At first sight, there may not seem much connection between AOL’s recent dismissal of Michael Arrington, founder of TechCrunch, and a spectacular scam at the Wall Street Journal, which this week brought down its European publisher Andrew Langhoff.
Don’t be deceived. There is every connection. Not in detail, but in principle. Both executives were fired because they had prostituted editorial integrity.
It’s fairly evident that neither deliberately set out to do so. Rather, they were attempting to apply imaginative (and increasingly desperate) commercial solutions to a problem endemic in the news information business. Namely, the pernicious effect of the internet – the ‘free news’ junkies’ hourly fix – on traditional advertising revenue.
Arrington had to go because his cavalier attitude to conflict of interest put him on a collision course with Arianna Huffington, editor-in-chief at AOL – who was rightly concerned about the impact of his heretical gospel on the rest of AOL’s news assets (chiefly the Huffington Post).
Although TechCrunch, which AOL acquired for $30m last year, is a respected news source, as a free blog it was badly underfunded by the low-yield advertising which was the only traditional alternative to subscription revenue. Arrington’s solution was to set up CrunchFund, a venture capitalist fund specialising in new technology companies. Which aspiring tech company would not trade exclusive stories with TechCrunch in the hope of coming into contact with untold Wall Street riches? Investors, on the other hand, soon came to recognise TechCrunch for what it was: an invaluable source of investment-grade information.
The problem was what happened next. Should TechCrunch journalists, to all outward appearances acting without fear or favour, be obliged to soft-pedal any clients who signed up to Arrington’s fund? The new funding paradigm soon became a very old-fashioned conflict of interest.
The WSJ/Langhoff affair also breached journalistic ethics, but in a rather different way. Officially, Langhoff was fired because he had signed a deal with Dutch consulting firm Executive Learning Partnership which resulted in a series of special reports considered in breach of the WSJ’s ‘unimpeachable’ standards of editorial integrity. In fact, this was only the half of it, according to The Guardian. Apart from trading too much prominence and name-checking, Langhoff also seems to have struck an interesting side-deal with ELP’s sponsorship money (ie, advertising revenue). ELP was to channel money (including, at a later stage, some of the WSJ’s own money) into buying a large number of heavily discounted copies of the European edition of – the WSJ. This action is not illegal nor, strictly speaking, does it break the Audit Bureau of Circulations’ rules (Why not? we should ask indignantly). But it is designed to deceive. Inflated ABC figures give advertisers the impression that the WSJ is a stronger media vehicle than it actually is, which helps to harden rates.
While denying some of The Guardian’s more “malign interpretations”, News Corp – which owns the WSJ through Dow Jones – has nevertheless conceded that Langhoff had to go because he had allowed WSJ to enter into “a broad business agreement” which could “give the impression that news coverage can be influenced by commercial relationships.”
If respected operators like WSJ and TechCrunch are getting up to such tricks, where does the rot stop? The answer may not be very comforting for the integrity of news values in general.
Stuart Smith
go to stuartsmithsblog
http://stuartsmithsblog.com/
Saturday 15 October 2011
Friday 14 October 2011
WSJ confirms side deals in paid circulation boost at Journal’s Europe edition
The Wall Street Journal
The Wall Street Journal follows the Guardian’s story about a circulation scheme at the Journal’s sister paper in Europe with its own story confirming many of the details first reported by its competitor. The Guardian’s Nick Davies wrote that the Wall Street Journal Europe “had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate.” The Journal describes an “alleged deal to boost the reported circulation numbers of The Wall Street Journal Europe, in which the paper sold bulk copies to a consulting firm and simultaneously directed money to the firm for separate services.”
Side deals
A Dutch company called Executive Learning Partnership agreed to buy heavily discounted newspapers as part of a sponsorship arrangement with The Wall Street Journal Europe. In addition to the sponsorship, the Journal in Europe also set up a variety of “side deals” with ELP when the company said it was unhappy about the arrangement, the Journal reports.
The Journal quotes ELP partner Nick Van Heck, who says that the company did provide services in exchange for the payments from the Europe Journal. The Guardian reported on the side deals as well, but reported that when ELP threatened to end its sponsorship — which would cause circulation to drop — that Wall Street Journal Europe publisher Andrew Langhoff “set up a complex scheme to channel money to ELP to pay for the papers it had agreed to buy – effectively buying the papers with the Journal’s own cash.”
The Journal confirms the Guardian’s reporting that the Europe Journal routed the money to ELP through other companies:
Mr. Van Heck said the billing arrangement was unusual. ELP was asked to “send invoices to different organizations and not to The Wall Street Journal Europe,” which he found surprising.
Dow Jones said Wednesday that “the manner in which they [ELP] were paid was admittedly complex but nevertheless legitimate.” But the Journal quotes someone at one of the pass-through companies as saying, “I also received from The Wall Street Journal assurances that this would not be made public.”
While Dow Jones has said that it terminated the relationship with ELP because it was uncomfortable with the appearance of impropriety, ELP says it’s the one that ended the relationship.
Special coverage
While the Guardian reported, based on documents it has reviewed, that The Wall Street Journal Europe also agreed to provide “a minimum of three special reports” featuring ELP, the Journal story describes it as a “pledge of possible editorial coverage.” The Journal quotes an ELP statement stating that the company was never promised editorial coverage and that publisher Langhoff emphasized editorial integrity.
The Journal reported earlier that Langhoff had “personally pressured” reporters for stories about ELP; the Europe Journal published two stories featuring the company. Langhoff resigned Tuesday, for what Dow Jones described as a “perceived breach of editorial integrity.”
Counting discounted copies
The Journal notes that providing free or discounted copies of newspapers and magazines is not new. Last fall, the U.S. Audit Bureau of Circulation started to count heavily discounted copies sold to sponsors as “verified” rather than “paid.” “But the ABC in the U.K. continues to classify bulk sales as paid circulation; for The Wall Street Journal Europe, such deals account for a little over 46,000 of its 74,800 average circulation per issue.”
Whistleblower
In rebutting the Guardian’s story, Dow Jones said in a statement to Poynter, “The Guardian mischaracterizes a former employee as a ‘whistleblower.’ In fact, that employee was first investigated by the company because of concerns around his business dealings.”
The Journal reports that the side deals with ELP were negotiated with Langhoff, The Wall Street Journal Europe publisher who resigned Tuesday, and a circulation employee named Gert Van Mol. Van Mol told the Journal that Dow Jones only started to investigate him after he complained about Langhoff’s dealings and the ELP relationship.
The Journal reports that the internal investigation “didn’t identify the problems with the editorial component of the ELP deal that led to Mr. Langhoff’s resignation. … Those problems only came to light last week, months after Mr. Van Mol began emailing complaints to Dow Jones executives. That’s when the paper re-examined the situation.”
The Journal doesn’t explain how the issue came to light; the Guardian reports that its inquiries led to Langhoff’s resignation.
Reaction
Crisis management: “News Corp. is still keeping true to its strategy of covering up anything embarrassing until Nick Davies uncovers it, at which point an executive or two is thrown under the bus,” writes Felix Salmon. “As a result, the rest of the world is simply going to assume the worst — that anything rumored or imagined is probably true and has just been successfully covered up for the time being.” (Reuters)
Part of the business: Jack Shafer notes that the stories in question appeared in a special section, and that many newspapers publish themed sections filled with “soft or backgrounderish copy … So great is the publisher’s appetite for special sections that if The New York Times could persuade Eukanuba, Purina, and Hartz Ultraguard Plus Rid Worm tablets to take out gigantic ads, it would gladly print a ‘Your Dog’s Retirement’ section.” (Reuters)
PR coup: Ryan Chittum looks through archives and can’t find any instance of ELP being cited in a news story besides the two in The Wall Street Journal Europe. (Columbia Journalism Review)
Poynter. by Steve Myers
The Wall Street Journal follows the Guardian’s story about a circulation scheme at the Journal’s sister paper in Europe with its own story confirming many of the details first reported by its competitor. The Guardian’s Nick Davies wrote that the Wall Street Journal Europe “had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate.” The Journal describes an “alleged deal to boost the reported circulation numbers of The Wall Street Journal Europe, in which the paper sold bulk copies to a consulting firm and simultaneously directed money to the firm for separate services.”
Side deals
A Dutch company called Executive Learning Partnership agreed to buy heavily discounted newspapers as part of a sponsorship arrangement with The Wall Street Journal Europe. In addition to the sponsorship, the Journal in Europe also set up a variety of “side deals” with ELP when the company said it was unhappy about the arrangement, the Journal reports.
The Journal quotes ELP partner Nick Van Heck, who says that the company did provide services in exchange for the payments from the Europe Journal. The Guardian reported on the side deals as well, but reported that when ELP threatened to end its sponsorship — which would cause circulation to drop — that Wall Street Journal Europe publisher Andrew Langhoff “set up a complex scheme to channel money to ELP to pay for the papers it had agreed to buy – effectively buying the papers with the Journal’s own cash.”
The Journal confirms the Guardian’s reporting that the Europe Journal routed the money to ELP through other companies:
Mr. Van Heck said the billing arrangement was unusual. ELP was asked to “send invoices to different organizations and not to The Wall Street Journal Europe,” which he found surprising.
Dow Jones said Wednesday that “the manner in which they [ELP] were paid was admittedly complex but nevertheless legitimate.” But the Journal quotes someone at one of the pass-through companies as saying, “I also received from The Wall Street Journal assurances that this would not be made public.”
While Dow Jones has said that it terminated the relationship with ELP because it was uncomfortable with the appearance of impropriety, ELP says it’s the one that ended the relationship.
Special coverage
While the Guardian reported, based on documents it has reviewed, that The Wall Street Journal Europe also agreed to provide “a minimum of three special reports” featuring ELP, the Journal story describes it as a “pledge of possible editorial coverage.” The Journal quotes an ELP statement stating that the company was never promised editorial coverage and that publisher Langhoff emphasized editorial integrity.
The Journal reported earlier that Langhoff had “personally pressured” reporters for stories about ELP; the Europe Journal published two stories featuring the company. Langhoff resigned Tuesday, for what Dow Jones described as a “perceived breach of editorial integrity.”
Counting discounted copies
The Journal notes that providing free or discounted copies of newspapers and magazines is not new. Last fall, the U.S. Audit Bureau of Circulation started to count heavily discounted copies sold to sponsors as “verified” rather than “paid.” “But the ABC in the U.K. continues to classify bulk sales as paid circulation; for The Wall Street Journal Europe, such deals account for a little over 46,000 of its 74,800 average circulation per issue.”
Whistleblower
In rebutting the Guardian’s story, Dow Jones said in a statement to Poynter, “The Guardian mischaracterizes a former employee as a ‘whistleblower.’ In fact, that employee was first investigated by the company because of concerns around his business dealings.”
The Journal reports that the side deals with ELP were negotiated with Langhoff, The Wall Street Journal Europe publisher who resigned Tuesday, and a circulation employee named Gert Van Mol. Van Mol told the Journal that Dow Jones only started to investigate him after he complained about Langhoff’s dealings and the ELP relationship.
The Journal reports that the internal investigation “didn’t identify the problems with the editorial component of the ELP deal that led to Mr. Langhoff’s resignation. … Those problems only came to light last week, months after Mr. Van Mol began emailing complaints to Dow Jones executives. That’s when the paper re-examined the situation.”
The Journal doesn’t explain how the issue came to light; the Guardian reports that its inquiries led to Langhoff’s resignation.
