"Rupert Murdoch: 'There are billions and billions of dollars, and if Britain didn't want 'em, there are plenty of good places to put them here [in the US].'"
Rupert Murdoch to invest more in America. (photo: The Age)
29 June 12
One company that Rupert Murdoch is eyeing is the Los Angeles Times. - SMG/RSN
upert Murdoch appears to have turned his back on Britain following his humiliation over the phone-hacking scandal.
In an interview with the Fox Business channel on Thursday following New Corporation's confirmation that it was splitting into two companies, entertainment and publishing, Murdoch said he would be "a lot more reluctant" to invest in Britain now, compared to the US.
The News Corp chairman and chief executive also told Fox Business host Neil Cavuto it was "highly unlikely" that his eldest son, Lachlan Murdoch, would run the new newspaper, book publishing and education company.
Once Britain's most powerful media figure, Murdoch has seen his bid for broadcaster BSkyB blocked and his reputation dragged through the mud following the phone-hacking revelations. Last month a parliamentary committee said he was not a fit and proper person to run a major corporation.
Now he looks set to retaliate by taking his money elsewhere. Asked about his future plans following his decision to split his News Corp empire in two, Murdoch made clear the UK was not his first priority and said the company's thinking had "moved on" since it abandoned its Sky bid last summer at the height of the phone-hacking scandal.
"There are billions and billions of dollars, and if Britain didn't want 'em, there are plenty of good places to put them here [in the US]. I'm much more bullish about America than I am about England," he added. "I would be a lot more reluctant to invest in new things in Britain today, rather than here."
Asked by Cavuto whether this was because of what he went through, Murdoch replied: "No, not at all, just the English."
The News Corp boss also scotched rumours that Lachlan might return to the family firm and run the newly separated publishing business, saying: "I think that's highly unlikely." He added: "Lachlan is very happy running his own business in Australia – and he loves living there."
In response to a question about the prospects for the new publishing company, Murdoch said: "In the present climate of thinking in the markets, it'll carry a lower p/e ratio, certainly. But the other one [film and TV company] I think will get a lot higher. Net, net, net the shareholders who are here today will be a lot better off."
Murdoch said that Europe was in for a "very long, tough haul" and that business prospects in the US were far more rosy. That said the media mogul was worried about Thursday's decision by the US Supreme Court to uphold president Barack Obama's landmark healthcare legislation.
"I worry about this entitlement culture," said Murdoch. "We've seen where it's taken Greece. We've seen where it's taken France and Spain today. So, on a political level, I worry about it."/p>
Ken Doctor, media analyst at Outsell, said the split presaged Murdoch's exit from the UK. "It's a recognition of his waning influence in the UK and the consolidation of his business in the US. If he was 60, I would bet on him making a UK comeback but he's not and I can't see him achieving that in his lifetime."
He said that he expected the UK papers would eventually be sold or put into a trust. "Those newspapers and his influence in the UK have grown hand in hand. That's over now," added Doctor.
Julie Tanner, a director at Christian Brothers Investment Services, which led a shareholder revolt against Murdoch and his board last year, said investors were keen to hear who would be appointed to head the new companies.
Tanner added that she would continue with plans to press for a new independent chairman at News Corp. "News Corp must consult with a broad and varied range of shareholders to ensure there are strong corporate governance guidelines established and oversight and monitoring mechanisms in place to assure the highest levels of integrity," she said.
Rich Greenfield, analyst at BTIG, dismissed concerns about Murdoch's control. "If you don't like Rupert, there are plenty of other media companies you can buy," he said.
