U.S. regulators are investigating major U.S. movie studios' dealings with China as the entertainment companies try to get a greater foothold in one of the fastest-growing movie markets in the world.

The Securities and Exchange Commission has sent letters of inquiry to at least five movie studios in the past two months, including News Corp's 20th Century Fox, Disney, and DreamWorks Animation, a person familiar with the matter said.

The letters ask for information about potential inappropriate payments and how the companies dealt with certain government officials in China, said the person, who was not authorized to speak publicly about the letters.

The Chinese film market is seen as one of the largest potential markets for Hollywood, but it has also historically been tightly controlled by the state-owned China Film Group.

China Film Group had limited foreign films to 20 per year, but it eased some control in February of this year, after China's leader-in-waiting Xi Jinping, who is known to admire some American movies, spent a week in Washington.

Vice President Joe Biden and U.S. Trade Representative Ron Kirk hailed the deal, which allows 14 premium format films, such as IMAX or 3D, to be exempt from the quota, as will the 2D versions of the films.

Also in February, DreamWorks Animation announced a landmark deal of its own in which it will build a production studio in Shanghai with some of China's biggest media companies.

DreamWorks Animation found success in China last year with "Kung Fu Panda 2," which became the highest-grossing animated movie in China with ticket sales of about $100 million.

China Film Group did not respond to repeated requests for comment. Representatives of DreamWorks, Disney, and News Corp declined to comment.

A spokesman for the SEC declined to comment.

The inquiry reflects stepped-up scrutiny from the SEC and Justice Department into potential violations of the Foreign Corrupt Practices Act, a 1970s law that bars U.S. companies and individuals from paying bribes to officials of foreign governments.

U.S. authorities have active bribery investigations into high-profile companies including Avon Products and Hewlett-Packard Co. News Corp is also separately under investigation for alleged bribery at its UK media properties.

Wal-Mart Stores, the world's largest retailer, has disclosed to the SEC and DOJ an internal investigation, and lost $10 billion of its market value on Monday after the New York Times reported on allegations of widespread bribery in Mexico. All of the companies have previously said they are cooperating with federal authorities and investigating the allegations.

EASING THE MARKET OPEN

While U.S. box office sales dropped some 5 percent to around $10 billion last year, Chinese box office revenue grew roughly 35 percent to $2.1 billion.

Much of the revenue came from 3D titles, a rapidly growing sector of the film industry, making China an even more desirable market.

U.S. movie studios have long been frustrated with China's tight restrictions on foreign films, which they say helps fuel demand for pirated DVDs that are widely available in China.

But recently the dynamics within the Chinese market have shifted.

China's booming middle class is increasingly willing to pay tickets prices for a cinema experience, forgoing cheap pirated DVDs and free internet downloads.

Also, Xi's visit to Washington and then Los Angeles in February was quickly followed by the deal that loosened China's annual quota on foreign film imports.

That pact also strengthens opportunities to distribute films in China through private enterprises rather than the state film monopoly.

Hollywood has struck a flurry of deals since the deal was reached.

Besides DreamWorks Animation's plan to build a production studio in Shanghai, Disney announced last week that the next "Iron Man" film will be co-produced in China under a joint agreement between Disney, its Marvel Studios arm and China's DMG Entertainment.

Disney had also announced earlier this month that it would work with China's Ministry of Culture and Tencent Holdings to promote the animation industry in China.

SWEEPS

U.S. anti-corruption regulators have specifically focused their interest in countries like China, where much of the economy is state-run.

Since 2002, the United States has brought around four dozen FCPA enforcement actions related to corruption in China, second only to those involving Nigeria.

The SEC has also initiated several so-called industry sweeps for potential foreign bribery across an industry. Last year, for example, it sent letters to a handful of banks and private equity funds and said it was investigating possible FCPA issues in their dealings with sovereign wealth funds.

"Typically those (sweeps) arise where the agencies, most commonly the SEC, see a situation in a particular company that it believes for some reason may reflect a broader practice or pattern in the industry," said Homer Moyer, a partner with Miller & Chevalier who has worked on FCPA issues for decades.

But U.S. regulators have brought few cases in the entertainment industry. In one of the few actions targeting the movie industry, the Justice Department in 2008 charged Gerald and Patricia Green, a husband and wife pair of film producers, of bribing government officials in Thailand in order to run a film festival there.

The Greens were convicted in 2009 and served six months in jail.

(Reporting By Aruna Viswanatha with additional reporting by Lisa Richwine in Los Angeles, and Ben Blanchard and Michael Martina in Beijing; Editing by Karey Wutkowski and Tim Dobbyn)

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Here's the cover of tomorrow's Daily Telegraph in Britain. Click for the story:

(Via Benedict Brogan)

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For those in the US, we have to wonder sometimes if the Leveson Inquiry — the government investigation opened last year into the conduct of press following the discovery of widespread phone hacking by Rupert Murdoch's now defunct News of the World — is really worth paying attention to. It seems to be dragging on forever, and, wow, that livesteam starts early.

This afternoon, as James Murdoch continued a testimony that had been rather sedate in the morning, he proved it was worth paying attention to. Definitely.

The revelations that have come out today seem to imply that David Cameron's Conservative government essentially made a deal with Rupert Murdoch's British newspapers — in return for your wonderfully powerful newspapers' support, we will let you take over 61% of BSkyB, a television company that would give the Murdoch's a near-monopoly status in British media.

Murdoch admitted, in his cautiously imprecise manner, that yes, he had discussed the BSkyB takeover with David Cameron in 2010  — just 2 days before Cameron removed Business Secretary Vincent Cable from power over the deal after he was secretly recorded saying he was "at war" with Murdoch.

Cameron, had of course, refused to comment on that in the past.