Reaction
Crisis management: “News Corp. is still keeping true to its strategy of covering up anything embarrassing until Nick Davies uncovers it, at which point an executive or two is thrown under the bus,” writes Felix Salmon. “As a result, the rest of the world is simply going to assume the worst — that anything rumored or imagined is probably true and has just been successfully covered up for the time being.” (Reuters)
Part of the business: Jack Shafer notes that the stories in question appeared in a special section, and that many newspapers publish themed sections filled with “soft or backgrounderish copy … So great is the publisher’s appetite for special sections that if The New York Times could persuade Eukanuba, Purina, and Hartz Ultraguard Plus Rid Worm tablets to take out gigantic ads, it would gladly print a ‘Your Dog’s Retirement’ section.” (Reuters)
PR coup: Ryan Chittum looks through archives and can’t find any instance of ELP being cited in a news story besides the two in The Wall Street Journal Europe. (Columbia Journalism Review)
Poynter. by Steve Myers
WSJ Europe disputes circulation scam report
(Reuters) - The publisher of the Wall Street Journal Europe was forced to resign over a scam used by the paper to boost its circulation, the Guardian reported, citing documents and e-mails it said it had obtained.The Journal responded by saying the report on Wednesday was "replete with untruths and malign interpretations".
WSJ Europe parent Dow Jones had said the previous day that Andrew Langhoff had quit over ethical issues raised by the paper's commercial relationship with Dutch consulting firm Executive Learning Partnership (ELP).
It did not disclose the nature of the relationship.
Rupert Murdoch's News Corp, parent of Dow Jones, has been fighting accusations of ethical missteps related to phone hacking at its now defunct News of the World newspaper in London.
Much of the reporting on the phone-hacking scandal has been led by the Guardian.
On Wednesday, it reported that the WSJ Europe had been channelling money through European companies to secretly buy thousands of copies of its own paper for as little as 5 cents per copy.
This had the effect of inflating its circulation and misleading advertisers about the Journal's true circulation, the Guardian said.
Both the Guardian and WSJ Europe said the UK Audit Bureau of Circulation had signed off on the program.
The partnership also involved a contract in which the Journal promised to publish articles that promoted ELP's activities, the Guardian said.
"The Guardian's inflammatory characterization of WSJE's former ELP circulation program is replete with untruths and malign interpretations," the Journal said in an e-mailed statement. "Andrew Langhoff resigned because of a perceived breach of editorial integrity, not because of circulation programs, whose copies were certified by the ABC UK."
The Guardian said that a former employee, who was not identified, was a whistleblower who helped to reveal the circulation-boosting effort. The whistleblower's position was made redundant in January after he raised concerns about the circulation circulation-boosting effort, the Guardian said.
"In fact, that employee was first investigated by the company because of concerns around his business dealings," the Journal said in its statement.
"REPORTERS PRESSURED"
The Guardian said former Dow Jones Chief Executive Les Hinton, a close ally of Murdoch, had been aware of the circulation effort. A Dow Jones spokeswoman declined to comment on Hinton's involvement.
In an article on its website on Tuesday, the Journal said an internal investigation had found that Langhoff had personally pressured two reporters into writing articles featuring ELP.
The agreement between the paper's circulation department and the Dutch firm, now expired, was not disclosed to readers of the articles, the Journal said in a note attached to the articles on its website.
ELP did not respond to e-mailed requests for comment.
"There is -- and should be -- an inviolable boundary between our commercial relationships and the content we produce," Langhoff said in an internal memo on Tuesday.
"The perception that this boundary was crossed via a broad agreement between the WSJE Circulation department and a company called Executive Learning Partnership has been of great concern to me," he said.
The phone-hacking allegations, which have led to a number of arrests, have prompted critics to demand the resignation of Murdoch and other executives, including his son James.
News Corp has fiercely defended Murdoch and other directors saying it "vehemently disagrees" with critics of the company's practices.
Dow Jones competes with Thomson Reuters Corp.
(Reporting by Yinka Adegoke and Jennifer Saba; Editing by Ted Kerr)
Thursday 13 October 2011
The Wall Street Journal Europe's Circulation Scandal
When I first saw this story, about how the Wall Street Journal Europe had been “massaging” its circulation figures I thought it was all more of the same, a storm in a tea cup. For various papers are always sniping at various other papers about their audited circulation figures. To understand why you need to understand something about the economics of the whole newsprint (ie, newspapers and magazines) game.
The cover price is pretty much irrelevant to the main economics of the whole business. It, roughly you understand, the revenue from that cover price, pays for the paper, the printing and the distribution of the pieces of paper. The newsboy delivering it to your house, the trucks that get it to the newstand, the margins the newstand makes on selling it to you.
The actual journalism inside, the writing, is paid for by the advertising that the magazine or paper is running. In fact, to understand the money flows of the business it’s best to think of the journalism as the stuff that’s just there to get you to look at the ads. Good journalism brings more people to see more ads, that’s all.
In this business, how much you can charge for an ad depends upon what your circulation is and there are various different companies that measure this in different countries. There are also grey areas out there. What actually counts as paid circulation?
For example, if a student gets a subsidised subscription (as The Times used to offer) is this the same as a full price subscription for ad purposes? Or how about the Daily Mail which used to have a deal with British Airways, every passenger got a copy of the paper? Or a copy of USA Today if you’re a guest of certain hotel chains?
You can see that at the margins there can be some discussion: what actually counts as a “sale” and thus what counts in the circulation numbers and thus influences the prices the paper can charge for ads?
As I say, when I first saw this story in The Guardian I thought it was just this sort of backbiting. One of those irregular verbs perhaps: We offer deals to subscribers, you enhance your circulation, they lie about the numbers.
So I’m indebted to Felix Salmon for pointing out the truth at the heart of the matter:
“But this is really bad: the WSJ Europe was telling its advertisers that it had a circulation of 75,000 — but in fact fully 31,000 of those copies were bought for as little as 1 cent apiece by companies which never saw them, and pawned them off onto random students."
Ah, no, that is very different. It also helps to explain something I found a little odd a couple of months back when I did a piece for them. Compared to the UK papers their pay, for opinion pieces that is, isn’t all that high. We came to an entirely satisfactory agreement which is just fine, but this story about their circulation helps explain why they tend to offer a little less than papers that are selling a million copies or more.
Tim Worstall, Contributor, Forbes
The cover price is pretty much irrelevant to the main economics of the whole business. It, roughly you understand, the revenue from that cover price, pays for the paper, the printing and the distribution of the pieces of paper. The newsboy delivering it to your house, the trucks that get it to the newstand, the margins the newstand makes on selling it to you.
The actual journalism inside, the writing, is paid for by the advertising that the magazine or paper is running. In fact, to understand the money flows of the business it’s best to think of the journalism as the stuff that’s just there to get you to look at the ads. Good journalism brings more people to see more ads, that’s all.
In this business, how much you can charge for an ad depends upon what your circulation is and there are various different companies that measure this in different countries. There are also grey areas out there. What actually counts as paid circulation?
For example, if a student gets a subsidised subscription (as The Times used to offer) is this the same as a full price subscription for ad purposes? Or how about the Daily Mail which used to have a deal with British Airways, every passenger got a copy of the paper? Or a copy of USA Today if you’re a guest of certain hotel chains?
You can see that at the margins there can be some discussion: what actually counts as a “sale” and thus what counts in the circulation numbers and thus influences the prices the paper can charge for ads?
As I say, when I first saw this story in The Guardian I thought it was just this sort of backbiting. One of those irregular verbs perhaps: We offer deals to subscribers, you enhance your circulation, they lie about the numbers.
So I’m indebted to Felix Salmon for pointing out the truth at the heart of the matter:
“But this is really bad: the WSJ Europe was telling its advertisers that it had a circulation of 75,000 — but in fact fully 31,000 of those copies were bought for as little as 1 cent apiece by companies which never saw them, and pawned them off onto random students."
Ah, no, that is very different. It also helps to explain something I found a little odd a couple of months back when I did a piece for them. Compared to the UK papers their pay, for opinion pieces that is, isn’t all that high. We came to an entirely satisfactory agreement which is just fine, but this story about their circulation helps explain why they tend to offer a little less than papers that are selling a million copies or more.
Tim Worstall, Contributor, Forbes
Tuesday 11 October 2011
Andrew Langhoff - Publisher of WSJ Europe Resigns After Ethics Inquiry
LONDON—Dow Jones & Co.'s top European executive resigned Tuesday following an internal investigation into two articles published in The Wall Street Journal Europe that featured a company with a contractual link to the paper's circulation department.
Andrew Langhoff, managing director of Dow Jones & Co. in Europe, Africa and the Middle East, and publisher of The Wall Street Journal Europe, stepped down after an internal probe showed two articles in the paper's Special Reports section had been prompted by an agreement the circulation department struck with Executive Learning Partnership, or ELP, a Netherlands-based consulting firm.
"That relationship, overseen by a now-former employee, is no longer in place," Mr. Langhoff said in an internal email to employees. "Because the agreement could leave the impression that news coverage can be influenced by commercial relationships, as publisher with executive oversight, I believe that my resignation is now the most honorable course," Mr. Langhoff said.
The Wall Street Journal Europe has appended disclaimers to two articles featuring ELP that ran in the paper's Special Reports section on Oct. 14, 2010, and Mar. 14, 2011. The disclaimer says the "impetus" for the stories was an agreement between The Wall Street Journal Europe's circulation department and ELP. It says "the reporting and writing were solely the responsibility of the News Department" and were not subject to review by the paper's circulation department or the firm. "However, any action that creates an impression that news coverage can be influenced by commercial interests is a breach of the ethical standards of Dow Jones & Co.," the disclaimer says.
"I always understood that editorial had complete discretion and independence in writing these two articles," Mr. Langhoff said when asked to comment.
Between May 2009 and April 2011, ELP was a lead sponsor of the "Future Leadership Institute," an initiative of The Wall Street Journal Europe's circulation department, Nick Van Heck, a partner at ELP, said in an interview Tuesday.
Both Mr. Van Heck and a spokeswoman for Dow Jones & Co. declined to comment on the specifics of the contract. According to a person familiar with the matter, the agreement was a bulk-circulation deal in which discounted papers were sold to ELP for distribution to students and others, boosting the Journal's circulation in Europe.
People familiar with the matter said the contract included language suggesting ELP could receive some coverage in the pages of The Wall Street Journal Europe. A paragraph in the agreement gave the paper's news department final control over any article, including the possibility that no story at all would appear, one of the people said.
"It was made very clear to us that the editorial freedom, or the editorial independence, was not being infringed by this," Mr. Van Heck said. He said if executives from ELP were interviewed or included in the paper, that was the editorial staff's choice. Mr. Van Heck says ELP terminated the relationship earlier this year.
Still, last fall, Mr. Langhoff personally, and through people who worked with him, pressed for an article featuring ELP to fulfill the contractual obligation, people familiar with the matter said. A Special Reports reporter alerted the paper's then-editor, Patience Wheatcroft, who people familiar with the matter say reviewed the contractual language about editorial control. The article went forward and was published.
Ms. Wheatcroft left The Wall Street Journal Europe in late 2010 to join the U.K. House of Lords. She declined to commentTuesday.
The following spring, Mr. Langhoff and others pressed for ELP to again be featured in an article, according to people familiar with the matter. The reporter didn't flag the assignment because he believed the practice was established policy, people familiar with the matter said.
The Wall Street Journal Europe has a circulation of about 73,250. The paper runs themed Special Reports regularly.
New York-based News Corp. has been reeling from a scandal at News of the World, its now-closed British tabloid that intercepted voice-mail messages in pursuit of scoops and allegedly paid bribes to police.
Dow Jones said it will begin a search for Mr. Langhoff's successor. Kelly Leach, senior vice president and head of strategy for the company, will oversee Europe, the Middle East and Africa in the interim.
"Andrew has played a number of important roles at Dow Jones since 2003 and has been instrumental in successfully growing our businesses in Europe over the past several years," Todd Larsen, president of Dow Jones, said in a statement. Mr. Larsen said Mr. Langhoff built a strong team and left the paper with strong momentum in Europe.
Andrew Langhoff, managing director of Dow Jones & Co. in Europe, Africa and the Middle East, and publisher of The Wall Street Journal Europe, stepped down after an internal probe showed two articles in the paper's Special Reports section had been prompted by an agreement the circulation department struck with Executive Learning Partnership, or ELP, a Netherlands-based consulting firm.
