July 23 – Standard & Poor’s Ratings Services said today that the resignation
of Rupert Murdoch from several newspaper-related boards of News Corp.
subsidiaries has no impact on our ratings (BBB+/Watch Neg/–)on the company. We
believe his resignation is linked to the planned spin-off of the company’s
newspaper and other publishing businesses. Neither the spin-off, which
simplifies the complexity of News Corp.’s operating structure, nor Rupert
Murdoch’s resignation alleviate governance-related risks surrounding allegations
of phone-hacking and improper payments to government officials at News
International, in our opinion. Assuming a successful spin-off, we have made no
assumption regarding the spun-off publishing entity’s ability to indemnify the
remaining entertainment entity from any legal liabilities that could arise
relating to allegations of phone and e-mail hacking and improper payments to
public officials.