If that revelation wasn't enough, Murdoch went on to discuss a huge number of emails that showed a correspondence between advisors to man who replaced Cable in handling the deal, Jeremy Hunt, and the man in charge of his News Corps public affairs in the UK, Frederic Michel.

These emails appear to imply a very close, potentially illegal, secret relationship — with clear talk of "shared intentions", perhaps-joking references to "illegal" deals, and even a trip to see a boy band in concert together.

Those emails are online and British journalists have spent an entire day picking through them. Rumors started before they were even out that Hunt was going to have to resign (at the time of writing he has not).

For the Murdochs, the scandal perhaps couldn't be working out better. They're already well out of favor with the British public, and the controversy engulfing the British government delays more questions about their own complicity in phone hacking and the subsequent cover-up..

Indeed, some are beginning to wonder if this is a "scorched earth" tactic — and if so, how far will it go.

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Any business owner thinking of bringing her children into the business must watch the unfolding Murdoch epic with fear and loathing. This week, James Murdoch is being grilled by the Leveson inquiry which was set up to investigate the British media in light of the phone hacking scandal that has rocked British journalism, led to several arrests, and the resignation of James Murdoch from his United Kingdom board and executive roles.

Grilled first by parliament and now by the ongoing inquiry, Murdoch Jr. looks like any business founder's nightmare: the entitled son. From his every facial expression, his distaste for challenge and the peremptory tone with which he answers questions, his second-rate performance makes it clear that he doesn't really believe that anyone has the right to ask about his father's business. Wholly lacking in presence, his sulky attempts to display strategic insight give the game away. It's obvious that he occupies a senior role in the corporation not by rights but through kinship.

Family businesses have special demons and unique strengths. They're more likely to endure than other kinds of business. Kongo Gumi, in Japan, is the oldest continually-functioning business; it started out building houses some 1,400 years ago. There are many explanations for the longevity of family firms: their commitment to the long term over the short term, a sense of legacy and tradition, a necessary talent for managing conflict effectively.

An equally-powerful-but-opposite model of family companies persists however: The one that says the first generation builds what the next generation wastes and destroys. Having grown up with wealth, power, and influence, inheritors squander what their parents, or grandparents, have built and, bereft of their work ethic, realize too late that no one is owed success.

So how should successful entrepreneurs think about their children's role in the business? Rupert Murdoch is a charismatic and ingenious entrepreneur. His son James displays none of those characteristics and Rupert's public favor of his children over professional management has sent a clear signal to ambitious employees and investors alike. This is a family company, family gets priority, and everyone else's interests will always come second. This has disenchanted many investors and it has cost News International some of the media's most brilliant executives. More damaging still, the power structure within this organization has made it clear that advancement is not based on merit. Family ties and loyalty count disproportionately. One reason the company has been dogged with questions about its ethics is because it's clear that nothing matters more than pleasing the owner or his heirs.

Such family preference has distorted the company wildly. It has also sent a signal that, while merit clearly counts, it isn't the only thing that matters. And it has exposed a high profile leader, in the form of James, who lacks the presence required to pull off public appearances successfully. These are all, in effect, object lessons of the perils of preferring your children.

What interests me even more, perhaps, than the Murdoch family soap opera is that the very best companies I know almost invariably are described as being like a family. Employees feel that there is a long-term vision at play. They appreciate that loyalty and commitment operate two ways, not just one. I routinely hear stories about such companies standing by individual employees during tough times and it's clear they're repaid, many times over, for treating people like people.

Moreover, every entrepreneur I've ever known sooner or later talks about the company as being her 'baby,' something they love and nurture, devote disproportionate amounts of time and attention to. But what strikes me about these companies is that while they may feel familial, their owners recognize that the ultimate good you can do any business is to prioritize talent and ethics above everything--and everyone--else.

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The British parliamentary select committee investigating phone hacking at News Corp.'s tabloids in London has concluded that Rupert Murdoch is "not fit" to run his newspaper empire.

It is not clear what legal consequences the conclusion has, but Bloomberg reports that it increases the chances that the U.K.'s broadcast TV regulator could strip Murdoch of some of his TV holdings.

• You can download the full 125-page report here.

Here's the most damning paragraph (emphasis added):

"On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited willful blindness to what was going on in his companies and publications. This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company."

See Also:

Read James Murdoch's Emails And See For Yourself Whether He's Lying About Phone Hacking

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LONDON (AP) — News Corp. chief Rupert Murdoch must take responsibility for serious failings that caused Britain's tabloid phone hacking scandal, lawmakers said Tuesday in a scathing report — as a narrow majority also insisted the tycoon was unfit to lead his global media empire.

In a report on the malpractice at Murdoch's now shuttered News of The World tabloid, legislators accused Murdoch and his son James of overseeing a corporate culture that sought "to cover up rather than seek out wrongdoing."

Parliament's cross-party Culture, Media and Sport committee unanimously agreed that three key News International executives had misled Parliament by offering false accounts of their knowledge of the extent of phone hacking — a rare and serious censure that can see offenders hauled before Parliament to make a personal apology.

The panel said the House of Commons would decide on the punishment meted out to the three executives: New York Daily News editor Colin Myler, a former News of The World editor; the British tabloid's longtime lawyer Tom Crone and Les Hinton, the former executive chairman of News International, former publisher of The Wall Street Journal and former board member of The Associated Press.

Members of the panel said Rupert Murdoch, 81, had insisted he was unaware that hacking was widespread at the News of The World, blaming his staff for keeping him in the dark. That explanation was not accepted.

The legislators said if that was true, "he turned a blind eye and exhibited willful blindness to what was going on in his companies."

In a ruling opposed by 4 Conservative Party members of the 11-member committee, the panel cast serious doubt on Murdoch's credentials as an executive.

