WSJ deal for sales at one euro-cent 'is a new question for News Corp'
Controversy this week over a circulation deal for the European edition of the Wall Street Journal, which saw copies sold for one euro cent, could according to analysts, "carry outsize influence among investors already concerned about ethical practices at the company" the New York Times has reported.
Rupert Murdoch
Britain's Audit Bureau of Circulations said it was reviewing a circulation arrangement for the WSJ in Europe. Under it, The Journal used a third party to channel money to a Dutch consulting firm, which bought thousands of copies of The Journal each day for as little as one euro cent. The practice helped boost The Journal’s sales figures in Europe.
This issue is minor compared with the phone hacking scandal in Britain , said the Times but the paper claimed, "it further complicates matters for the leadership at News Corporation as it prepares for its annual shareholder meeting next Friday." The Times's own international edition the International Herald Tribune is in direct opposition to the Journal.
Doug Creutz, a senior analyst at the Cowen Group, told the NYT, “No news of impropriety at News Corporation is a blip when they’re under such scrutiny.This adds to the general question of how the company is being run.”
He claimed several independent investor advisory groups had recently recommended that shareholders vote against some members of the News Corporation board, “especially those whose name ends in Murdoch.”
Rupert Murdoch is the chairman and chief executive of News Corporation, and his sons James and Lachlan, have large roles in the company.
The publisher of The Wall Street Journal Europe, Andrew Langhoff, resigned on Tuesday after an internal investigation revealed that the circulation deal also gave the Dutch company, Executive Learning Partnership, two positive articles in exchange for its financial support.
“We have always been transparent with the A.B.C., and they have certified this programme over recent reporting periods,” said Dow Jones & Company, which owns The Journal, “We plan to meet with them soon and review all the details with them again.”
Sales for the The Wall Street Journal Europe have remained at around 75,000 since 2008, according to the British ABC.
The International Herald Tribune, distributed globally, had a daily circulation last year of 217,700. It is believed to rely on bulk deals for about 50% of its daily circulation .