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Rupert Murdoch — losing his grip

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Rupert Murdoch proudly renounced his Australian citizenship, yet he still likes to micromanage Australia's political system through his newspapers and editorial tweets

Rupert Murdoch's grip on News Corp is slipping as investors build a revolt against the cross-subsidisation of its unprofitable print propaganda arms in Britain and Australia, writes Rodney E. Lever.

RUPERT MURDOCH'S GRIP on newspapers is collapsing. Described as the most powerful owner of news in the English speaking world, his shareholders are building a revolt against the use of his personal power over their investments in his company.

The company leading the revolt is the powerful Nathan Cummings Foundation — a Jewish investment house that started Consolidated Foods and the Sara Lee baking company a century ago, and now is one of the biggest investment houses in Wall Street, New York.

A Swiss investment bank has advised its customers that News Corporation's Australian and British newspapers are smothering potential returns to its investors. The report declares that the company would add about U.S. $2 billion to its annual revenue if Murdoch closed the newspapers. This sum would treble the company's gross revenue, based on the 2014 results.

Shareholders have been robbed of their potential annual income entitlements just because of Murdoch's personal interest in newspapers and the power he is able to use against certain politicians and to determine his preferred election outcomes.

The phone hacking scandal in Britain and his interference in democratic government in Australia and the U.S. are bleeding the returns that properly should go to shareholders. These things have led to the denigration of his newspapers in Britain and Australia.

The Saudi Prince Alwaleed bin Talal, who denied before last year's shareholder meetings that he was selling his News Corporation shares, has now revealed that last year he sold his down his 40 per cent voting shares to a minimal 14 per cent holding, to maintain his arbitrage status in the company.

Murdoch is himself showing signs that he recognises that his family interests are not in newspapers any more. Publishing books and selling real estate through the internet, as well as movies and TV should allow the company to thrive without being dragged down by money-consuming newspapers that more and more people no longer want to read any more because of their political bias and inaccurate and misleading reporting.

Meanwhile, another headache for Murdoch has come from group of investors with shares in Murdoch's 21st Century Fox movie studio and his Fox TV are grumbling about Murdoch's full control of nearly 40 per cent of voting rights while he actually holds only a 12 per cent equity.

These shareholders are planning to challenge Murdoch at the company's next annual general meeting to demand a fairer distibution of voting rights to give them more say in the operations of Fox.

They are threatening to challenge his position as both chairman of the company as well as being chief executive and to demand that his level of complete control be substantially degraded.

You can follow Rodney E. Lever on Twitter @RodneyELever.

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