News Corp. Investor Prince Alwaleed Believes "Too Much is Made" of Phone-Hacking Scandal
The Stockholder in the Sand
Excerpt from Vanity Fair, March 21, 2013
... The ties between Alwaleed and Murdoch run deep. Alwaleed owns 56.2 million shares of Murdoch’s News Corporation; News Corporation, in turn, owns a 19.9 percent stake, worth around $150 million, in Rotana, Alwaleed’s privately held pan-Arab media conglomerate, based in Bahrain. As much of the world knows by now, last year was not a good year for Murdoch. Due to a phone-hacking investigation into his British newspapers, he was forced to close the major London tabloid News of the World, abandon his bid for control of the satellite network BSkyB, shunt aside his younger son and heir apparent, James, and testify before Parliament about the company’s abuses of power. Some 32 people, most of them former and current News Corp. employees, have been arrested since the phone-hacking scandal was uncovered.
The scandal upset Alwaleed deeply. On Bastille Day 2011, speaking on a BBC television program, he said Rebekah Brooks, then the C.E.O. of News International (the British newspaper division of News Corporation), “has to go. You bet she has to go.” The next morning Brooks, who was subsequently arrested and charged with conspiracy to commit misconduct in public office, resigned. “I was the first one that said Rebekah had to resign,” Alwaleed told me with pleasure.
But since then, Alwaleed has not called for any more heads. He remains supportive of 40-year-old James. “James is not my partner only in News Corp.,” Alwaleed said. “He’s also my partner in the Rotana. . . . He’s a highly ethical, professional, decent man. I think of his honesty. I’m thinking of him. I know him very well.” They are texting pals, and James is on his speed dial.
Alwaleed believes too much has been made of the scandal—“Let’s not blow this out of proportion,” he advised me as tea was served. “Mistakes do happen. We correct them and life goes on.” He is impatient that the whole mess be resolved. “I don’t like what happened,” he admitted, “and that’s why I go to the members of the board and tell them we have to get this behind us as quickly as possible . . . I cannot tell you everything is fine. No. I want these issues behind us as fast as possible. I say the message to them confidentially, and I say it now on the record. Definitely.” He takes some satisfaction that the News Corporation stock price is up some 50 percent in the last year. “One rotten apple, a small apple, is not going to ruin the whole batch, and the shareholders in News Corp. are still accepting the situation, and they have not penalized the company at all,” he continued. ...