky questions to ask, in particular as relates to the settlement. It has attacked assertions by James and his father, Rupert Murdoch, News Corp's chairman and chief executive, that they took comfort from a probe it conducted in 2007. That investigation focused on narrow charges in an unfair dismissal claim: it was far from a full phone hacking probe.
James may yet come through all this. But if he does, he will have been exposed as an executive who failed to ask tough questions and whose staff ran rings round him. Though James was once a presumed heir apparent by investors, Rupert just endorsed News Corp's chief operating officer as his under-the-bus replacement. The younger Murdoch also can expect a hard time if, as is now expected, he faces another grilling from lawmakers. His ability to be an effective boss at the media empire looks all the tougher.

CONTEXT NEWS
-- Senior executives at the UK arm of News Corporation were warned as long ago as 2007 that phone hacking at the now defunct News of the World went beyond one rogue reporter and was widely discussed at the newspaper, it emerged on Aug. 16.
-- The allegation is contained in a letter claiming unfair dismissal sent by Clive Goodman, the journalist given a custodial sentence four years ago for illegally intercepting phone messages. The document was posted on the British parliament's website along with a host of other evidence obtained by lawmakers probing the matter.
-- Shares in News Corp were up 1.42 percent in lunchtime trading in New York on Aug. 16.
-- Evidence submitted to UK Select Committee for Culture, Media and Sport: http://link.reuters.com/paf33s

((chris.hughes@thomsonreuters.com))
(Editing by Jeffrey Goldfarb and Emily Plucinak)
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