Showing posts with label England. Show all posts
Showing posts with label England. Show all posts

Friday, 22 July 2011

How We Broke the Murdoch Scandal

Guardian editor Alan Rusbridger on his dogged reporter, a U.S. ally—and a gamble that finally paid off.

murdoch-the-guardian-fe06 Dan Chung / Eyevine-Redux (portrait)
Alan Rusbridger, editor of The Guardian. Inset: Cover of The Guardian after the scandal.
Every so often—perhaps once every 18 months—the veteran Guardian writer Nick Davies comes into my office, shuts the door with a conspiratorial backward glance, and proceeds to tell me something hair-raising.
In June last year he wanted to inform me about Julian Assange. He’d read that the (then little-known) snowy-haired hacker was on the run with a data stick full of millions of secret documents that the U.S. Defense and State departments had carelessly hemorrhaged. His plan was to track him down … and then The Guardian would publish them all. Good idea?
Early in 2009 there had been a similar moment. He’d discovered that James Murdoch, the son and heir of the most powerful private news-media company on earth, had done a secret deal to pay more than $1 million to cover up evidence of criminal behavior within the company. Interested?
The answer to both questions was—of course. Followed by a small inner gulp at the sheer scale and implications of the stories. Followed by the sight of Nick, invariably dressed in jeans and a defiantly unfashionable brown leather jacket, disappearing back out through the door in search of trouble.
Everyone knows how WikiLeaks ended: a global swarm of revelations and headlines, with governments the world over transfixed by the daily drip-feed of disclosures, war logs, classified cables, and diplomatic indiscretions. And now everyone knows how the Murdoch story ended: with a kind of giant heave of revulsion at what his employees had been up to, and with a multibillion-dollar merger stopped in its tracks by the most overwhelming parliamentary vote anyone can remember. A profitable newspaper selling millions of copies a week had been killed off. The British press regulator was dead in the water.
Except the Murdoch story isn’t finished. It reaches so deeply into so many aspects of British and American civic life—including policing, politics, media, and regulation—that the story will continue to play out over the months, even years, ahead. Everyone expects more arrests. There are numerous civil actions wending their way through the British courts. There will be two public inquiries—into the behavior of press and police. And who knows what trouble the News Corp. shareholders or American regulatory authorities might create the more they learn about the management of the British wing of the family business.
Rewind to July 2009 and think how different it could have been. Up to this point the official narrative was straightforward. News of the World’s royal correspondent, Clive Goodman, had been caught “hacking” the palace phones. Or, rather, he had subcontracted the job to a private investigator, Glenn Mulcaire, who was expert at accessing voice messages and cracking any security (such as PIN numbers) that a victim might have put in place. The police had pounced. The two men went to jail, and News International told everyone—press, Parliament, police, and regulator—that Goodman was a lone rotten apple. The editor, Andy Coulson, resigned, protesting that he knew nothing about any of it. Game over.

How We Broke the Murdoch Scandal

Guardian editor Alan Rusbridger on his dogged reporter, a U.S. ally—and a gamble that finally paid off.

murdoch-the-guardian-fe06 Dan Chung / Eyevine-Redux (portrait)
Alan Rusbridger, editor of The Guardian. Inset: Cover of The Guardian after the scandal.
Every so often—perhaps once every 18 months—the veteran Guardian writer Nick Davies comes into my office, shuts the door with a conspiratorial backward glance, and proceeds to tell me something hair-raising.
In June last year he wanted to inform me about Julian Assange. He’d read that the (then little-known) snowy-haired hacker was on the run with a data stick full of millions of secret documents that the U.S. Defense and State departments had carelessly hemorrhaged. His plan was to track him down … and then The Guardian would publish them all. Good idea?
Early in 2009 there had been a similar moment. He’d discovered that James Murdoch, the son and heir of the most powerful private news-media company on earth, had done a secret deal to pay more than $1 million to cover up evidence of criminal behavior within the company. Interested?
The answer to both questions was—of course. Followed by a small inner gulp at the sheer scale and implications of the stories. Followed by the sight of Nick, invariably dressed in jeans and a defiantly unfashionable brown leather jacket, disappearing back out through the door in search of trouble.
Everyone knows how WikiLeaks ended: a global swarm of revelations and headlines, with governments the world over transfixed by the daily drip-feed of disclosures, war logs, classified cables, and diplomatic indiscretions. And now everyone knows how the Murdoch story ended: with a kind of giant heave of revulsion at what his employees had been up to, and with a multibillion-dollar merger stopped in its tracks by the most overwhelming parliamentary vote anyone can remember. A profitable newspaper selling millions of copies a week had been killed off. The British press regulator was dead in the water.
Except the Murdoch story isn’t finished. It reaches so deeply into so many aspects of British and American civic life—including policing, politics, media, and regulation—that the story will continue to play out over the months, even years, ahead. Everyone expects more arrests. There are numerous civil actions wending their way through the British courts. There will be two public inquiries—into the behavior of press and police. And who knows what trouble the News Corp. shareholders or American regulatory authorities might create the more they learn about the management of the British wing of the family business.
Rewind to July 2009 and think how different it could have been. Up to this point the official narrative was straightforward. News of the World’s royal correspondent, Clive Goodman, had been caught “hacking” the palace phones. Or, rather, he had subcontracted the job to a private investigator, Glenn Mulcaire, who was expert at accessing voice messages and cracking any security (such as PIN numbers) that a victim might have put in place. The police had pounced. The two men went to jail, and News International told everyone—press, Parliament, police, and regulator—that Goodman was a lone rotten apple. The editor, Andy Coulson, resigned, protesting that he knew nothing about any of it. Game over.