"We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company," the report said.

The judgment on Murdoch implies that News Corp., which he heads, is also not fit to control British Sky Broadcasting, in which the company has a controlling stake of 39 percent.

Ofcom, the broadcast regulator, said it is reading the report with interest.

"Ofcom has a duty ... to be satisfied that any person holding a broadcasting license is, and remains, fit and proper to do so," the statement read. "Ofcom is continuing to assess the evidence."

Louise Mensch, a Conservative Party member of the panel, told reporters the committee had been divided over the harsh criticism of Murdoch. Four Conservative members opposed the suggestion that Murdoch was unfit to lead a global company, but that stance was endorsed by four Labour Party members and one Liberal Democrat. The panel's chairman, a Conservative, did not vote, in line with convention.

Conservative panel member Philip Davies said the conclusion was "not only over the top, but ludicrous."

Legislators agreed, however, that Murdoch's son 39-year-old son James, a former News International executive chairman, was also badly at fault in the scandal. They said phone hacking at the tabloid dated back to at least 2001, and insisted that James Murdoch could have halted the practice as early as 2008.

"As the head of a journalistic enterprise, we are astonished that James Murdoch did not seek more information," legislators wrote.

But they stopped short of accusing the younger Murdoch of misleading lawmakers when he claimed not to have fully read a 2008 email which he had received and outlined that hacking was widespread.

The committee also criticized Hinton, who worked as a top Murdoch aide on both sides of the Atlantic for decades and resigned as the publisher of The Wall Street Journal last year amid the hacking scandal. The report said he misled them over his repeated claim that hacking was not rife at the News of The World.

Myler and Crone had also failed to present factual accounts of what they knew, the report said.

In a statement, Myler said he stood by his evidence and believed ongoing U.K. police inquiries would "establish the truth" of his account. "I have always sought to be accurate and consistent in what I have said to the committee," Myler said.

Committee chairman James Whittingdale said "it is for the House (of Commons) to decide what consequences follow" from misleading Parliament.

News Corp. said it was "carefully reviewing the select committee's report and will respond shortly."

"The company fully acknowledges significant wrongdoing at News of the World and apologizes to everyone whose privacy was invaded," it said in a statement.

News Corp. has been buffeted by the scandal, which has claimed the jobs of a string of his senior executives and several top British police officers amid allegations that Scotland Yard failed properly to investigate tabloid wrongdoing for years.

Murdoch closed down the 168-year-old News of The World tabloid last July amid public revulsion at the hacking of voice mail messages of celebrities and victims of crime, including murdered schoolgirl Milly Dowler.

A total of 43 people, including at least 25 past and present employees of News International have been arrested by police investigating phone hacking, bribery and computer hacking. Murdoch has paid out millions to settle lawsuits from about 60 celebrities, sports stars, politicians and other public figures whose voice mails were hacked. Dozens more lawsuits have been filed.

It was not clear what impact Tuesday's report would have on Murdoch's key U.S. properties, which include The Wall Street Journal and Fox News.

___

Associated Press Writers Jill Lawless, Bob Barr and Meera Selva contributed to this report.

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It's often said that the advertising business is all about relationships. But what happens when those relationships turn sour?

Here are 10 huge fights, all involving CEOs—such as WPP's Martin Sorrell and Deutsch's Donny Deutsch—where the hatchets remain unburied.

Some are just petty. In others, like those involving Walmart's Julie Roehm and Lowe Worldwide's Frank Lowe, huge sums of money were lost.

Julie Roehm v. Walmart: The lapdance heard 'round the world.

Julie Roehm, Walmart's former advertising chief, was fired in 2006 after she was seen sitting in the lap of an exec at ad agency DraftFCB, which had paid for a $2,000 dinner at New York's trendy Nobu restaurant.

Walmart had hired Roehm to bring some rock 'n' roll to the conservative company, but Roehm's antics—the bottle-blonde once wore leather pants while pregnant—was too much for the retailer.

Roehm then sued the company claiming wrongful dismissal. She also claimed Walmart CEO Lee Scott took gifts from vendors including a number of yachts and a large pink diamond. The suit was eventually dropped.

WPP's Martin Sorrell v. Publicis' Maurice Levy: bickering like an old married couple.

The years-long rancor between WPP chief Sorrell and Publicis boss Levy is easily the most colorful fight in advertising. The pair never tire of needling each other.

In the past, Sorrell has called Levy an "amateur," "callous," and "hysterically funny." In return, Levy has called Sorrell "a little Englishman trying to stir things up" and "totally wrong" on corporate strategy issues. (The "little" barb was likely deliberate—Sorrell stands 5'4".)

More recently, in February, Sorrell's people were so angered by growth claims made by Levy that they put together a slide-by-slide rebuttal to Publicis' 2011 full year results.

Peter Arnell v. Omnicom: Give my stuff back!

Once upon a time, Peter Arnell was one of the most sought-after brand aesthetes in New York. Then his ego got the better of him. He wrote a book about how he eats 50 oranges a day and was crowned one of New York's worst bosses by Gawker.

After a string of bad calls—his Tropicana makeover was met with universal revulsion and had to be reversed by PepsiCo, for instance—Omnicom ousted him from the agency he built, Arnell Group. To make matters worse, they replaced him with his wife, Sarah. Awkward!

Arnell then sued Omnicom, demanding the company return to him his collection of vintage books and movie memorabilia. The suit was settled this year.

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It doesn't stop. Won't stop. Can't stop. Rupert Murdoch is going to be run out of Britain.

His is a worst-case scenario: a powerful political opposition moving against him, and a chain of evidence moving toward him.

