News Corp racked up $87m of legal fees in final quarter of 2011
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The News of the World phone-hacking scandal cost parent company News Corp $87m in the last quarter of 2011.
The company’s financial results for the last quarter of 2011, announced to the London Stock Exchange last week, show $87m costs related to “the ongoing investigations initiated upon the closure of The News of the World”.
The total cost of the investigations, which span the last six months of 2011, was $104m. According to the stock exchange announcement, around 85 per cent of the charges relates to “fees to outside lawyers and advisers working on various investigations and committee hearings in the UK”, while the rest was spent on settlements to hacking victims.
The company declined to speculate on what the total cost of the hacking scandal might be.
In the three months leading up to 31 December the company’s revenue grew 2 per cent, to $8.98bn, while operating income grew 16 per cent, to $1.50bn.
Readers' comments (1)
Dr. Harry J. Maue | 16-Feb-2012 4:20 am
I think News Corp needs to retain the services of a professional legal auditing company. This needs to be done very soon in order for all bills already incurred and paid and those waiting payment. All fees and expenses need to be audited against the company's billing guidelines assuming News Corp has them in place. In the absense of such comprehensive billing guidelines there other industry standards that can be utilized. Every operation and department at News Corp falls under some type of oversight and this should apply to the legal department. This process is not used to punish a law firm(s) but to insure that all fees and receipted expenses are verified and thereby insuring the firms are incompliance. This is basically a win-win for all parties involved because if the audit report concludes that all fees and expences are compliant then this will only serve to further the relationship. If the fees and expenses are found not to be compliant then it depends on the degree of the violations and what the company wants to do with the audit findings. In my 30 years of reviewing legal fees and expenses in the absense of fraud then the law firm(s) are usually given to correct these billing anamolies and it becomes a learning experience for everyone. The bottom line it is just the right thing to for the company and all the many stockholders.
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