New York - Rupert Murdoch acknowledged for the first time
in public that his son James is not the preferred choice to succeed him as News
Corp CEO, at least in the near term.
In the clearest indication yet that the phone-hacking
scandal enveloping News Corp's UK operations has damaged the succession
ambitions of James Murdoch, his father endorsed top lieutenant Chase Carey for
the job.
"Chase is my partner and if anything happened to me I'm
sure he'll get it immediately - if I went under a bus," the elder Murdoch
said in response to a question from a Reuters reporter about succession on the
company's quarterly earnings call.
Although News Corp has often said that it has a succession
plan in place, the company has never explicitly stated who would ascend to the
CEO role should Murdoch step down.
In testimony before pParliament last month, Murdoch
reiterated his long-held desire to see one of his children succeed him. Until
recently, his youngest son James had been viewed as the likely successor
after he was promoted to deputy chief operating officer in March.
The younger Murdoch has been under pressure since the phone-hacking scandal, which erupted last month at News Corp's UK operations, forced
the closure of its News of the World tabloid and the arrest of 12 former staffers.
News Corp's UK business ultimately reported to the younger Murdoch.
James Murdoch has to submit a written statement to a
parliamentary committee by Thursday, responding to accusations that he
misrepresented statements in prior testimony.
But James Murdoch hasn't been completely exiled, however.
Murdoch added that he and Carey had "full confidence" in James,
leaving the door open for him to possibly become CEO in the future.
In the meantime, the elder Murdoch has no immediate plan to
step aside despite the phone-hacking scandal raising questions about his
leadership. "I hope the job won't be open in the near future,"
Murdoch joked. He added that he has the full support of News Corp's board.
Murdoch's comments came during a quarterly earnings call in which he was more lucid about the company's operations and more combative towards inquisitors than he was last month before parliament.
Profits up
Murdoch forcefully denied allegations that News Corp's board
was beholden to him rather than to shareholders, and sought to drive home the
notion that its independent directors were just that.
News Corp's board has been criticised in recent weeks for
being crammed with family members, corporate insiders and long-time associates
of Murdoch. It is often held up as prime example of weak corporate governance
by experts, especially since the phone-hacking scandal rocked the company.
According to Murdoch, however, "It's a very strong
board, very often very critical and we have a lot of free ranging
discussions."
Murdoch also beat back calls from analysts about selling or
spinning off the company's newspaper operations. In addition to newspapers such
as The Wall Street Journal, New York Post, and The Sun, News Corp also owns the
Fox broadcast network, a stable of cable channels, the 20th Century Fox film
studio and a host of other assets across the globe.
Though he struck a defiant tone, Murdoch once again expressed his regret about the phone-hacking revelations. He also said that he was disappointed that the scandal forced the company to drop its bid for full control of BskyB.
News Corp reported a profit from continuing operations of
$982m, up from $902m a year ago.
Its net income fell to $683m, or 26 cents a share, down from
$875m, or 33c/share, a year ago after recording a $254m loss on the
disposition of its troubled social networking Myspace.
The company said it expects its full-year operating income
to increase in fiscal year 2012 by "low to mid teens" percentage
points.
Revenue rose 11% to $8.96bn, helped by advertising sales and
fees at Fox TV and its cable networks.
Operating income at its cable network unit rose 12%, helped
by a 23% rise in advertising revenue at its domestic channels and a 30% rise in
affiliate fees at its international cable channels. Advertising at its Fox
broadcast business also rose by 7%.
Movie profits rose 53% thanks to animation hit Rio and home entertainment sales of Black Swan and The Chronicles of Narnia.
"They were pretty good numbers," said Collins
Stewart analyst Thomas Eagan.
Murdoch said the company would consider expanding its $5bn
share buyback if the stock continues to be undervalued.