I find myself feeling deeply and helplessly sorry for the man: he's cornered. He is not only "not fit" to run his company, but he's been "wilfully blind" about the company's crimes. He made a conscious and calculated decision to look the other way. Enron's former chief, Jeffrey Skilling, is in jail for innumerable years exactly for that reason.

No doubt, as I write (at 8am in New York), News Corporation is preparing a statement saying that Tuesday's damning parliamentary report is a partisan show, which, dividing 6-5, it is. And in a broader sense, too: Murdoch is as good a Labour party issue as it gets.

But that's merely identifying the problem – one of the problems. The reality is that the cost, real and psychic, of operating in the UK far outweighs the rewards. On top of that, the constant paralyzing media and legal distractions, make it virtually impossible for the company to function in the UK. Management can't manage.

Rupert Murdoch is as finished in the United Kingdom, like Conrad Black and Robert Maxwell before him. The only difference is that they can't quite get him into jail. This, in a sense, means his agony is going to be prolonged.

Understanding that Britain is a lost front, he will retreat to his US stronghold. From New York, the process of disposing of the British papers, which, by reliable insider accounts, has begun, will hasten (meaning less qualified buyers will be considered, hardly a good outcome for British journalism); and the fate of BSkyB will be weighed.

Should they stand and fight? Can they hold on? Or is the cost insuperable, and the task impossible? They – the Murdoch family, and News Corp executives – still regard themselves as safe in New York. The seventh floor of 1211 Sixth Avenue is their bunker. Nothing less than a direct hit will take them out.

A curious thing about the various British investigations is that no American-based New Corp executives have been called to testify. While it is true that the British papers operated as remote outposts, with, often, only Murdoch himself as their connection to company headquarters, it is the people in New York – probably, only the people in New York – who can establish what Rupert knew and when did he know it.

Even to the extent that figures in the UK might testify about their direct conversations with Rupert, he will be able, as he did before the Leveson hearing last week to brush them off, and counter-accuse. (This is especially easy because, for most of the period of the phone hacking scandal, Rupert did not receive email and was still only dealing on the phone.) It's only the people in New York who can't be dismissed as cover-up participants out to save their skin. (They would know what Rupert was thinking because he is something of a non-stop monologist. If it's on his mind, he's talking about it.)

It is not clear if there is even a way for the Brits to get the Americans to Britain to testify. Indeed, it is possible to imagine a scenario where people from News Corp never go to United Kingdom again. Surely, Les Hinton, whom the parliamentary report identifies as a scandal linchpin, and whom Murdoch himself seemed ready last week to blame for the cover-up, will not be planning a British vacation any time soon.

There is a great deal of solace at News Corp in the fact that phone hacking and the problems in Britain remain a largely special-interest story in the US. Even Tuesday's charge that Murdoch might have wilfully ignored what his company was doing in the UK is not so bad because few people in the US actually know what it was his company was doing.

A big danger, perception-wise, is if James Murdoch is indicted in Britain, or, if Rebekah Brooks testifies against the Murdochs. But James' retreat from the UK has been a careful one – a clean enough break, they hope, for him to slip the noose.

Another variable is BSkyB. What happens to the News Corp share price if they are forced to sell their cash-rich 39% position? News Corp watchers point to the fact that News Corp shares significantly advanced after the company abandoned the effort to acquire the rest of BSkyB. (What's more, in 2007, Rupert Murdoch was forced by John Malone, who had triangulated voting shares, to sell DirectTV, an asset then even more significant than BSkyB – and managed to spin it as an advantageous strategic sale.)

Indeed, as long as they can keep the share price stable, and stay out of the short reach of British justice, then Rupert and the Murdoch family can stay safely in control of News Corporation – as many US News Corp supporters (and there are many) believe. Even if the share price wobbles, the Murdochs have enough control to tough it out.

Unless the US government gets involved. Well, that would be another battle. They would fight that one, too.

They may know by now at News Corp that, against all of their crafty defenses, determined plans, and certain assurances to themselves (and their board), it doesn't stop and it won't. The negative pile-up has become a force of nature.

But what can they do? They don't really have any other instincts or business approach or way to respond but to resist.

• This article is not open to comment for legal reasons

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This is why it's awesome Rupert Murdoch is on Twitter:

@PhotogPhillipSo sell.

— Rupert Murdoch(@rupertmurdoch) May 8, 2012

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When 20th Century Fox announced in October 1985 that it was going to launch FOX, a fourth network in direct competition with powerhouses ABC, CBS and NBC, the channel was the laughing stock of the industry.

Click here to see the milestones >

NBC's vice president of comedy programs, Garth Ancier, left the peacock network to begin work on the new, fledgling network. At the time, NBC head Grant Tinker told Ancier he was a huge mistake.

"I will never put a fourth column on my schedule board," Ancier recalled Tinker telling him. "There will only be three."

21 years later, after the network officially launched in 1986, FOX overtook CBS as the the most popular network in America. What started out as six small stations broadcasting to 22 percent of the nation's homes branched into a network success in the early '90s.

"The fourth network"—the name that became synonymous with FOX—flipped the television model on its head, aggressively challenging how the other three networks ran their line-ups, adding unheard of weekend prime-time line-ups and stealing the NFL games from CBS.

It wasn't an overnight success—the network overcame many fails, including its first program, "The Late Show." However, FOX took smart risks, often airing what no one else dared to: "Married… with Children," Aaron Spelling's sexy soap operas "90210" and "Melrose Place," "Cops" and "The Simpsons."

Last month, the fourth network turned 25. Many of FOX's counterprogramming techniques not only led to the network's ultimate suc ces, but also helped shape television today.  

October 9, 1986: Fox's first show — "The Late Show"

Fox not only stole Ancier from NBC, it also took Joan Rivers. 

Rivers was originally named permanent host of NBC's "The Tonight Show" when Johnny Carson wasn't there. 

