News Corp. seeks FCC declaratory ruling on splitting company


News CorporationWe knew that Rupert Murdoch and company are considering splitting their broadcast and newspaper groups into two separate entities. It’s asking the FCC if all of its shareholders can vote, even the foreigners, and now the FCC wants your opinion.

News Corp. says it has a single, one-time and one-time only decision to make: Amending its Restated Certificate of Incorporation to facilitate the excision of its non-broadcast interests form the rest of the company.

The company would like to allow all of its public shareholders to exercise their franchise on the matter, but believes it would bang into the section of the Communications Act which restricts the involvement of foreign interests in FCC licensed-entities, which would be the collection of O&O television stations in the Fox group.

The FCC responded to the 8/9/12 request from News Corp. by saying, “In light of the unique nature of this request and its public interest implications, we invite public comment on the petition from interested parties.  Comments will be due on October 15, 2012.  Oppositions will be due October 30, 2012, and Replies will be due on November 7, 2012.  The shareholder meeting in which the vote will be taken is scheduled for January 2013.”

RBR-TVBR observation: Our opinion: This is no big deal. It is not a sense of the corporation vote on the editorial slant or programming quality of the television group, it is strictly a business decision, and a one-time FCC waiver of the rules should not cause any harm. And on the other hand, we fully expect the shareholders to go along with News Corp. executives on this matter, so if the foreign shareholders don’t get to vote, we highly doubt the outcome would be any different than if they did.

But we do fully expect one result: The watchdogs that have been hounding News Corp. on grounds that it lacks the requisite character to own a broadcast license, particularly in the wake of the hacking scandal in the UK, will take advantage of yet another opportunity to make their case.