"That relationship, overseen by a now-former employee, is no longer in place," Mr. Langhoff said in an internal email to employees. "Because the agreement could leave the impression that news coverage can be influenced by commercial relationships, as publisher with executive oversight, I believe that my resignation is now the most honorable course," Mr. Langhoff said.
Dow Jones is a unit of News Corp., which owns all editions of The Wall Street Journal.
According to people familiar with the matter, an internal investigation at Dow Jones showed that Mr. Langhoff personally pressured two reporters into writing articles featuring ELP. The Wall Street Journal Europe has appended disclaimers to two articles featuring ELP that ran in the paper's Special Reports section on Oct. 14, 2010, and Mar. 14, 2011. The disclaimer says the "impetus" for the stories was an agreement between The Wall Street Journal Europe's circulation department and ELP. It says "the reporting and writing were solely the responsibility of the News Department" and were not subject to review by the paper's circulation department or the firm. "However, any action that creates an impression that news coverage can be influenced by commercial interests is a breach of the ethical standards of Dow Jones & Co.," the disclaimer says.
"I always understood that editorial had complete discretion and independence in writing these two articles," Mr. Langhoff said when asked to comment.
Between May 2009 and April 2011, ELP was a lead sponsor of the "Future Leadership Institute," an initiative of The Wall Street Journal Europe's circulation department, Nick Van Heck, a partner at ELP, said in an interview Tuesday.
Both Mr. Van Heck and a spokeswoman for Dow Jones & Co. declined to comment on the specifics of the contract. According to a person familiar with the matter, the agreement was a bulk-circulation deal in which discounted papers were sold to ELP for distribution to students and others, boosting the Journal's circulation in Europe.
People familiar with the matter said the contract included language suggesting ELP could receive some coverage in the pages of The Wall Street Journal Europe. A paragraph in the agreement gave the paper's news department final control over any article, including the possibility that no story at all would appear, one of the people said.
"It was made very clear to us that the editorial freedom, or the editorial independence, was not being infringed by this," Mr. Van Heck said. He said if executives from ELP were interviewed or included in the paper, that was the editorial staff's choice. Mr. Van Heck says ELP terminated the relationship earlier this year.
Still, last fall, Mr. Langhoff personally, and through people who worked with him, pressed for an article featuring ELP to fulfill the contractual obligation, people familiar with the matter said. A Special Reports reporter alerted the paper's then-editor, Patience Wheatcroft, who people familiar with the matter say reviewed the contractual language about editorial control. The article went forward and was published.
Ms. Wheatcroft left The Wall Street Journal Europe in late 2010 to join the U.K. House of Lords. She declined to commentTuesday.
The following spring, Mr. Langhoff and others pressed for ELP to again be featured in an article, according to people familiar with the matter. The reporter didn't flag the assignment because he believed the practice was established policy, people familiar with the matter said.
The issue came to light after a former Dow Jones circulation employee in Europe lodged complaints about Mr. Langhoff and the ELP contract, people familiar with the matter said. An internal investigation was launched, leading top editors in New York to discover the editorial component of the deal and the two stories produced, according to the people familiar with the situation.
The Wall Street Journal Europe has a circulation of about 73,250. The paper runs themed Special Reports regularly.
New York-based News Corp. has been reeling from a scandal at News of the World, its now-closed British tabloid that intercepted voice-mail messages in pursuit of scoops and allegedly paid bribes to police.
Mr. Langhoff is the second top Dow Jones executive to depart in recent months. Les Hinton, chief executive of Dow Jones and before that executive chairman of News Corp.'s U.K. newspaper unit, resigned in July amid the backlash over the voice-mail hacking scandal at a now-closed tabloid. Mr. Hinton said he didn't know about the phone hacking but resigned because it occurred on his watch. Mr. Hinton is scheduled to appear before a parliamentary committee via video link Oct. 24.
Dow Jones said it will begin a search for Mr. Langhoff's successor. Kelly Leach, senior vice president and head of strategy for the company, will oversee Europe, the Middle East and Africa in the interim.
"Andrew has played a number of important roles at Dow Jones since 2003 and has been instrumental in successfully growing our businesses in Europe over the past several years," Todd Larsen, president of Dow Jones, said in a statement. Mr. Larsen said Mr. Langhoff built a strong team and left the paper with strong momentum in Europe.
The Wall Street Journal, by Paul Sonne at paul.sonne@wsj.com and Bruce Orwall at bruce.orwall@wsj.com
Publisher of Wall Street Journal Europe Andrew Langhoff steps down after 3 years in post
Wall Street Journal Europe publisher resigns
Dow Jones & Co. said Tuesday its top Europe executive has resigned, after a commercial deal between The Wall Street Journal Europe and another company raised questions about the paper's editorial standards
Dow Jones, which owns the newspaper, said that its publisher, Andrew Langhoff, chose to step down because "Dow Jones has zero tolerance for even the appearance of a breach of ethical standards."
Langhoff, who had held the post for three years, was also managing director of Dow Jones in Europe, Africa and the Middle East.
The firm said the resignation followed a business agreement between the circulation department of The Wall Street Journal Europe and a Netherlands-based consultancy called Executive Learning Partnership.
The deal "could give the impression that news coverage can be influenced by commercial relationships," Dow Jones said in a statement.
The paper no longer has a relationship with the consultancy, and it will print a "reader clarification" on two of the paper's articles related to the deal, Dow Jones said. The contents of the articles, which appeared in the paper's Special Reports section, were not immediately clear.
In an internal memo, Langhoff told his colleagues that he was greatly concerned that the deal gave the impression that a boundary between editorial content and the paper's commercial ties had been crossed.
Dow Jones is a subsidiary of Rupert Murdoch's media conglomerate News Corp., which has been mired in a phone-hacking scandal involving its British newspapers.
Dow Jones said it will begin searching for a successor for Langhoff, and that senior vice president and head of strategy Kelly Leach will oversee European operations in the meantime.
By SYLVIA HUI | Associated Press
Dow Jones & Co. said Tuesday its top Europe executive has resigned, after a commercial deal between The Wall Street Journal Europe and another company raised questions about the paper's editorial standards
Dow Jones, which owns the newspaper, said that its publisher, Andrew Langhoff, chose to step down because "Dow Jones has zero tolerance for even the appearance of a breach of ethical standards."
Langhoff, who had held the post for three years, was also managing director of Dow Jones in Europe, Africa and the Middle East.
The firm said the resignation followed a business agreement between the circulation department of The Wall Street Journal Europe and a Netherlands-based consultancy called Executive Learning Partnership.
The deal "could give the impression that news coverage can be influenced by commercial relationships," Dow Jones said in a statement.
The paper no longer has a relationship with the consultancy, and it will print a "reader clarification" on two of the paper's articles related to the deal, Dow Jones said. The contents of the articles, which appeared in the paper's Special Reports section, were not immediately clear.
In an internal memo, Langhoff told his colleagues that he was greatly concerned that the deal gave the impression that a boundary between editorial content and the paper's commercial ties had been crossed.
Dow Jones is a subsidiary of Rupert Murdoch's media conglomerate News Corp., which has been mired in a phone-hacking scandal involving its British newspapers.
Dow Jones said it will begin searching for a successor for Langhoff, and that senior vice president and head of strategy Kelly Leach will oversee European operations in the meantime.
By SYLVIA HUI | Associated Press
Murdoch man quits in ethics row
Senior Wall Street Journal executive accuses paper of blurring lines between news and advertising
The Wall Street Journal Europe – owned by Rupert Murdoch's News Corporation – was mired in controversy yesterday as its publisher quit over fears the newspaper had "crossed the boundary" between editorial content and advertising.
Andrew Langhoff sent a memo to colleagues at Dow Jones – which produces The Wall Street Journal – saying: "I wanted to let you know myself that I have decided to resign." He added that it was "the most honourable course". The move comes at a time when the "culture, practices and ethics of the press" in the UK and of News Corporation have come under close scrutiny by Lord Justice Leveson.
Mr Langhoff said: "There is – and should be – an inviolable boundary between our commercial relationships and the content we produce.
"The perception that this boundary was crossed via a broad agreement between The Wall Street Journal Europe's circulation department and a company called Executive Learning Partnership has been of great concern to me."
The newspaper said no longer has a deal with Executive Learning Partnership and the employee who had overseen the account is no longer with the company. But Mr Langhoff said: "Because the agreement could leave the impression that news coverage can be influenced by commercial relationships...I believe that my resignation is now the most honourable course."
Dow Jones confirmed his departure but declined to confirm why. Todd Larsen, Dow Jones president, said Mr Langhoff had been "instrumental in successfully growing our business in Europe." Mr Langhoff had intended to stay in his role until the end of the year. He told colleagues: "While my time with you will thus be somewhat foreshortened, I have every confidence that you will accomplish all that we had set out to do and more.
"I have great regard for The Wall Street Journal Europe and the people who work here. You represent the highest standards of excellence, journalism and ethics."
In 2008 Mr Langhoff was appointed to head Dow Jones' consumer business in Europe, the Middle East and Africa, as well as to oversee The Wall Street Journal Europe after his previous role as US publisher of another part of Dow Jones, the Ottaway Newspaper Group. Dow Jones was bought by News Corp for £3.2bn in 2007.
Lord Leveson's inquiry, announced by Prime Minister David Cameron in July, has the remit to particularly scrutinise another part of News Corporation's business. It will focus on the improper conduct within its European arm News International, especially the News of the World, which was subsequently shut down.
Sir Harold Evans, the former editor of The Sunday Times, resigned a year after Mr Murdoch bought the newspapers in 1981 complaining about editorial independence.
He wrote earlier this year that the company's newspapers "blatantly used news columns to plug their proprietor's satellite programmes".
The Independent by Nick Clark
The Wall Street Journal Europe – owned by Rupert Murdoch's News Corporation – was mired in controversy yesterday as its publisher quit over fears the newspaper had "crossed the boundary" between editorial content and advertising.
Andrew Langhoff sent a memo to colleagues at Dow Jones – which produces The Wall Street Journal – saying: "I wanted to let you know myself that I have decided to resign." He added that it was "the most honourable course". The move comes at a time when the "culture, practices and ethics of the press" in the UK and of News Corporation have come under close scrutiny by Lord Justice Leveson.
Mr Langhoff said: "There is – and should be – an inviolable boundary between our commercial relationships and the content we produce.
"The perception that this boundary was crossed via a broad agreement between The Wall Street Journal Europe's circulation department and a company called Executive Learning Partnership has been of great concern to me."
The newspaper said no longer has a deal with Executive Learning Partnership and the employee who had overseen the account is no longer with the company. But Mr Langhoff said: "Because the agreement could leave the impression that news coverage can be influenced by commercial relationships...I believe that my resignation is now the most honourable course."
Dow Jones confirmed his departure but declined to confirm why. Todd Larsen, Dow Jones president, said Mr Langhoff had been "instrumental in successfully growing our business in Europe." Mr Langhoff had intended to stay in his role until the end of the year. He told colleagues: "While my time with you will thus be somewhat foreshortened, I have every confidence that you will accomplish all that we had set out to do and more.
"I have great regard for The Wall Street Journal Europe and the people who work here. You represent the highest standards of excellence, journalism and ethics."
In 2008 Mr Langhoff was appointed to head Dow Jones' consumer business in Europe, the Middle East and Africa, as well as to oversee The Wall Street Journal Europe after his previous role as US publisher of another part of Dow Jones, the Ottaway Newspaper Group. Dow Jones was bought by News Corp for £3.2bn in 2007.
Lord Leveson's inquiry, announced by Prime Minister David Cameron in July, has the remit to particularly scrutinise another part of News Corporation's business. It will focus on the improper conduct within its European arm News International, especially the News of the World, which was subsequently shut down.
Sir Harold Evans, the former editor of The Sunday Times, resigned a year after Mr Murdoch bought the newspapers in 1981 complaining about editorial independence.
He wrote earlier this year that the company's newspapers "blatantly used news columns to plug their proprietor's satellite programmes".
The Independent by Nick Clark
WSJ Europe publisher quits in ethics flap
The publisher of the Wall Street Journal's European edition has quit over ethical issues raised by the newspaper's relationship with a Dutch consultancy.
