The UK phone hacking scandal rocking Rupert Murdoch’s media world will not result in any change to News Corporation’s second largest shareholder’s “strategic investment”, according to Prince Alaweed bin Talal bin Abdulaziz Al Saud.
The Saudi billionaire told Reuters yesterday (10 July) that the commitment in News Corp by Kingdom Holding, which controls 7% of News Corp votes, is not in jeopardy - despite the decision by Mr Murdoch to close the most widely read newspaper in the UK after sickening accusations its journalists hacked the phones of a murdered teenager and victims of terrorist acts.
"The crisis does not make Kingdom Holding blink at all. It makes our partnership stronger," Prince Alaweed bin Talal is quoted as saying by Reuters.
The investments between the Saudi billionaire and News Corp are reciprocal. The Saudi conglomerate Rotana Media, which is owned by Kingdom Holding, has recently had a US$35 million cash injection from News Corp, which raised its shareholding by 50% to 14.53%.
News Corp took a 9.09 stake in Rotana Media for $70 million at the start of 2010. The deal forged then provided Rupert Murdoch’s group with an option to double its holding within 18 months – a facility it drew upon in May 2011.
"Since the crisis erupted I have been in touch with them [News Corp] to contain this problem," Prince Alaweed bin Talal told Reuters. "Their decision to shut down this tabloid [News of the World] in England is supported by me because we have to put this issue behind us."
There is mounting speculation the decision to close the British tabloid came in order to save News Corp’s intended full takeover of BSkyB – a move which is now facing serious opposition from Members of Parliament in Westminster.
For the EMEA region, News Corp plans to launch Sky News Arabia - an Arabic language version of BSkyB’s 24 hour rolling news channel – free-to-air in spring 2012. News Corp already broadcasts 12 channels in the Middle East and North Africa through its Fox International Channels arm, in addition to its Sky News channel which is available locally on pay-TV platforms.
Analysts had predicted the increased shareholding in Rotana Media would help News Corp to further expand its televisual presence in the Arab world, given the potential offered by a youthful audience sharing a common language.