Moody's: News Corp. Scandal Won't Affect Credit Rating
Affected Businesses Are Only Minor contributors To Company's Overall Revenue, Earnings
Jon Lafayette (Broadcasting & Cable) -- Multichannel News, 7/19/2011 11:10:39 AM
Moody's Investors Service Tuesday said it doesn't think that phone hacking scandal will affect News Corp.'s credit ratings.
The ratings agency said that the businesses most affected by the scandal, notably its British newspapers, are minor contributors to the company's overall revenue and earnings.
It added in a statement that it does not believe that the company's other segments will "suffer materially from loss of confidence as happens with many business-to-business operations."
"It is likely that advertisers will remain attracted to the company's stable cable and broadcast network viewership, that the general public will continue to see the company's films and television shows on an uninterrupted basis, and that the bulk of the company's businesses will not be influenced by the negative media headlines about the company," said Neil Begley, a Moody's senior VP.
Begley added that CEO Rupert Murdoch has had a positive influence on the company's credit rating. "Any change in governance from this perspective would cause uncertainty and could potentially outweigh for bondholders any perceived benefits of new leadership resulting from the scandal," he said. There have been reports News Corp. was considering making COO Chase Carey CEO.
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