The resignation of Andrew Langhoff comes as News Corp, the paper's parent company, fights accusations of misbehavior in a UK telephone hacking scandal.
The nature of the relationship was unclear, but News Corp's Dow Jones unit said on Tuesday that the issue related to two articles involving the Dutch firm, the Executive Learning Partnership (ELP).
The agreement between the paper and the firm, now expired, was not disclosed to readers of the articles, the Journal said in a note attached to the articles on its website.
''The impetus for writing the article was the agreement, but the reporting and writing were solely the responsibility of the News Department with no input or review prior to publication by the Circulation Department or ELP,'' the note said.
''However, any action that creates an impression that news coverage can be influenced by commercial interests is a breach of the ethical standards of Dow Jones & Co,'' it said.
Langhoff resigned because the publisher ''has the ultimate responsibility for this matter,'' Dow Jones said in a separate statement.
The Journal, in an article on its website on Tuesday, said an internal investigation had found that Langhoff personally pressured two reporters into writing articles featuring ELP.
Dow Jones has been fighting accusations of ethical violations tied to phone hacking at its News of the World newspaper in London. Those allegations, which have led to a number of arrests, have prompted critics to demand the resignation of Chairman and Chief Executive Rupert Murdoch and other executives, including his son James.
One of the Wall Street Journal Europe articles, which ran in October 2010, is called A New Leaf: Beyond personal use, businesses are waking up to the possibilities of social media.
The article relies on a poll conducted by ELP and features interviews with two ELP executives, including Rien van Lent, identified by the Journal as ELP's chief executive.
FORMER DOW JONES PUBLISHER
ELP's website says van Lent worked for Dow Jones as publisher of the Wall Street Journal Europe and head of Dow Jones's European newspaper, Internet and conference activities. He then joined Amsterdam's Telegraaf Media Group in 2006, before News Corp bought Dow Jones.
He and another ELP official did not respond to email messages seeking comment.
Another article, which ran in March 2011, is headlined Investing in women: Men still dominate boardrooms, but more women at the top could boost returns.
The article is a question-and-answer interview with an ELP partner.
A Dow Jones spokeswoman declined to comment on whether Langhoff was aware of or blessed the arrangement, when and why the arrangement ended, or how the ethics issue reached the attention of Dow Jones and News Corp officials.
Langhoff, who became publisher of WSJ Europe in January 2009, based in London, also was the chief executive of Ottaway, a Dow Jones unit that publishes several local U.S. newspapers. He did not return an email message seeking comment.
Dow Jones competes with Thomson Reuters.
- Reuters
ROBERT MACMILLAN AND YINKA ADEGOKE
The resignation of Andrew Langhoff comes as News Corp, the paper's parent company, fights accusations of misbehavior in a UK telephone hacking scandal.
The nature of the relationship was unclear, but News Corp's Dow Jones unit said on Tuesday that the issue related to two articles involving the Dutch firm, the Executive Learning Partnership (ELP).
The agreement between the paper and the firm, now expired, was not disclosed to readers of the articles, the Journal said in a note attached to the articles on its website.
''The impetus for writing the article was the agreement, but the reporting and writing were solely the responsibility of the News Department with no input or review prior to publication by the Circulation Department or ELP,'' the note said.
''However, any action that creates an impression that news coverage can be influenced by commercial interests is a breach of the ethical standards of Dow Jones & Co,'' it said.
Langhoff resigned because the publisher ''has the ultimate responsibility for this matter,'' Dow Jones said in a separate statement.
The Journal, in an article on its website on Tuesday, said an internal investigation had found that Langhoff personally pressured two reporters into writing articles featuring ELP.
Dow Jones has been fighting accusations of ethical violations tied to phone hacking at its News of the World newspaper in London. Those allegations, which have led to a number of arrests, have prompted critics to demand the resignation of Chairman and Chief Executive Rupert Murdoch and other executives, including his son James.
One of the Wall Street Journal Europe articles, which ran in October 2010, is called A New Leaf: Beyond personal use, businesses are waking up to the possibilities of social media.
The article relies on a poll conducted by ELP and features interviews with two ELP executives, including Rien van Lent, identified by the Journal as ELP's chief executive.
FORMER DOW JONES PUBLISHER
ELP's website says van Lent worked for Dow Jones as publisher of the Wall Street Journal Europe and head of Dow Jones's European newspaper, Internet and conference activities. He then joined Amsterdam's Telegraaf Media Group in 2006, before News Corp bought Dow Jones.
He and another ELP official did not respond to email messages seeking comment.
Another article, which ran in March 2011, is headlined Investing in women: Men still dominate boardrooms, but more women at the top could boost returns.
The article is a question-and-answer interview with an ELP partner.
A Dow Jones spokeswoman declined to comment on whether Langhoff was aware of or blessed the arrangement, when and why the arrangement ended, or how the ethics issue reached the attention of Dow Jones and News Corp officials.
Langhoff, who became publisher of WSJ Europe in January 2009, based in London, also was the chief executive of Ottaway, a Dow Jones unit that publishes several local U.S. newspapers. He did not return an email message seeking comment.
Dow Jones competes with Thomson Reuters.
- Reuters
ROBERT MACMILLAN AND YINKA ADEGOKE
Sunday 9 October 2011
News Corp investors urged to be cautious over re-election of Murdochs
Glass Lewis, an influential shareholder adviser, adds its voice to those recommending a shakeup of the News Corp board.
The campaign to unseat members of the Murdoch family from their positions as directors of News Corporation may have spread to the US with cautionary advice about them from an influential adviser.
Glass Lewis, which advises institutions holding $15tn (£9.6tn) worth of investments, has recommended that investors vote against the re-election of Rupert Murdoch's two sons, James and Lachlan, at the News Corp annual meeting next week in protest at the phone-hacking scandal.
A report from Glass Lewis advises investors to "carefully consider the nature of the relationship each director has with the company and with its controlling shareholder, the Murdoch family, in order to establish a board with proper independence levels and strong oversight".The move follows advice in Britain from the Local Authority Pension Fund Forum that Rupert and James should step down. The institutional shareholder advisory service, Pirc, has called for a shakeup.
The Australian Council of Superannuation Investors said last month that the News Corp board structure "does not reflect good corporate governance" and called for six directors to stand down.
Glass Lewis is also recommending shareholders carefully consider the re-election of Natalie Bancroft, David DeVoe, Andrew Knight and Arthur Suskind as well as the Murdoch sons on the grounds that they are not sufficiently independent.Concerns about personnel on the board have existed for many years but the phone-hacking scandal unearthed by the Guardian and which led to the closure of the News of the World newspaper in Britain has been seen as a symptom of wider problems at the company.
A corporate governance specialist who asked not to be named said the move by Glass Lewis could trigger other influential organisations such as Institutional Shareholder Services (ISS) to come out against News Corp directors. The California Public Employees' Retirement System (Calpers), the largest US public pension fund and a leading campaigner on corporate governance issues, has yet to comment, but in summer it launched an attack on the dual-class structure that gives the Murdoch family almost 40% of the voting rights in the company despite owning only 12% of the equity. Calpers described this as "a corruption of the governance system".
News Corp declined to comment last night on the growing row before its 21 October annual general meeting but the Murdochs know their voting strength makes it difficult for investors to unseat the family members or other directors who have close ties with them.
The Murdochs have been under fire since July when it emerged that the News of the World had illegally targeted the missing schoolgirl Milly Dowler and her family in March 2002, interfering with police inquiries into her disappearance.
An inquiry was launched by Scotland Yard and soon led to the resignation of the then editor of the paper, Rebekah Brooks, who was more recently Rupert Murdoch's chief executive in the UK. The police investigation continues, and last week Lord Justice Leveson began a government-backed review of press behaviour and ethics.
The Guardian, by Terry Macalister
Saturday 8 October 2011
About Rupert Murdoch
In an era of media empires, Rupert Murdoch, the Australian-born chairman and controlling shareholder of News Corporation, is perhaps the preeminent global media magnate. News Corp., which owns Fox News, The Wall Street Journal, The New York Post and the 20th Century Fox film studio, among many other assets, is one of the world’s largest media conglomerates.
In the worlds of politics as well as media, Mr. Murdoch has clearly been one of the most influential figures of our time, and nowhere more so than in Britain, where he made his mark as a newspapering revolutionary.
But Mr. Murdoch came under an unprecedented level of attack in July 2011, when a long-simmering investigation into phone-hacking by reporters at The News of the World, a British Murdoch property, exploded into a wide-ranging scandal. The firestorm was triggered by the revelation that the paper had deleted voice mail messages from the cellphone of a 13-year-old girl who was abducted and murdered in 2002, a move that had added to vain hopes that she was still alive.
Within two weeks, Mr. Murdoch had closed down The News of the World, seen two former editors of the paper arrested, accepted the resignation of Les Hinton, one of his closest associates, and abandoned what would have been the biggest deal of his career, the $12 billion takeover of Britain's biggest pay television company, British Sky Broadcasting. He had also borne the brunt of an outpouring of fury from the public and Parliament, as politicians of all parties who had long chafed under the need to win his support lashed out.
On July 19, Mr. Murdoch was questioned by a Parliamentary committee, where he began his testimony by saying, "This is the most humble day of my life." Mr. Murdoch spent much of his time insisting that he was deeply sorry over the revelations of widespread unethical practices at his British newspapers, that he knew little or nothing about them and that he had not tried to cover them up. The following day, a second parliamentary panel investigating the phone hacking scandal accused the Murdoch empire of “deliberate attempts” to thwart its investigations.
While defending his company against the myriad accusations accompanying the scandal, Mr. Murdoch insisted on August 10 that he had the backing of News Corporation’s board and would stay on as its chief executive for the foreseeable future. Meanwhile, News Corporation reported a drop in fourth-quarter profit but a robust gain for the fiscal year.
A Scandal Explodes
The furor over the extent of the alleged hacking by News of the World journalists broadened dramatically with reports of the hacking of the cellphone of Milly Dowler, the 13-year-old girl murder victim. The messages had been deleted by News of the World journalists to make room for new messages, a step that confused and agonized the police and members of her family, who took it as a sign that she might be alive.
Scotland Yard detectives were also investigating whether the hacking by News of the World extended to the voicemail accounts of relatives of victims of the bombings of three London subway trains and a double-decker bus in 2005, and relatives of fallen soldiers in Iraq and Afghanistan, and that it had paid police bribes amounting to tens of thousands of dollars for information. A member of Parliament raised allegations that nine years previously News of the World had participated in efforts to disrupt a murder investigation.
The Murdoch family announced on July 7 that it would shut down News of the World, in a move that seemed calculated to help protect the BSkyB deal. Following the arrest of Andy Coulson, a former senior aide to Prime Minister David Cameron and editor of News of the World, Mr. Cameron announced two separate inquiries into the hacking revelations, saying “no stone will be left unturned.”
Neither a series of arrests nor Mr. Cameron’s vow to rein in the press seemed to contain the fast-spreading scandal. On July 10, Ed Miliband, the Labour leader, announced his intention to force a Commons vote on the BSkyB bid, saying that he regretted having to take the step but believed that Mr. Cameron had left no other option because of his refusal to move to halt the takeover.
Former Prime Minister Gordon Brown brought new and alarming charges to the scandal, accusing The Sunday Times — one of the most prestigious newspapers in Mr. Murdoch’s group — of employing “known criminals” to gather personal information on his bank account, legal files and tax affairs. Mr. Brown said he had been harrassed by Murdoch newspapers over more than 10 years, first as chancellor of the exchequer and later as prime minister.
On July 13, News Corporation dropped its bid for British Sky Broadcasting. The deal, which had drawn fierce opposition from rivals in Britain, could have given Mr. Murdoch the ability to create an all-you-can-eat media smorgasbord, potentially packaging things from news to films to books to television sports and delivering it to BSkyB’s 10 million British customers via satellite, broadband connections or other means.
