Moody’s says that it will not change its rating on News Corp, in the wake of a UK parliamentary report this week that was highly critical of the behaviour of the company during the phone-hacking scandal.
The credit ratings agency said that News’ strong cash position and free cash flow generation insulates it from any uncertainty about whether there will be additional fallout from the scandal.
“Ultimately, upon cutting through the highly politicized hyperbole, and honing into the potential total financial impact of the proceedings, so long as we believe that the company is able to mitigate potential costs by its significant liquidity and financial flexibility, there is no change warranted in its credit ratings or stable outlook.”
Moody’s added: “The report, issued by UK’s Culture, Media and Sport Committee, which denounces News Corp Chairman and CEO Rupert Murdoch as ‘unfit’ to lead the company, represents an opinion without any direct regulatory implications.”
However, Moody’s did say that the report could impact communication regulator Ofcom’s investigation into News Corp’s ability to own assets including BSkyB, but the pay TV operator’s results are not consolidated into those of News Corp so a sale would not impact the company’s rating.