Given her recent success in theater and movies, Fox wanted her to do a talk show. The variety show would mimic the very essence of Carson's comedy routine complete with humor, music and interviews. However, the network needed to convince Rivers to leave a place of stability.

Despite her title as permanent host, Rivers was given a one-year contract renewal whereas Carson was granted one for two years. This didn't convince her to leave, though. In her 1991 memoir, "Still Talking," Rivers revealed what made her change her mind: 

"A real friend, [NBC vice president for special services] Jay Michelis—smuggled me a list prepared by NBC naming the ten successors if Johnny retired. My name was not on it. I almost died."

The rest is history. Rivers headlined Fox's premiere show for $15 million over the course of three years. The comedian's move from NBC to FOX gave the hopeful fourth network the publicity it needed.

Unfortunately, the show suffered from poor ratings, and Rivers was fired from the show a little over a year later after the May 15, 1987 broadcast. The show carried on with Arsenio Hall, and then Ross Shafer until its cancellation October 28, 1988.

The first show may have ultimately failed; however, having the big name of Rivers helped establish the FOX as credible for affiliates to sign.

Watch the debut episode, here.

The decision to start primetime on the weekends.

At this point, Fox still wasn't officially a network. Instead, the network was considered a large conglomerate of stations. The channel's official launch wasn't until spring of 1987, and by FCC standards, a network needed a minimum of 15 hours of programming airing on stations and affiliates.

In order to gain viewers, the new network needed to assess the weaknesses of its competition—ABC, CBS and NBC. Since the Big Three networks had the lowest amount of houses using televisions (HUTs) on Saturday nights that would be its window of opportunity. It would be a risk, but ultimately a game changer. 

One other insight was that the big networks were required by the government to dedicate 7-8 p.m.Sunday nights to news or family programming. Since FOX wasn't officially a network, it didn't have to play by these rules. It could air whatever it wanted during that time, providing a much-needed leg up on the competition.

When the network premiered, Fox decided to air two shows back to back and repeated their airings twice consecutively. 

Sunday:

"Married ... with Children" 7 p.m., 8 p.m., 9 p.m.
"The Tracey Ulman Show" 7:30 p.m., 8:30 p.m., 9:30 p.m.

Each week, the network added additional programming. The results took off.

April 5, 1987: "Married ... with Children"

The sitcom that followed the dysfunctional "Bundy bunch" was Fox's first example of successful counterprogramming that would help solidify the network's branding.

The show, starring Katey Sagal, Ed O'Neill, Christina Applegate and David Faustino, became the longest live-action sitcom for the fourth network. When it debuted, the series originally competed with CBS' popular "Murder, She Wrote."

The controversial show went against everything on television at the time featuring constant fighting about money, bickering between siblings Kelly and Bud (Applegate and Faustino) and openly discussing sex.

Not everyone was a fan of the raucous show. During season 3, Michigan housewife, Terry Rakolta, encouraged viewers and advertisers to boycott Fox's hit. Her call to action didn't spur any giant riots. Instead, her plan backfired, giving the show a huge ratings boost, by making more people aware of the controversial show and the FOX network.

Interestingly, the show was never a real ratings winner, but the show saw success for 11 seasons and 259 episodes. Fox re-aired the pilot episode April 22 in honor of its 25th anniversary.

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Fox has been on the air for 25 years. We've shown you the milestones and television shows that put the fledgling network on the map; however, it wasn't always a cakewalk for the network. In fact, FOX probably wouldn't have survived without the backing of News Corp in its early days.

We've uncovered six details from the network's history that tell the story of the fourth channel that almost wasn't—the billions of dollars media-mogul Rupert Murdoch gambled on the start-up and what company risked more than a million dollars to advertise with the then start-up.

And, did you know FOX went by a different name right up until its television premiere? Yeah, the face of television could have been much different.

(Source: The Fourth Network)

Rupert Murdoch invested $2 billion in FOX.

Whereas, others would have found this number insane in the '80s. Murdoch didn't hesitate to pull out his checkbook.

Without the funding, Fox would not have been able to buy six TV stations to broadcast throughout the country, making the fourth network's chances for success pretty slim.

When FOX originally aired, it wasn't considered a network. Rather, it existed as six stations.

FOX was made up of New York, Los Angeles, Chicago, Washington, D.C., Houston and Dallas VHF (Very High Frequency) stations.

FOX network was originally named FBC.

Why: Network executives attempted to model rival names ABC, CBS and NBC. Other rejected titles included UBS (Universal Broadcasting System) and IBS (International Broadcasting System).

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The Leveson Inquiry, the British investigation into UK press standards, has just released a number of "secret" text messages between UK culture secretary Jeremy Hunt and top PR man Fred Michel.

The scandal here, of course, is that Hunt was in charged with the government's handling of Rupert Murdoch's planned takeover of British television company BSkyB—and Michel was handling the PR of none other than Rupert Murdoch.

That's something of a conflict of interest.

The main takeaway? How hilariously, ridiculously, embarrassing these texts are for Hunt. Check out our favorite, as spotted by Political Scrapbook:

Michel to Hunt:

Hunt responds:

And yet somehow Hunt remains in office.

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LONDON (AP) — Former Prime Minister Gordon Brown lambasted Rupert Murdoch before Britain's media ethics inquiry on Monday, claiming the media mogul had lied under oath to the inquiry and saying that a Murdoch tabloid had undermined the British war effort in Afghanistan.

In an often bitter attack, Brown directly contradicted Murdoch's claim that Brown had vowed to "make war on your company" during an abusive phone call after Murdoch's The Sun tabloid switched its support from Brown's Labour Party to the rival Conservatives.