In response to requests from members of Congress and to at least one news report, the Federal Bureau of Investigation in New York opened a preliminary inquiry into allegations that News Corporation journalists sought to gain access to the phone records of victims of the Sept. 11 attacks.
On July 15, after days of mounting pressure from politicians and investors, Rebekah Brooks announced her resignation, in yet another stunning blow to Mr. Murdoch’s once all-powerful empire. It was a day of stepped-up damage control by Mr. Murdoch, who released a copy of an apologetic note to be published in all British newspapers that weekend, and also visited the family of Milly Dowler, offering an apology for the actions of his employees.
Later in the day, Les Hinton, one of Mr. Murdoch's closest deputies for decades, resigned from his posts as chief executive of Dow Jones and publisher of The Wall Street Journal, the crown jewel of Mr. Murdoch's American media empire, amid a growing outcry over the practices of the company's British newspapers. Mr. Hinton had been the executive chairman of News International, the umbrella company for those papers, from 1995 until 2007, the period when the most egregious known examples of voice mail hacking by News International employees took place.
On July 17, Ms. Brooks was arrested in connection with the policy inquiry.
Mr. Murdoch's July 19 appearance before the the select committee on culture, media and sport did not seem to have come close to answering many of the questions he faced about phone hacking in the British outpost of his media empire in 2002.
Building an Empire
After building a chain of newspaper and magazine properties in Australia in the 1950s and '60s, Mr. Murdoch expanded first to the United Kingdom and then the United States, where The New York Post has been the embodiment of his hard-charging tabloid style and conservative views.
From newspapers, he moved into the world of television, founding the Fox network, the first to break the decades-old dominance of the Big 3 networks over prime time, and the Fox News Network, movies and the Internet. In 2005, News Corporation bought the company that owned Myspace.com for $580 million, a price that seemed stunning at the time.
But one of Mr. Murdoch's biggest coups was the wresting of control of Dow Jones and Company — and its chief prize, The Wall Street Journal — from the hands of the Bancroft family in the summer of 2007. The family had long been dead set against a sale, specifically and particularly to Mr. Murdoch, whom many of them openly disdained. But, choosing a moment when the company's stock price had been steadily sagging, he made a $5 billion bid, representing a premium of roughly two-thirds of its trading price at the time. The move at once cleared the field of potential competitors and broke the ranks of the Bancroft heirs. After weeks of wrenching arguments, the family agreed to the deal essentially on Mr. Murdoch's terms.
In 2008 and 2009, the juggernaut that had been News Corporation faltered as the deepening recession cut deeply into advertising revenues — particularly at his beloved newspapers, including the Journal.
In June 2010, his company took significant steps toward charging readers for online content with the announcement that it had acquired an electronic reading platform called Skiff and had made an investment in a company that was developing pay models for newspapers and magazines.
Skiff is a company that the Hearst Corporation established in 2009 to develop an online store and an e-reader for publications. The News Corporation indicated that it was not buying the hardware plans; instead, it was interested in Skiff's ability to deliver compelling rich media layouts for newspapers and magazines on the Web.
The News Corporation, joining other media companies in reaping the benefits of a rebounding advertising market, announced in January 2011 that it had more than doubled its net income in the quarter that ended Dec. 31, 2010. The company reported net income of $642 million compared with $254 million in the period a year earlier.
The Daily
In February 2011, Mr. Murdoch unveiled The Daily, a news app that he hopes will put his News Corporation front and center in the digital newsstand of the near future. The Daily, an all-purpose publication designed solely for iPads and other tablet computers will cost 99 cents per week, or $40 per year.
For Mr. Murdoch and the News Corporation, The Daily represents something far grander and more ambitious than a new business undertaking: it is an opportunity to try to reinvent the business model for news publishing. Mr. Murdoch has emerged as one of the loudest voices on the media scene proclaiming that the future of online media would be build on paid content — that information did not want to be free.
Apple, the maker of the iPad, has given Mr. Murdoch something the entire publishing industry has been clamoring for: the digital equivalent of a recurring magazine subscription that will automatically re-bill to a customer’s credit card.
With few exceptions — one being News Corporation’s Wall Street Journal — Apple has not allowed media companies to sell more than one issue at a time through its App Store. Other publishers, which have been pressuring Apple to allow them to sell subscriptions through the App Store, are hoping The Daily is a turning point for how news applications are sold and distributed to consumers.
My Space
In June 2011, News Corporation sold the troubled social media Web site, MySpace, which it bought in 2005 for $580 million. MySpace was sold to the advertising targeting firm Specific Media for roughly $35 million.
The News Corporation had been trying since 2010 to rid itself of the unprofitable unit, which was a casualty of changing tastes.
The sale closed a complex chapter in the history of the Internet and of the News Corporation, which was widely envied by other media companies when it acquired MySpace. At that time, MySpace was the world’s fastest-growing social network, with 20 million unique visitors each month in the United States. That figure soon soared to 70 million, but the network could not keep pace with Facebook.
Murdoch in America
In recent years, Mr. Murdoch has become more of a political force than ever in the United States. Fox News has added viewers and influence since the election of President Obama, becoming an enthusiastic promoter of the Tea Party Movement and other conservative candidates.
Mr. Murdoch’s News Corporation played a larger and more directly partisan role in the 2010 elections than it is known to have played in any previous American campaign. The company gave $1 million to the U.S. Chamber of Commerce, which largely worked to elect Republicans, and its News America division gave $1 million to the Republican Governors Association.
The disclosure of the donations drew swift condemnation from Democrats and liberal groups, which cited it as more evidence that Mr. Murdoch was pursuing a political agenda. Mr. Murdoch’s more prominent involvement in American politics comes at a time when campaign finance rules have effectively been loosened in ways that require less disclosure of donations.
News Corporation officials stated that its donations are entirely separate from its news operations and are instead related to its broader corporate interests.
But the News Corporation’s donations to the U.S. Chamber and the Republican Governors Association were different for their heft and the nature of the groups, which can accept unlimited, unregulated donations to pursue hardball political campaigns.
Murdoch's Influence in Britain
Since he began building his media empire, Mr. Murdoch has been a figure of towering political importance, credited by many British politicians with the power to make and unmake governments as well as influence government policies that affect the fortunes of his newspaper and television interests.
Mr. Murdoch has used his clout to try to curb the powers of media regulatory bodies and expand his control of BSkyB. But he has also voiced strong opinions on matters of wider significance, like British politicians’ flirtation with the idea of abandoning the pound for the euro, an idea Mr. Murdoch vehemently opposed.
His decision to switch his British newspapers’ support to Mr. Cameron and the Conservatives in 2010 after backing Labour in three elections, many political analysts say, made a crucial difference in returning the Conservatives to power.
Similarly, when he dumped the Conservatives in favor of Labour in 1997, many say, he helped create the wave that kept Mr. Blair in office for the next decade.
That influence, unmatched by any other figure outside of politics, has been damaged by the phone-hacking scandal that erupted over News of the World.
The company’s decision to close News of the World will not end the scrutiny of the newspaper’s practices by the police, courts and Parliament and by a public panel of inquiry that Mr. Cameron has promised to appoint.
Together, these investigations seem likely to make for an inquisition that could run for years, causing further erosion in the credibility of the Murdoch brand and costing News International millions of dollars in potential legal settlements.
The New York Times
In the worlds of politics as well as media, Mr. Murdoch has clearly been one of the most influential figures of our time, and nowhere more so than in Britain, where he made his mark as a newspapering revolutionary.
But Mr. Murdoch came under an unprecedented level of attack in July 2011, when a long-simmering investigation into phone-hacking by reporters at The News of the World, a British Murdoch property, exploded into a wide-ranging scandal. The firestorm was triggered by the revelation that the paper had deleted voice mail messages from the cellphone of a 13-year-old girl who was abducted and murdered in 2002, a move that had added to vain hopes that she was still alive.
Within two weeks, Mr. Murdoch had closed down The News of the World, seen two former editors of the paper arrested, accepted the resignation of Les Hinton, one of his closest associates, and abandoned what would have been the biggest deal of his career, the $12 billion takeover of Britain's biggest pay television company, British Sky Broadcasting. He had also borne the brunt of an outpouring of fury from the public and Parliament, as politicians of all parties who had long chafed under the need to win his support lashed out.
On July 19, Mr. Murdoch was questioned by a Parliamentary committee, where he began his testimony by saying, "This is the most humble day of my life." Mr. Murdoch spent much of his time insisting that he was deeply sorry over the revelations of widespread unethical practices at his British newspapers, that he knew little or nothing about them and that he had not tried to cover them up. The following day, a second parliamentary panel investigating the phone hacking scandal accused the Murdoch empire of “deliberate attempts” to thwart its investigations.
While defending his company against the myriad accusations accompanying the scandal, Mr. Murdoch insisted on August 10 that he had the backing of News Corporation’s board and would stay on as its chief executive for the foreseeable future. Meanwhile, News Corporation reported a drop in fourth-quarter profit but a robust gain for the fiscal year.
A Scandal Explodes
The furor over the extent of the alleged hacking by News of the World journalists broadened dramatically with reports of the hacking of the cellphone of Milly Dowler, the 13-year-old girl murder victim. The messages had been deleted by News of the World journalists to make room for new messages, a step that confused and agonized the police and members of her family, who took it as a sign that she might be alive.
Scotland Yard detectives were also investigating whether the hacking by News of the World extended to the voicemail accounts of relatives of victims of the bombings of three London subway trains and a double-decker bus in 2005, and relatives of fallen soldiers in Iraq and Afghanistan, and that it had paid police bribes amounting to tens of thousands of dollars for information. A member of Parliament raised allegations that nine years previously News of the World had participated in efforts to disrupt a murder investigation.
The Murdoch family announced on July 7 that it would shut down News of the World, in a move that seemed calculated to help protect the BSkyB deal. Following the arrest of Andy Coulson, a former senior aide to Prime Minister David Cameron and editor of News of the World, Mr. Cameron announced two separate inquiries into the hacking revelations, saying “no stone will be left unturned.”
Neither a series of arrests nor Mr. Cameron’s vow to rein in the press seemed to contain the fast-spreading scandal. On July 10, Ed Miliband, the Labour leader, announced his intention to force a Commons vote on the BSkyB bid, saying that he regretted having to take the step but believed that Mr. Cameron had left no other option because of his refusal to move to halt the takeover.
Former Prime Minister Gordon Brown brought new and alarming charges to the scandal, accusing The Sunday Times — one of the most prestigious newspapers in Mr. Murdoch’s group — of employing “known criminals” to gather personal information on his bank account, legal files and tax affairs. Mr. Brown said he had been harrassed by Murdoch newspapers over more than 10 years, first as chancellor of the exchequer and later as prime minister.
On July 13, News Corporation dropped its bid for British Sky Broadcasting. The deal, which had drawn fierce opposition from rivals in Britain, could have given Mr. Murdoch the ability to create an all-you-can-eat media smorgasbord, potentially packaging things from news to films to books to television sports and delivering it to BSkyB’s 10 million British customers via satellite, broadband connections or other means.
In response to requests from members of Congress and to at least one news report, the Federal Bureau of Investigation in New York opened a preliminary inquiry into allegations that News Corporation journalists sought to gain access to the phone records of victims of the Sept. 11 attacks.
On July 15, after days of mounting pressure from politicians and investors, Rebekah Brooks announced her resignation, in yet another stunning blow to Mr. Murdoch’s once all-powerful empire. It was a day of stepped-up damage control by Mr. Murdoch, who released a copy of an apologetic note to be published in all British newspapers that weekend, and also visited the family of Milly Dowler, offering an apology for the actions of his employees.
Later in the day, Les Hinton, one of Mr. Murdoch's closest deputies for decades, resigned from his posts as chief executive of Dow Jones and publisher of The Wall Street Journal, the crown jewel of Mr. Murdoch's American media empire, amid a growing outcry over the practices of the company's British newspapers. Mr. Hinton had been the executive chairman of News International, the umbrella company for those papers, from 1995 until 2007, the period when the most egregious known examples of voice mail hacking by News International employees took place.
