Murdoch Stock Loss Nears $1 Billion in Hacking

Rupert Murdoch’s family has lost almost $1 billion from the drop in News Corp. (NWSA) stock since the phone-hacking scandal erupted into the headlines and led to the arrest of the company’s top U.K. newspaper executive.

The value of the family’s News Corp. holdings fell to about $4.96 billion today in U.S. trading, from almost $6 billion at the July 1 close, according to data compiled by Bloomberg, before reports that News of the World had hacked into the voicemail messages of murdered U.K. teen Milly Dowler.

The loss of $977 million represents a drop of 16 percent, highlighting the financial consequences for the Murdoch family. Rebekah Brooks, the former chief of Murdoch’s U.K. newspapers, resigned last week and was arrested by police yesterday. At stock’s lowest today, the decline was $1.03 billion.

The fallout has also touched high-level politicians and police officials in Britain. Metropolitan Police Commissioner Paul Stephenson resigned yesterday because of “accusations” about police links to News Corp. (NWS)’s U.K. unit and its hiring of a former journalist at the tabloid as a consultant. Prime Minister David Cameron cut short a trip to Africa to prepare for a statement to Parliament on July 20.

Police are probing allegations of widespread hacking of crime victims, dead soldiers, politicians, celebrities and royal-family members at the now-defunct News of the World. They are also investigating allegations of police bribery.

Brooks, Rupert Murdoch, who is chairman and chief executive officer of the New York-based company, and James Murdoch, who is deputy chief operating officer and chairman of News International were scheduled to appear before parliament to respond to questions.

Trust Holdings

Standard & Poor’s today put News Corp. debt on “creditwatch with negative implications,” because of risk associated with the investigation.

“The U.K. legal process has expanded and pressure from U.S. lawmakers has increased for an FBI probe” of possible phone hacking in the U.S., S&P said in a statement.

News Corp. Class B voting shares fell 69 cents, or 4.3 percent, to $15.40 at 4 p.m. New York time in Nasdaq Stock Market trading, after dropping to $15.23 earlier. The Class A nonvoting shares declined 68 cents, or 4.3 percent, to $14.97, above the intraday low of $14.76.

Through a family trust, the Murdochs own 306.6 million shares, or 38.4 percent, of News Corp.’s Class B voting stock, according to the company’s proxy statement. Including other family holdings, Rupert Murdoch controls 39.7 percent of the voting power, filings show.

Collectively, Rupert Murdoch, his sons James and Lachlan and the trust hold 5 million shares of the Class A nonvoting stock, according to data compiled by Bloomberg.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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