"It didn't happen," said Brown, adding that he had been shocked to hear Murdoch make the allegation to the inquiry in April. "This call did not happen, this threat was not made."

Murdoch's News International company fired back, saying in a statement that the mogul stood by his testimony.

Brown was the first in a string of current and former political leaders to appear this week at the inquiry, set up amid a tabloid phone hacking scandal to examine malpractice in the British media and too-cozy ties among U.K. politicians, police and the press. Among the issues the inquiry is addressing is whether newspapers have too much power over the country's political agenda.

Brown told the judge-led inquiry that The Sun was guilty of "the conflation of fact and opinion" in its coverage of the Afghanistan conflict and of his premiership.

He said instead of covering the difficult decisions facing his government, The Sun had concluded "that I personally did not care about our troops in Afghanistan."

He said the newspaper had made a series of spurious claims, for example that he had fallen asleep during a service of remembrance for dead troops. Brown said he had been bowing his head in prayer.

Brown asserted that The Sun's coverage had done "huge damage" to the British war effort against the Taliban. The former prime minister said the press had "failed this country" by focusing on opinions and ephemera when the war in Afghanistan was at a crucial stage.

"I'm afraid half the country (Afghanistan) is falling into the hands of the Taliban," Brown said, accusing the press of failing to reflect this.

The Sun's political editor, Tom Newton Dunn, denied Brown's allegations, saying on Twitter that the newspaper had given the conflict prominent coverage. "Military loathed Brown because they felt he didn't care about them. Sun reported that, but Gordon rewrites history to shoot the messenger," he tweeted.

Brown had a testy relationship with the powerful Murdoch press during his 2007-2010 term in office. The Sun, renowned for its political clout, backed the Conservative party over Brown's Labour in the 2010 national election. The election ejected Brown from power and produced a Conservative-Liberal Democrat coalition government under Prime Minister David Cameron.

Two years on, Brown appeared bruised by his relationship with a press that often characterized him as prickly and awkward.

Brown spoke of his pain at seeing leaked details of his young son's health splashed in The Sun. The tabloid revealed in 2006 that Brown's infant son Fraser had been diagnosed with cystic fibrosis.

Brown said he and his wife Sarah had been distressed by the leak — which apparently came from a hospital worker — but acknowledged that Sarah had remained friendly with Rebekah Brooks, the Sun's then-editor, and even organized a 40th birthday party for her in 2008.

"I think Sarah is one of the most forgiving people I know," Brown said. "I think she finds the good in everyone."

Brooks, 44, along with her husband and four aides, was charged last month with conspiring to pervert the course of justice in connection with the phone hacking scandal. They are the first people to be charged in the current investigation into tabloid wrongdoing, which has shaken Britain's media, police and political establishments. More than 40 people have been arrested and questioned.

The ethics inquiry was set up last year after revelations that Murdoch's now-defunct News of the World had hacked the mobile phone voice mails of scores of celebrities, politicians and even crime victims in its quest for scoops. Murdoch closed the paper in July.

Britain's current Treasury chief, George Osborne, testified after Brown. He sought to emphasize his government's independence from Murdoch, denying suggestions that he'd waved through Murdoch's multibillion-pound (dollar) bid for lucrative satellite broadcaster BSkyB in return for the mogul's political support. Murdoch dropped the BSkyB bid after the phone hacking scandal exploded.

"It is complete nonsense, and the facts simply don't bear it out," Osborne said.

Osborne was also quizzed about his role in hiring a former editor of the News of the World, Andy Coulson, as communications chief for the Conservative Party.

Coulson, who eventually became Cameron's communications chief, was forced to resign amid the scandal last year. Critics claim that Osborne and Cameron had overlooked allegations of wrongdoing swirling around Coulson because of the ex-editor's close links to Murdoch's News International, and especially to Brooks, a friend and former colleague of his.

Osborne denied that Coulson's Murdoch connections were key to hiring him.

"He was the best candidate for the job," Osborne said.

Cameron is due to testify before the inquiry on Thursday.

___

Associated Press Writer Raphael Satter contributed to this report. Jill Lawless can be reached at: http://twitter.com/JillLawless

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News Corporation Chairman and CEO Rupert Murdoch just took to Twitter to take a couple of shots at Mitt Romney:

Boom. Earlier this year, Murdoch used Twitter to voice his endorsement of then-Republican presidential candidate Rick Santorum ahead of the Iowa caucuses, saying that Santorum was the "only candidate with genuine big vision for country." 

Today's tweets suggest Murdoch's sentiments haven't changed much since the primary. 

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News Corp. is expected to announce plans to split itself into two on Thursday, CNBC reports.

It will keep its profitable film and TV groups together while putting its less lucrative publishing assets in another company.

Frankly, we're not sure who will want to invest in the publishing company which will be made up of newspapers. One analyst pegged that business as being worth 7% of News Corp.'s overall value.

Goldman Sachs is News Corp.'s banker on the deal, according to Bloomberg.

CNBC says the split will take a year to complete. When it's done, it will be a huge shift in the media landscape.

Investors have been begging Rupert Murdoch to split up his empire for a long time now. He's been reluctant, but it looks like the hacking scandal has forced his hand.

In order for the film and TV business to pursue certain deals, News Corp needed to free it from the baggage of the publishing group.

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There is "no truth" to a Times report that News Corp may buy Monster.com in the next couple days, a source close to News Corp tells us.

News Corp is considering whether to split in two – a very profitable entertainment division and a not-so-profitable publishing division.

The New York Times's Amy Chozick and Michael de la Merced report that this decision could be made as soon as Thursday.

In the same report, the Times says that News Corp executives are deciding whether or not to make the publishing division a touch more profitable by acquiring Monster.com (and, presumably, its asset HotJobs.com) and including the jobs-listing site in the spinout.