On July 17, Ms. Brooks was arrested in connection with the policy inquiry.
Mr. Murdoch's July 19 appearance before the the select committee on culture, media and sport did not seem to have come close to answering many of the questions he faced about phone hacking in the British outpost of his media empire in 2002.
Building an Empire
After building a chain of newspaper and magazine properties in Australia in the 1950s and '60s, Mr. Murdoch expanded first to the United Kingdom and then the United States, where The New York Post has been the embodiment of his hard-charging tabloid style and conservative views.
From newspapers, he moved into the world of television, founding the Fox network, the first to break the decades-old dominance of the Big 3 networks over prime time, and the Fox News Network, movies and the Internet. In 2005, News Corporation bought the company that owned Myspace.com for $580 million, a price that seemed stunning at the time.
But one of Mr. Murdoch's biggest coups was the wresting of control of Dow Jones and Company — and its chief prize, The Wall Street Journal — from the hands of the Bancroft family in the summer of 2007. The family had long been dead set against a sale, specifically and particularly to Mr. Murdoch, whom many of them openly disdained. But, choosing a moment when the company's stock price had been steadily sagging, he made a $5 billion bid, representing a premium of roughly two-thirds of its trading price at the time. The move at once cleared the field of potential competitors and broke the ranks of the Bancroft heirs. After weeks of wrenching arguments, the family agreed to the deal essentially on Mr. Murdoch's terms.
In 2008 and 2009, the juggernaut that had been News Corporation faltered as the deepening recession cut deeply into advertising revenues — particularly at his beloved newspapers, including the Journal.
In June 2010, his company took significant steps toward charging readers for online content with the announcement that it had acquired an electronic reading platform called Skiff and had made an investment in a company that was developing pay models for newspapers and magazines.
Skiff is a company that the Hearst Corporation established in 2009 to develop an online store and an e-reader for publications. The News Corporation indicated that it was not buying the hardware plans; instead, it was interested in Skiff's ability to deliver compelling rich media layouts for newspapers and magazines on the Web.
The News Corporation, joining other media companies in reaping the benefits of a rebounding advertising market, announced in January 2011 that it had more than doubled its net income in the quarter that ended Dec. 31, 2010. The company reported net income of $642 million compared with $254 million in the period a year earlier.
The Daily
In February 2011, Mr. Murdoch unveiled The Daily, a news app that he hopes will put his News Corporation front and center in the digital newsstand of the near future. The Daily, an all-purpose publication designed solely for iPads and other tablet computers will cost 99 cents per week, or $40 per year.
For Mr. Murdoch and the News Corporation, The Daily represents something far grander and more ambitious than a new business undertaking: it is an opportunity to try to reinvent the business model for news publishing. Mr. Murdoch has emerged as one of the loudest voices on the media scene proclaiming that the future of online media would be build on paid content — that information did not want to be free.
Apple, the maker of the iPad, has given Mr. Murdoch something the entire publishing industry has been clamoring for: the digital equivalent of a recurring magazine subscription that will automatically re-bill to a customer’s credit card.
With few exceptions — one being News Corporation’s Wall Street Journal — Apple has not allowed media companies to sell more than one issue at a time through its App Store. Other publishers, which have been pressuring Apple to allow them to sell subscriptions through the App Store, are hoping The Daily is a turning point for how news applications are sold and distributed to consumers.
My Space
In June 2011, News Corporation sold the troubled social media Web site, MySpace, which it bought in 2005 for $580 million. MySpace was sold to the advertising targeting firm Specific Media for roughly $35 million.
The News Corporation had been trying since 2010 to rid itself of the unprofitable unit, which was a casualty of changing tastes.
The sale closed a complex chapter in the history of the Internet and of the News Corporation, which was widely envied by other media companies when it acquired MySpace. At that time, MySpace was the world’s fastest-growing social network, with 20 million unique visitors each month in the United States. That figure soon soared to 70 million, but the network could not keep pace with Facebook.
Murdoch in America
In recent years, Mr. Murdoch has become more of a political force than ever in the United States. Fox News has added viewers and influence since the election of President Obama, becoming an enthusiastic promoter of the Tea Party Movement and other conservative candidates.
Mr. Murdoch’s News Corporation played a larger and more directly partisan role in the 2010 elections than it is known to have played in any previous American campaign. The company gave $1 million to the U.S. Chamber of Commerce, which largely worked to elect Republicans, and its News America division gave $1 million to the Republican Governors Association.
The disclosure of the donations drew swift condemnation from Democrats and liberal groups, which cited it as more evidence that Mr. Murdoch was pursuing a political agenda. Mr. Murdoch’s more prominent involvement in American politics comes at a time when campaign finance rules have effectively been loosened in ways that require less disclosure of donations.
News Corporation officials stated that its donations are entirely separate from its news operations and are instead related to its broader corporate interests.
But the News Corporation’s donations to the U.S. Chamber and the Republican Governors Association were different for their heft and the nature of the groups, which can accept unlimited, unregulated donations to pursue hardball political campaigns.
Murdoch's Influence in Britain
Since he began building his media empire, Mr. Murdoch has been a figure of towering political importance, credited by many British politicians with the power to make and unmake governments as well as influence government policies that affect the fortunes of his newspaper and television interests.
Mr. Murdoch has used his clout to try to curb the powers of media regulatory bodies and expand his control of BSkyB. But he has also voiced strong opinions on matters of wider significance, like British politicians’ flirtation with the idea of abandoning the pound for the euro, an idea Mr. Murdoch vehemently opposed.
His decision to switch his British newspapers’ support to Mr. Cameron and the Conservatives in 2010 after backing Labour in three elections, many political analysts say, made a crucial difference in returning the Conservatives to power.
Similarly, when he dumped the Conservatives in favor of Labour in 1997, many say, he helped create the wave that kept Mr. Blair in office for the next decade.
That influence, unmatched by any other figure outside of politics, has been damaged by the phone-hacking scandal that erupted over News of the World.
The company’s decision to close News of the World will not end the scrutiny of the newspaper’s practices by the police, courts and Parliament and by a public panel of inquiry that Mr. Cameron has promised to appoint.
Together, these investigations seem likely to make for an inquisition that could run for years, causing further erosion in the credibility of the Murdoch brand and costing News International millions of dollars in potential legal settlements.
The New York Times
Friday 7 October 2011
Kelly Hoppen accepts £60,000 hacking settlement from NOTW
News International offers 'unreserved apology' to interior designer at the High Court
Kelly Hoppen, the stepmother of the actress Sienna Miller, yesterday settled her phone hacking claim against the News of the World by accepting £60,000 in damages and hundreds of thousands of pounds in legal costs.
The celebrity interior designer became one of the most high-profile litigants in the voicemail interception scandal after she claimed that her phone was targeted by a reporter from the now-defunct Sunday tabloid as recently as last year – long after the paper insisted any such malpractice had been stamped out.
At the High Court in London, lawyers for Rupert Murdoch's News International offered an "unreserved apology" to Ms Hoppen after her voicemails were accessed between 2004 and 2006 by the private investigator Glenn Mulcaire.
But the company said it had not admitted liability for the alleged later hacking of the 52-year-old's phone by the NOTW features writer Dan Evans between June 2009 and March 2010. The court was told Mr Evans had instead given "permanent undertakings" which had been accepted by Ms Hoppen.
In a hearing earlier this year, Mr Justice Vos, the judge presiding over the burgeoning number of civil hacking claims, was told that Mr Evans had accidentally dialled Ms Hoppen's mobile phone, including her direct dial voicemail number, because of "sticky keys" on his own handset and there had been no attempt to access her messages. The journalist, who was suspended while the allegations were investigated, lost his job in July along with more than 200 colleagues when the decision was taken to close the paper.
In a statement read in open court, Mark Thomson, the solicitor representing the designer, said: "The claimant considers that she is fully vindicated in respect of her claim."
The lawsuit brought by Ms Hoppen had been chosen as one of six "lead" cases due to be heard in January which would decide the level of settlements due to the victims of Mr Mulcaire and unnamed journalists on the newspaper who commissioned him.
It will now be replaced by a claim brought by the Chelsea star Ashley Cole, who is one of 60 celebrities, public figures and victims of crime who have filed damages claims for alleged hacking of their voicemails. A deadline set by Mr Vos for claims to be considered alongside the test cases brought an influx of additional new claimants last week, including Shaun Russell, whose wife and daughter were murdered by the hammer killer Michael Stone, and 7/7 hero Paul Dadge.
The court heard that Scotland Yard had now informed 452 people that they appeared in documents seized from Mr Mulcaire on which he noted the names of his targets and their personal details. More than 4,000 people are thought to feature in the 11,000 pages of material taken from private investigator's south London home in 2006.
The increasing scale of the litigation faced by News International is now expected to grossly exceed the £20m it had set aside to settle civil claims. The family of the murdered schoolgirl Milly Dowler are close to finalising a £3m out-of-court settlement which is likely to have a knock-on effect on claims by other victims of crime.
The court heard that Ms Hoppen had been the subject of "numerous" articles in the NOTW between 2004 and 2006 which contained "intrusive and private" information.
It was alleged that the interior designer, whose clients have included the Beckhams and the chef Gary Rhodes, was targeted as a part of a "scheme" to regularly eavesdrop on the phone messages of individuals from showbusiness, politics and sport. Earlier this year, Ms Miller settled her phone hacking claim for £100,000.
Michael Silverleaf QC, for the paper, said it was making a "sincere and unreserved apology" to Ms Hoppen.
In a separate development, a pre-trial hearing before Mr Justice Vos heard that The Sun was facing a claim from the actor Jude Law that it had its own, separate arrangement with Mr Mulcaire to target his mobile phone.
The actor, who is Ms Miller's former fiancé, is suing The Sun over four articles published in 2005 and 2006. David Sherborne QC, for Mr Law, told the court that it was alleged the paper had an arrangement with the private investigator which was "almost identical to but quite separate from" the one operated by the NOTW.
Who's taken a payoff – and what they've got
News International's payout to Kelly Hoppen is the same figure awarded to Max Mosley, the former head of the FIA, Formula 1's governing body. He successfully sued the News of the World for breach of privacy, took his case to court in 2008, and won. The scale of damages was at the time a record for a privacy claim in a UK court.
In May this year the actress Sienna Miller settled her phone hacking claim with Rupert Murdoch's tabloid. Avoiding court, Ms Miller was paid £100,000. Because of the persistent invasions of her private life, her case was believed to hold the potential for an even bigger payout. The sum was similar to the NI settlement with the actress Leslie Ash and her husband Lee Chapman. Although not disclosed, the pair are believed to have received just over £100,000.
The former footballer Andy Gray had his phone hacked and in June this year accepted out-of-court damages of £20,000.
Others, like the former MP George Galloway, claim they have been offered "substantial sums of money" to settle and have refused. However, two high-profile settlements had, until recently, been the peak payouts in the scandal.
The publicist Max Clifford is believed to have received £1m to keep his case out of court. And the footballers' union boss Gordon Taylor was given £725,000 and substantial costs to sign a "confidentiality" deal that kept the scale of the hacking culture hidden for years.
However last month's £3m payout by the Murdoch media empire to the parents of the murdered schoolgirl Milly Dowler set a new benchmark in the hacking scandal. Lawyers confirmed yesterday that 65 claims are still to be dealt with, and 452 other victims are waiting in what could be a long – and for NI a very expensive – queue.
The Independent, by Cahal Milmo and James Cusick
Kelly Hoppen, the stepmother of the actress Sienna Miller, yesterday settled her phone hacking claim against the News of the World by accepting £60,000 in damages and hundreds of thousands of pounds in legal costs.
The celebrity interior designer became one of the most high-profile litigants in the voicemail interception scandal after she claimed that her phone was targeted by a reporter from the now-defunct Sunday tabloid as recently as last year – long after the paper insisted any such malpractice had been stamped out.
At the High Court in London, lawyers for Rupert Murdoch's News International offered an "unreserved apology" to Ms Hoppen after her voicemails were accessed between 2004 and 2006 by the private investigator Glenn Mulcaire.