Vodafone Sees Strong Emerging Markets Growth

This article has been adapted from Fool U.K., our sister site across the pond.

First-quarter results show Europe struggling, but nice growth elsewhere.

Vodafone (Nasdaq: VOD ) may be the world's biggest mobile phone operator, but that hasn't immunized it against the economic woes besetting some of Europe's struggling economies, as we learned from the company's first-quarter update on Friday.

A fall off in demand from some southern European countries has led to growth in service revenues slowing, and that has been compounded by a reduction in mobile charges with some countries' regulatory bodies cutting mobile termination rates.

So a quarter which saw rising sales of smartphones, like the Apple (Nasdaq: AAPL ) iPhone and Google (Nasdaq: GOOG ) Android phones, only brought Vodafone a 1.5% overall increase in revenues, after the previous quarter saw 2.5% growth. But that was still a bit better than most had been expecting.

Europe struggling
Organic European revenues actually fell, by 1.3%, with sales in Spain falling by nearly 10%. But that was nicely countered by a 32% rise in sales in Turkey, with India recording a jump of 17%. Organic revenue from the Africa, Middle East and Asia Pacific region was up by 8.7%, with sales at Vodacom in South Africa growing by 7.8%.

And Germany and the UK held up reasonably well too, with the former pretty flat at 0.2% growth, and the latter up 1.7%.

Vodafone says the results were as expected and is sticking to its existing full-year guidance of an operating profit between 11bn pounds and 11.8bn pounds, with chief executive Vittorio Colao saying:

We have made a good start to the year, reporting robust results despite challenging macroeconomic conditions across southern European economies and the impact of cuts to mobile termination rates. Revenue from our key focus areas of data, enterprise and emerging markets continues to grow strongly. With our broad geographical mix and improving market positions, we are well placed for the rest of the financial year.
Dividends to come
Vodafone's forecast dividend yield stands at around 5.8%. With Vodafone telling us that its free cash flow for the quarter of 1.3bn pounds is supporting its dividend target, and with full year expectations of 6bn pounds to 6.6bn pounds of the stuff flowing in, the chances of that not happening seem pretty slim. It's among the best of the big dividends on the market at the moment.

After selling off its 44% stake in French operator SFR for the sum of 6.8bn pounds, Vodafone has seen its net debt figure fall to 23.1bn pounds. That might sound like a pretty eye-watering sum, but it is less than a third of the company's total market capitalization of 82bn pounds. And that bit of cash isn't going to be hanging around for long anyway, with a share buyback of 4bn pounds under way, which is already 10% complete.

Some might prefer a bigger attack on the debt figure, while others might like a dividend boost, but the board can presumably see the same attraction in the current share price as can those canny dividend investors who are tucking a few away in their income portfolios.

Minority stakes
And there could be a nice bit of extra cash coming Vodafone's way in the not too distant future too, from its 45% share of Verizon Wireless. Majority shareholder Verizon Communications (NYSE: VZ ) has so far been concentrating on paying down its debts, but its second-quarter results are due the same day, and observers will be hoping for some news on the commencement of dividends.

Further disposals and acquisitions were announced during the quarter, with the sale of Poland's Polkomtel to go ahead, while Vodafone has reached an agreement for the purchase of a further 33% chunk of Vodafone Essar in India, continuing the company's strategy of pulling out of minority-stake telcos and concentrating on its major holdings.

All in all, I reckon these figures underline the strength of Vodafone. Despite the tough local European economy, Vodafone will almost certainly do better than most of the continent's mobile operators, and it's clearly managing its emerging markets business pretty well, too.

The shares look cheap to me.

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