Murdoch buries the lead as reshuffle has Hartigan bowing out at News Ltd

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Murdoch buries the lead as reshuffle has Hartigan bowing out at News Ltd

By Malcolm Maiden

RUPERT Murdoch underplayed a key move of his own in his announcement that John Hartigan would step down as chairman and chief executive of News Ltd, News Corp's Australian arm, to be replaced by Foxtel's boss, Kim Williams. It is that he will become chairman of News Ltd.

Hartigan's departure and Williams's appointment are fascinating, coming as they do as an inquiry into Australian media kicks off amid rancour between News, the Gillard government and the Greens, as News Corp grapples with the fallout from the telephone hacking scandal in Britain, and as it erects a pay wall around its Australian flagship, The Australian.

Kim Williams can be expected to accelerate News's shift to multi-platform, income-generating content delivery.

Kim Williams can be expected to accelerate News's shift to multi-platform, income-generating content delivery.

Hartigan moved carefully on the pay wall. People close to him say he thought Australia had a more developed display advertisement revenue stream than News did overseas, and was keen to protect it.

As head of News here, he also had responsibility for a relationship with Canberra that has deteriorated seriously.

Williams brings a fresh angle to both issues. His background is television and digital broadcast technology, not print, and he can be expected to accelerate News's shift to multi-platform, income-generating content delivery.

His management style is less aggressive than News executives in the past - asked to describe it, he once said he considered himself ''a modern manager'' - and he is unlikely to worry too much that his lack of print media experience will count against him inside the group.

Williams will tell his new employees that he supports good journalism wherever it appears, and he will back himself to increase News's reach by delivering content across platforms. He is also a consummate networker: he will seize the opportunity if it presents itself to rebase News's relationship in Canberra.

One of the oddities created by the latest move is that former Foxtel bosses are now in charge of News Corp's two main print businesses. In July this year, Williams's predecessor at Foxtel, Tom Mockridge, took over as head of News's UK arm, News International, after Rebekah Brooks resigned over the telephone hacking scandal.

But for followers of News Corp outside Australia, another key change buried inside the announcement that Hartigan had stood down in favour of Williams would have been of particular interest. Hartigan had been both chief executive and chairman of News Ltd, but only the CEO role passes to Williams: the new chairman is Rupert Murdoch.

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It is a non-executive role, but Murdoch and his family control News Corp, and he is moving into the chair here at a time when non-aligned shareholders are clamouring for him to step back from the dual role as CEO and chairman of the parent, News Corp.

That may not be contradictory however. Hartigan served as CEO of News Ltd for several years before he also took on the chairman role. And as chairman of News Ltd, Rupert Murdoch will be spending more time in Australia, and less time in New York, where News Corp is headquartered.

That could fit with what insiders say is the medium-term plan, for Murdoch to relinquish the role of CEO of News Corp in favour of the group's chief operating officer, Chase Carey, and retain the non-executive role of chairman. The local change might in fact be a precursor of it.

MORE than ever, Christmas is make or break for Bernie Brookes. The Myer CEO kicked Myer's shares 6.4 per cent higher yesterday by announcing a moderating sales slide and maintaining guidance for flat full-year sales and a profit decline of up to 10 per cent, but the key assumption is that last year's Christmas and New Year sales shocker will not be repeated. Left-brain logic tells you Brookes is beginning to look secure on the prediction. Right-brain intuition tells you he is just making an educated bet.

Myer's sales for the 13 weeks to the end of October were $681.4 million, 3.5 per cent down on the same quarter last year, and 2.7 per cent lower excluding sales of electrical goods that Myer is phasing out.

Brookes says trading conditions improved as the quarter progressed, and that in the final month Myer actually posted positive total sales versus October last year, albeit still slightly down on a same-store basis. He says he doesn't expect floods to ruin Christmas again as they did last year when Myer's sales slumped 7.4 per cent, says early sales of Christmas goods are solid (they were terrible at this time last year) and says last week's Melbourne Cup day rate cut was a boost.

Yesterday's Westpac consumer confidence survey, conducted just after the rate cut, did show a solid rise in consumer sentiment, for the third straight month. But confidence is still 6.7 per cent lower than it was a year ago, and that's correct weight: the world is less predictable than it was this time last year.

Europe's dilemma - it's buried beneath a debt mountain that can only be attacked by policies that crush economic growth, reducing debt-service capacity and inviting a bond market attack on the weakest states that pushes debt refinancing costs even higher - is much more starkly drawn.

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And the sovereign debt crisis is still threatening to engulf Italy and its €1.9 trillion debt load, a problem too big for Europe to bail out, even if it succeeds in boosting its main bailout fund to €1 trillion, as planned.

News that Italian Prime Minister Silvio Berlusconi will stand down as part of a deal to push through another round of fiscal reform sparked a resignation rally yesterday, but Italy's dire debt equation remains: if the European crisis doesn't ease, Myer's Christmas won't be merry.

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