But the company said it had not admitted liability for the alleged later hacking of the 52-year-old's phone by the NOTW features writer Dan Evans between June 2009 and March 2010. The court was told Mr Evans had instead given "permanent undertakings" which had been accepted by Ms Hoppen.
In a hearing earlier this year, Mr Justice Vos, the judge presiding over the burgeoning number of civil hacking claims, was told that Mr Evans had accidentally dialled Ms Hoppen's mobile phone, including her direct dial voicemail number, because of "sticky keys" on his own handset and there had been no attempt to access her messages. The journalist, who was suspended while the allegations were investigated, lost his job in July along with more than 200 colleagues when the decision was taken to close the paper.
In a statement read in open court, Mark Thomson, the solicitor representing the designer, said: "The claimant considers that she is fully vindicated in respect of her claim."
The lawsuit brought by Ms Hoppen had been chosen as one of six "lead" cases due to be heard in January which would decide the level of settlements due to the victims of Mr Mulcaire and unnamed journalists on the newspaper who commissioned him.
It will now be replaced by a claim brought by the Chelsea star Ashley Cole, who is one of 60 celebrities, public figures and victims of crime who have filed damages claims for alleged hacking of their voicemails. A deadline set by Mr Vos for claims to be considered alongside the test cases brought an influx of additional new claimants last week, including Shaun Russell, whose wife and daughter were murdered by the hammer killer Michael Stone, and 7/7 hero Paul Dadge.
The court heard that Scotland Yard had now informed 452 people that they appeared in documents seized from Mr Mulcaire on which he noted the names of his targets and their personal details. More than 4,000 people are thought to feature in the 11,000 pages of material taken from private investigator's south London home in 2006.
The increasing scale of the litigation faced by News International is now expected to grossly exceed the £20m it had set aside to settle civil claims. The family of the murdered schoolgirl Milly Dowler are close to finalising a £3m out-of-court settlement which is likely to have a knock-on effect on claims by other victims of crime.
The court heard that Ms Hoppen had been the subject of "numerous" articles in the NOTW between 2004 and 2006 which contained "intrusive and private" information.
It was alleged that the interior designer, whose clients have included the Beckhams and the chef Gary Rhodes, was targeted as a part of a "scheme" to regularly eavesdrop on the phone messages of individuals from showbusiness, politics and sport. Earlier this year, Ms Miller settled her phone hacking claim for £100,000.
Michael Silverleaf QC, for the paper, said it was making a "sincere and unreserved apology" to Ms Hoppen.
In a separate development, a pre-trial hearing before Mr Justice Vos heard that The Sun was facing a claim from the actor Jude Law that it had its own, separate arrangement with Mr Mulcaire to target his mobile phone.
The actor, who is Ms Miller's former fiancé, is suing The Sun over four articles published in 2005 and 2006. David Sherborne QC, for Mr Law, told the court that it was alleged the paper had an arrangement with the private investigator which was "almost identical to but quite separate from" the one operated by the NOTW.
Who's taken a payoff – and what they've got
News International's payout to Kelly Hoppen is the same figure awarded to Max Mosley, the former head of the FIA, Formula 1's governing body. He successfully sued the News of the World for breach of privacy, took his case to court in 2008, and won. The scale of damages was at the time a record for a privacy claim in a UK court.
In May this year the actress Sienna Miller settled her phone hacking claim with Rupert Murdoch's tabloid. Avoiding court, Ms Miller was paid £100,000. Because of the persistent invasions of her private life, her case was believed to hold the potential for an even bigger payout. The sum was similar to the NI settlement with the actress Leslie Ash and her husband Lee Chapman. Although not disclosed, the pair are believed to have received just over £100,000.
The former footballer Andy Gray had his phone hacked and in June this year accepted out-of-court damages of £20,000.
Others, like the former MP George Galloway, claim they have been offered "substantial sums of money" to settle and have refused. However, two high-profile settlements had, until recently, been the peak payouts in the scandal.
The publicist Max Clifford is believed to have received £1m to keep his case out of court. And the footballers' union boss Gordon Taylor was given £725,000 and substantial costs to sign a "confidentiality" deal that kept the scale of the hacking culture hidden for years.
However last month's £3m payout by the Murdoch media empire to the parents of the murdered schoolgirl Milly Dowler set a new benchmark in the hacking scandal. Lawyers confirmed yesterday that 65 claims are still to be dealt with, and 452 other victims are waiting in what could be a long – and for NI a very expensive – queue.
The Independent, by Cahal Milmo and James Cusick
Wednesday 5 October 2011
Buffett challenges Murdoch on tax returns
NEW YORK (CNNMoney) -- Warren Buffett has a message for Rupert Murdoch and the Wall Street Journal: "Sure, I'll release my tax returns, if you do too."
Last week, the Wall Street Journal published an editorial that asked Buffett to disclose his tax returns. The piece, "Mr. Buffett's Tax Secrets," took issue with Buffett's plan to hike taxes on some of the super-rich.
But millionaires -- and in Buffett's case, billionaires -- typically have several sources of income, some of which are taxed at lower rates, if at all.
As a result, Buffett says he enjoys a lower tax rate than his secretary. Correcting that discrepancy is the aim of the Buffett Rule.
"We wouldn't want to violate their individual privacy, but since Mr. Buffett is using [his employees] to make a political point, perhaps he'd be willing to disclose the most important lines on their returns without disclosing their names," the op-ed said.
Buffett didn't go quite that far, making no requests to see the tax returns of Murdoch staffers.
Buffett says he paid $6,938,744 in federal taxes last year -- only 17.4% of his taxable income.
@CNNMoney
Last week, the Wall Street Journal published an editorial that asked Buffett to disclose his tax returns. The piece, "Mr. Buffett's Tax Secrets," took issue with Buffett's plan to hike taxes on some of the super-rich.
The Journal's conservative editorial board doesn't think that's a great idea, saying that Buffett should instead "educate the public" by letting "everyone else in on his secrets of tax avoidance by releasing his tax returns."
Asked about the editorial on Tuesday at Fortune's Most Powerful Women Summit, Buffett said he was willing to release his tax returns, on one condition:
"I think it might be a terrific idea if they would just ask their boss, Rupert Murdoch, and he and I will meet at Fortune, and we'll both give you our tax returns and you can publish them," Buffett said."I'm ready tomorrow morning," he added. (Read full transcript of interview)
Representatives from News Corp. (NWSA, Fortune 500), the parent company of the Wall Street Journal, did not immediately respond to requests for comment.
Buffett has become a political lightning rod in recent weeks after the Berkshire Hathaway (BRKA, Fortune 500) chairman let the White House attach his name to a tax proposal.
The "Buffett Rule" is a guideline -- that Buffett himself came up with -- designed to ensure that those making more than $1 million do not pay a lower overall tax rate than those who earn substantially less money.
For most people, wages make up a majority of their income, so when they get a raise their average tax rate may go up.
But millionaires -- and in Buffett's case, billionaires -- typically have several sources of income, some of which are taxed at lower rates, if at all.
As a result, Buffett says he enjoys a lower tax rate than his secretary. Correcting that discrepancy is the aim of the Buffett Rule.
Buffett's words twisted on taxes
And that secretary? The Journal wants to see her return as well."We wouldn't want to violate their individual privacy, but since Mr. Buffett is using [his employees] to make a political point, perhaps he'd be willing to disclose the most important lines on their returns without disclosing their names," the op-ed said.
Buffett didn't go quite that far, making no requests to see the tax returns of Murdoch staffers.
Buffett says he paid $6,938,744 in federal taxes last year -- only 17.4% of his taxable income.
Meanwhile, Murdoch was given a substantial raise recently, despite the hacking scandals that rocked his media empire. His total compensation jumped 47% to $33.3 million in the latest fiscal year, according to regulatory report News Corp. released in September.
@CNNMoney
Tuesday 4 October 2011
Hacking 'not result of pressure', says former News of the World editor Phil Hall
The phone hacking scandal cannot be blamed on pressure to produce big stories, a former News of the World editor said today.
Phil Hall, who edited the now-defunct paper from 1995 to 2000, told a seminar for the Leveson Inquiry that competitive pressures on newspapers had not led to a drop in standards.
He said phone hacking had not come about because of pressure for big stories but because a group of people had "indulged in illegal activity" and the checks and balances that should have been in place had failed.
The (first) seminar, held at the QE2 Conference Centre in Westminster, is the first in a series of discussions held as part of the inquiry into media ethics and phone hacking.
The session, called The Competitive Pressures on the Press and the Impact on Journalism, included a brief presentation from Mr Hall, as well as former Daily Star reporter Richard Peppiatt, and Claire Enders, from research and consultancy company Enders Analysis.
Mr Hall told the seminar, which included representatives from across the media, that he was never under pressure from owner Rupert Murdoch to boost the circulation figures of the News of the World.
"There was no pressure to achieve the unachievable," he said. "The pressure was to deliver a great campaigning newspaper."
Mr Hall told the seminar a "publish and be damned" attitude had "long been confined to the history books of Fleet Street" and the idea that editors were pushing for big stories to boost circulation figures was "simplistic".
"Some of our biggest stories - the Jeffrey Archer case, for example - delivered no increase in circulation," he said.
"Yes, we broke big stories but it was not the be all and end all of the operation."
He said pressures felt by reporters were due to "personal and professional pride".
"As an editor I did demand high standards and I did expect journalists to produce agenda-setting stories. Is that any different to a business leader in any other industry?
"Those who suggest and imply that phone hacking has arisen because of the pressures to deliver big stories are in my view wrong.
"It has happened because a group of people have indulged in illegal activity and the checks and balances that should have been in place in any newsroom, or any business for that matter, have failed."
Mr Hall said in his experience most journalists were professional and their stories were accurate.
"My experience is that 99% of journalists do act professionally - they are impartial, thorough and work within the PCC (Press Complaints Commission) Code of Conduct. And the vast majority of stories are accurate."
But he said the PCC had become "invisible", adding: "The PCC needs more clarity, more clout in what it does, and more visibility when it does act."
But Richard Peppiatt, who resigned from the Daily Star earlier this year over what he claimed was an Islamophobic news agenda, said newsrooms were "bullying and aggressive environments".
He claimed stories were often pre-planned, with reporters expected to get facts to fit in with the story.
"Tabloid newsrooms are often bullying and aggressive environments in which dissent is often not tolerated.
"The question is not, 'do you have a story on X', the question is 'today we are saying this about X, make it appear so'."
He said newspapers create a "feeding frenzy" around major crimes or stories, citing the Madeleine McCann and Joanna Yeates cases.
In an open discussion after the presentations, some editors questioned Mr Peppiatt's claims.
Richard Wallace, editor of the Daily Mirror, said he did not recognise the description of national newspaper newsrooms.
There was also agreement with Mr Hall, that commercial pressures had not led to a drop in standards.
Ian MacGregor, editor of the Sunday Telegraph, said: "I don't think anyone here would ever make an excuse that commercial pressures are changing the way we operate in terms of our integrity."
Daily Telegraph editor Tony Gallagher told the seminar: "There's a desire to be quick, there's a desire to be accurate, there's a desire to ensure you have got the best version of the story."
Press Association editor Jonathan Grun said: "All of us want to be first with a story but, first of all, all of us want to be sure that the story is right."
In a second seminar, on the Rights and Responsibilities of the Press, Guardian editor Alan Rusbridger discussed the importance of a free press.
"When people talk about licensing journalists the answer should be to look at history," he said.
He encouraged the inquiry to remember "how the freedoms won here became a model for much of the rest of the world", and "how the world still watches us to see how we protect those freedoms".
Trevor Kavanagh, former political editor of The Sun and now an associate editor, said: "Without free speech we cannot have a free society, once lost it would be almost impossible to restore."
He said it was in the public interest for newspapers to be able to assess the character of national figures.
"If people are seeking our votes or our cash, it is surely right that we should know if they are masquerading as someone they are not."