Our source says that's not true. Of course, this source is close to News Corp, and if News Corp were interested in Monster, it would probably want to keep the public company's stock price down.

Still: we believe the source. Spinouts are hard enough without working a $1 billion acquisition into them.

Monster has been in play since at least May, when Silver Lake and other private equity buyers took a long look. LinkedIn was also asked to take a look. It did – and passed.

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Way back in 2007, Rupert Murdoch shocked the media world by making a hyper-aggressive play for the Wall Street Journal--and getting it.

At the time, the stock of Dow Jones, which owned the Journal, was trading in the $30s. Senior execs at the company had a goal of getting the stock to $45. No one thought it was worth more than $50.

Murdoch offered $60.

And the Bancroft family, who controlled Dow Jones and who, for years, had floated on the pride and cash it delivered, initially scoffed--and then took the money.

And, in so doing, they did what other newspaper-owning family dynasties like the Sulzbergers did not: They cashed out at the top.

So Murdoch got his prize. For $5 billion.

Five years later, Murdoch's News Corp. is now planning to split News Corp. into two parts: The "good businesses" part, which will contain News Corp's TV assets, and the "crappy businesses" part, which will contain the newspapers and book-publishing assets.

The latter company will hold the Wall Street Journal. But it will also hold all of the other newspapers that Rupert Murdoch owns, along with Harper-Collins and other assets.

And how much will it be worth?

According to Goldman Sachs, about $5 billion.

The entity, Goldman says, will generate about $1 billion of EBITDA (a measure of cash flow). The New York Times trades at about 5X EBITDA, Goldman says, so that's about where News Corp.'s newspapers will trade.

In other words, all of News Corp's newspapers, along with its book publishing house, will be worth the same amount that Murdoch paid for the Wall Street Journal five years ago.

Thank God for News Corp's other assets, namely FOX.

SEE ALSO: 18 Pictures That Changed The World

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Here it is: News Corp's official announcement that it will split itself into two businesses: Publishing and entertainment. You can read the whole thing below.

Here are two key paragraphs:

Upon closing of the proposed transaction, Rupert Murdoch would serve as Chairman of both companies and CEO of the media and entertainment company. Chase Carey would serve as President and COO of the media and entertainment company. Over the next several months, the Company will assemble management teams and Boards of Directors for both businesses.

The separation is expected to be completed in approximately 12 months. Management is developing detailed plans for the Board’s further consideration and final approval. To execute the transaction requires further work on structure, management, governance, and other significant matters. After receiving final approval of the Board of Directors, News Corporation will convene a special shareholder meeting to consider the transaction. This meeting is not expected to take place until the first half of calendar 2013. During the closing process, News Corporation will remain focused on delivering the best possible results for the benefit of its consumers, customers and shareholders.

----

NEW YORK--(BUSINESS WIRE)--

News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) today announced that it intends to pursue the separation of its publishing and media and entertainment businesses into two distinct publicly traded companies. Upon closing of such a transaction, shareholders would hold interests in a world-class publishing company, consisting of the largest collection of best-in-class publishing assets and a new digital education group, and an unmatched global media and entertainment company, each of which would benefit from enhanced strategic alignment and increased operational flexibility with respect to an unparalleled portfolio of assets, brands and franchises.

News Corporation’s Board authorized management to explore this separation after a Board meeting yesterday.

The proposed transaction would create global category leaders in both publishing and entertainment: a publishing company, which would be comprised of News Corporation’s newspapers and information businesses in the U.S., U.K., and Australia, the Company’s leading book publishing brands, its integrated marketing services company, its digital education group, as well as its other assets in Australia; and a global media and entertainment company, which would encompass News Corporation’s broadcast and worldwide cable networks, leading film and television production studios, television stations and highly successful pay-TV businesses in Europe and India.

"There is much work to be done, but our Board and I believe that this new corporate structure we are pursuing would accelerate News Corporation’s businesses to grow to new heights, and enable each company and its divisions to recognize their full potential – and unlock even greater long-term shareholder value,” said Rupert Murdoch, Chairman and CEO of News Corporation. “News Corporation's 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognize that over the years, News Corporation’s broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe. I am 100 percent committed to the future of both the publishing and media and entertainment businesses and, if the Board ultimately approves a separation, I would serve as Chairman of both companies.”

News Corporation believes that a separation of the businesses into distinct public corporations with their own identities and strategies would enhance overall shareholder value and allow each company to:

• Focus on and pursue distinct strategic priorities and industry-specific opportunities that would maximize their long-term potential.
• Benefit from greater financial and operational flexibility and better position each company to compete.
• Respond and react more quickly to rapidly-evolving technology and global market opportunities.
• Tailor its capital structure, and allocate and deploy resources in a manner consistent with its strategic objectives that best enhances value for its respective shareholder group.

With more focus devoted to each business’ financial and operational structure, investors would be able to more clearly evaluate the inherent value of both portfolios of assets and invest in each company accordingly.

The new global media and entertainment company that would be created through the proposed transaction would consist of News Corporation’s highly-profitable cable and television assets, filmed entertainment, and direct satellite broadcasting businesses, including Fox Broadcasting, Twentieth Century Fox Film, Twentieth Century Fox Television, Fox Sports, Fox International Channels, Fox News Channel, Fox Business Network, FX, Star, the National Geographic Channels, Shine Group, Fox Television Stations, BSkyB, Sky Italia and Sky Deutschland, among others. As a pure-play content producer and distributor, the Company would build on its deep heritage in developing incredibly strong, premium content for distribution on screens of all sizes by leveraging its leading content across its entertainment and cable news verticals, as well as its unparalleled collection of regional sports networks, and the industry's leading movie and TV production and distribution company. In addition, the entertainment company would benefit from its rapidly growing, high-margin cable network and pay-TV assets, and the distribution capabilities and opportunities associated with its unrivaled global footprint with significant scale across North and South America, Europe and Asia.