He said editors, sub editors and reporters knew the PCC code of conduct by heart, adding: "Sometimes they make mistakes but considering the number of stories and the number of headlines, not that many."
Mr Kavanagh said despite criticisms by some, the tabloids "drive the daily news agenda".
"Publishing news is not a public service, it is a ferociously competitive industry in a rapidly shrinking market," he said.
But he said it did provide a public service, turning complicated issues into "crisp, easily understood copy".
Mr Kavanagh said despite some flaws, the media was a "force for good", and said "gagging the media on the pretext of the public interest is one means of ensuring the public never learns the answer".
Brian Cathcart, founder of the Hacked Off campaign, told the seminar: "The existence of this inquiry is proof of a failure of public trust in journalism.
"Not just a failure of trust in one newspaper but in large parts of the industry and in its ethical standards and the mechanisms that uphold it."
He said the industry needed to show that ethical discussions were held about stories in the newsroom, in a bid to restore public trust.
In a discussion on Conditional Fee Agreements (CFAs) - no win, no fee cases - Mark Lewis, solicitor for the family of Milly Dowler, said they were an important tool.
"Everybody knows that they should not have hacked Milly Dowler's phone, everybody knows the cases that have come out in the last couple of days," he said.
"That is nothing to do with ethical considerations, it is to do with access to justice so people are able to fight back, to defend themselves by pursuing a claim."
Richard Caseby, former managing editor at the Sunday Times and now managing editor at The Sun, said the PCC Code was a "good code", that all Sun journalists signed up to.
"It's a good code, it's a very workable code," he said. "I think during the last year or so it could have done with much stronger leadership, but it's a good code and very, very many journalists adhere to it."
Lord Justice Leveson said the seminars had achieved what they set out to do, creating a "broad and open discussion of a number of important issues".
A third seminar, called Approaches to Regulation - supporting a free press and high standards, will be held next Wednesday, with speakers including former Sun editor Kelvin MacKenzie, and Paul Dacre, editor-in-chief of the Daily Mail.
Responding to Mr Peppiatt's comments, Daily Star editor Dawn Neesom said: "Express Newspapers totally refute Richard Peppiatt's version of life on the Daily Star. This freelance, junior reporter has painted a picture of a tabloid newsroom that exists only in his imagination. For the record, he was never employed on the staff.
"I am very proud of the Daily Star's small, young and talented team of journalists who work extremely hard to bring in genuine stories. They do not deserve these lies and smears. The Daily Star always has and always will abide by the Editors' Code of Practice.
"Mr Peppiatt has repeatedly admitted fabricating stories. This was his own choice of behaviour. At no point has he ever been asked or encouraged by Daily Star staff to fabricate stories.
"British newspaper journalism is still full of good, decent, hardworking people whose reputations are being tarnished by a few."
The Independent, by Ellen Branagh
Phil Hall, who edited the now-defunct paper from 1995 to 2000, told a seminar for the Leveson Inquiry that competitive pressures on newspapers had not led to a drop in standards.
He said phone hacking had not come about because of pressure for big stories but because a group of people had "indulged in illegal activity" and the checks and balances that should have been in place had failed.
The (first) seminar, held at the QE2 Conference Centre in Westminster, is the first in a series of discussions held as part of the inquiry into media ethics and phone hacking.
The session, called The Competitive Pressures on the Press and the Impact on Journalism, included a brief presentation from Mr Hall, as well as former Daily Star reporter Richard Peppiatt, and Claire Enders, from research and consultancy company Enders Analysis.
Mr Hall told the seminar, which included representatives from across the media, that he was never under pressure from owner Rupert Murdoch to boost the circulation figures of the News of the World.
"There was no pressure to achieve the unachievable," he said. "The pressure was to deliver a great campaigning newspaper."
Mr Hall told the seminar a "publish and be damned" attitude had "long been confined to the history books of Fleet Street" and the idea that editors were pushing for big stories to boost circulation figures was "simplistic".
"Some of our biggest stories - the Jeffrey Archer case, for example - delivered no increase in circulation," he said.
"Yes, we broke big stories but it was not the be all and end all of the operation."
He said pressures felt by reporters were due to "personal and professional pride".
"As an editor I did demand high standards and I did expect journalists to produce agenda-setting stories. Is that any different to a business leader in any other industry?
"Those who suggest and imply that phone hacking has arisen because of the pressures to deliver big stories are in my view wrong.
"It has happened because a group of people have indulged in illegal activity and the checks and balances that should have been in place in any newsroom, or any business for that matter, have failed."
Mr Hall said in his experience most journalists were professional and their stories were accurate.
"My experience is that 99% of journalists do act professionally - they are impartial, thorough and work within the PCC (Press Complaints Commission) Code of Conduct. And the vast majority of stories are accurate."
But he said the PCC had become "invisible", adding: "The PCC needs more clarity, more clout in what it does, and more visibility when it does act."
But Richard Peppiatt, who resigned from the Daily Star earlier this year over what he claimed was an Islamophobic news agenda, said newsrooms were "bullying and aggressive environments".
He claimed stories were often pre-planned, with reporters expected to get facts to fit in with the story.
"Tabloid newsrooms are often bullying and aggressive environments in which dissent is often not tolerated.
"The question is not, 'do you have a story on X', the question is 'today we are saying this about X, make it appear so'."
He said newspapers create a "feeding frenzy" around major crimes or stories, citing the Madeleine McCann and Joanna Yeates cases.
In an open discussion after the presentations, some editors questioned Mr Peppiatt's claims.
Richard Wallace, editor of the Daily Mirror, said he did not recognise the description of national newspaper newsrooms.
There was also agreement with Mr Hall, that commercial pressures had not led to a drop in standards.
Ian MacGregor, editor of the Sunday Telegraph, said: "I don't think anyone here would ever make an excuse that commercial pressures are changing the way we operate in terms of our integrity."
Daily Telegraph editor Tony Gallagher told the seminar: "There's a desire to be quick, there's a desire to be accurate, there's a desire to ensure you have got the best version of the story."
Press Association editor Jonathan Grun said: "All of us want to be first with a story but, first of all, all of us want to be sure that the story is right."
In a second seminar, on the Rights and Responsibilities of the Press, Guardian editor Alan Rusbridger discussed the importance of a free press.
"When people talk about licensing journalists the answer should be to look at history," he said.
He encouraged the inquiry to remember "how the freedoms won here became a model for much of the rest of the world", and "how the world still watches us to see how we protect those freedoms".
Trevor Kavanagh, former political editor of The Sun and now an associate editor, said: "Without free speech we cannot have a free society, once lost it would be almost impossible to restore."
He said it was in the public interest for newspapers to be able to assess the character of national figures.
"If people are seeking our votes or our cash, it is surely right that we should know if they are masquerading as someone they are not."
He said editors, sub editors and reporters knew the PCC code of conduct by heart, adding: "Sometimes they make mistakes but considering the number of stories and the number of headlines, not that many."
Mr Kavanagh said despite criticisms by some, the tabloids "drive the daily news agenda".
"Publishing news is not a public service, it is a ferociously competitive industry in a rapidly shrinking market," he said.
But he said it did provide a public service, turning complicated issues into "crisp, easily understood copy".
Mr Kavanagh said despite some flaws, the media was a "force for good", and said "gagging the media on the pretext of the public interest is one means of ensuring the public never learns the answer".
Brian Cathcart, founder of the Hacked Off campaign, told the seminar: "The existence of this inquiry is proof of a failure of public trust in journalism.
"Not just a failure of trust in one newspaper but in large parts of the industry and in its ethical standards and the mechanisms that uphold it."
He said the industry needed to show that ethical discussions were held about stories in the newsroom, in a bid to restore public trust.
In a discussion on Conditional Fee Agreements (CFAs) - no win, no fee cases - Mark Lewis, solicitor for the family of Milly Dowler, said they were an important tool.
"Everybody knows that they should not have hacked Milly Dowler's phone, everybody knows the cases that have come out in the last couple of days," he said.
"That is nothing to do with ethical considerations, it is to do with access to justice so people are able to fight back, to defend themselves by pursuing a claim."
Richard Caseby, former managing editor at the Sunday Times and now managing editor at The Sun, said the PCC Code was a "good code", that all Sun journalists signed up to.
"It's a good code, it's a very workable code," he said. "I think during the last year or so it could have done with much stronger leadership, but it's a good code and very, very many journalists adhere to it."
Lord Justice Leveson said the seminars had achieved what they set out to do, creating a "broad and open discussion of a number of important issues".
A third seminar, called Approaches to Regulation - supporting a free press and high standards, will be held next Wednesday, with speakers including former Sun editor Kelvin MacKenzie, and Paul Dacre, editor-in-chief of the Daily Mail.
Responding to Mr Peppiatt's comments, Daily Star editor Dawn Neesom said: "Express Newspapers totally refute Richard Peppiatt's version of life on the Daily Star. This freelance, junior reporter has painted a picture of a tabloid newsroom that exists only in his imagination. For the record, he was never employed on the staff.
"I am very proud of the Daily Star's small, young and talented team of journalists who work extremely hard to bring in genuine stories. They do not deserve these lies and smears. The Daily Star always has and always will abide by the Editors' Code of Practice.
"Mr Peppiatt has repeatedly admitted fabricating stories. This was his own choice of behaviour. At no point has he ever been asked or encouraged by Daily Star staff to fabricate stories.
"British newspaper journalism is still full of good, decent, hardworking people whose reputations are being tarnished by a few."
The Independent, by Ellen Branagh
Saturday 1 October 2011
Reporter Threatens to Name Names in Phone Hacking Scandal
LONDON — A reporter who is among the 16 people arrested and then freed on bail in the phone hacking case that has shaken Rupert Murdoch’s media empire in Britain warned his former bosses on Friday that he planned to break his silence on the scandal in a civil court case. He said that he would reveal those who were responsible for the phone hacking. The reporter, Neville Thurlbeck, 49, who was the chief reporter for the now-defunct tabloid The News of the World, gave the warning in a statement issued through his lawyers in connection with his wrongful-dismissal lawsuit against News International, the British newspaper arm of Mr. Murdoch’s News Corporation. Mr. Thurlbeck was one of the first people arrested by Scotland Yard in a renewed investigation of the phone hacking this year, but he has denied publicly having played any part in the illegal interception of cellphone voicemails.
Mr. Thurlbeck remained on the News International payroll into September, when he was fired. He has accused the company of having unfairly dismissed him for being a whistleblower. In his statement on Friday, he suggested that both sides “retain a dignified silence until we meet face to face in a public tribunal,” a hearing on his suit.
“There is so much I could have said publicly to the detriment of News International but so far have chosen not to,” he said. “At the length, truth will out.”
News International declined to comment on Mr. Thurlbeck’s statement.
With his statement, Mr. Thurlbeck appeared to have joined other current or former News International employees who have shown a readiness to contradict one another in public about newsroom wrongdoing at The News of the World — in particular, who authorized the phone hacking, who at the newspaper and at News International knew about it, and when.
The discrepancies apparently in accounts given this summer by Murdoch executives to a parliamentary committee investigating the scandal will be explored further in additional hearings called by the committee this fall.
The New York Times, by JOHN F. BURNS
Mr. Thurlbeck remained on the News International payroll into September, when he was fired. He has accused the company of having unfairly dismissed him for being a whistleblower. In his statement on Friday, he suggested that both sides “retain a dignified silence until we meet face to face in a public tribunal,” a hearing on his suit.
“There is so much I could have said publicly to the detriment of News International but so far have chosen not to,” he said. “At the length, truth will out.”
News International declined to comment on Mr. Thurlbeck’s statement.
With his statement, Mr. Thurlbeck appeared to have joined other current or former News International employees who have shown a readiness to contradict one another in public about newsroom wrongdoing at The News of the World — in particular, who authorized the phone hacking, who at the newspaper and at News International knew about it, and when.
The discrepancies apparently in accounts given this summer by Murdoch executives to a parliamentary committee investigating the scandal will be explored further in additional hearings called by the committee this fall.
The New York Times, by JOHN F. BURNS
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