The new global publishing company that would be created through the proposed transaction would consist of News Corporation’s current publishing businesses, as well as its book publishing, education and integrated marketing services divisions. The new publishing company would create a scaled publishing platform that would be one of the best capitalized in the industry. The publishing company would have the opportunity to leverage its trusted brands for innovation and value creation across all traditional and digital platforms. The publishing company would incorporate some of the world’s most successful print, digital and information services brands including Dow Jones, The Wall Street Journal, Dow Jones Newswires, HarperCollins, The New York Post, and The Daily, as well as offer the rich diversity of assets in Australia, including leading brands such as The Australian, The Herald Sun, The Daily Telegraph and The Courier Mail. In addition, the Company would include The Times, The Sun, The Sunday Times, as well as News Corporation’s integrated marketing services group and its ground-breaking digital education group, including Wireless Generation. With a balanced portfolio of stable and growing news publishing brands and other assets, shareholders would benefit from strong and consistent free cash flow generated by these businesses, over multiple platforms.

Upon closing of the proposed transaction, News Corporation’s shareholders would receive one share of common stock in the new company for each same class News Corporation share currently held. Following the separation, each company would maintain two classes of common stock: Class A Common and Class B Common Voting Shares.

Upon closing of the proposed transaction, Rupert Murdoch would serve as Chairman of both companies and CEO of the media and entertainment company. Chase Carey would serve as President and COO of the media and entertainment company. Over the next several months, the Company will assemble management teams and Boards of Directors for both businesses.

The separation is expected to be completed in approximately 12 months. Management is developing detailed plans for the Board’s further consideration and final approval. To execute the transaction requires further work on structure, management, governance, and other significant matters. After receiving final approval of the Board of Directors, News Corporation will convene a special shareholder meeting to consider the transaction. This meeting is not expected to take place until the first half of calendar 2013. During the closing process, News Corporation will remain focused on delivering the best possible results for the benefit of its consumers, customers and shareholders.

In addition to shareholder approval, the completion of the separation will also be subject to receipt of regulatory approvals, opinions from tax counsel and favorable rulings from certain tax jurisdictions regarding the tax-free nature of the transaction to the Company and to its shareholders, further due diligence as appropriate, and the filing and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission. The Company will provide interim updates as appropriate. There can be no assurances given that the separation of the Company’s businesses as described in this announcement will occur.

Analyst Teleconference details:

News Corporation’s senior executives will host a call to discuss the announcement and answer questions from the analyst community. Reporters are invited to join the call on a listen-only basis.

Thursday, June 28, 2012
8:30 a.m. (EDT)

United States: (800) 230-1951
International: (612) 332-0418
Passcode: NEWS

An audio replay of the call will be available until July 13, 2013 from the following dial in numbers:

United States: (800) 475-6701
International: (320) 365-3844
Access Code: 253250

About News Corporation

News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) had total assets as of March 31, 2012 of approximately US$61 billion and total annual revenues of approximately US$34 billion. News Corporation is a diversified global media company with operations in six industry segments: cable network programming; filmed entertainment; television; direct broadcast satellite television; publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and Latin America.

Cautionary Statement Concerning Forward-Looking Statements

This document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s views and assumptions regarding future events and business performance, including its expectations with respect to the proposed transaction. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory factors. In addition, actual plans, actions and results relating to the proposed transaction may differ materially from current expectations as a result of certain risks and uncertainties, including but not limited to: unanticipated developments that delay or negatively impact the proposed transaction; changes in market conditions; disruption to business operations as a result of the proposed transaction; the inability to retain key personnel; and the other risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission. More detailed information about these and other factors that could affect future results is contained in our filings with the Securities and Exchange Commission. There can be no assurance that the proposed transaction will be completed as anticipated or at all. The “forward-looking statements” included in this document are made only as of the date of this document and we do not have any obligation to publicly update any “forward-looking statements” to reflect subsequent events or circumstances, except as required by law.

Participants in the Solicitation

The Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of News Corporation in connection with the proposed transaction, if pursued. Information about the executive officers and directors of News Corporation and their ownership of News Corporation common stock is set forth in the proxy statement for News Corporation's 2011 Annual Meeting of Shareholders, which was filed with the Securities and Exchange Commission on September 2, 2011. If the Company determines to pursue the proposed transaction, investors and security holders may obtain additional information regarding the direct and indirect interests of the Company and its executive officers and directors in the proposed transaction by reading the Schedule 14A and the preliminary proxy statement regarding the proposed transaction when it becomes available.

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Good morning! Here's the news:

• Google introduced the Nexus 7 tablet and an Apple TV-like device called the Nexus Q, along with several other new products at its developers conference on Wednesday. Here's the complete breakdown of everything Google announced.

• Business Insider's Steve Kovach got to try out the new Nexus 7 tablet for an hour. Here's his first reaction to playing with the device.

• Google also offered a demonstration of its digital glasses. We caught up with the designer behind Google Glass afterwards to find out more about the top secret project.

• The bottom line: Google is a hardware company now.

• News Corp.'s board has approved plans to split into two companies, one for publishing and one for entertainment. You can read the full announcement of the change here.

• Facebook has completely sandbagged estimates. Get ready for an "upside surprise!"

• Facebook just fixed one of the biggest complaints that users have about its iPhone app. The app is about to get much faster.

• Apple is planning to make some huge changes to iTunes later this year. Bloomberg reports there will be better integration with iCloud and more music sharing features.

• Institutional Venture Partners, a Silicon Valley VC firm, just raised a massive new $1 billion fund.

• Philipp Humm, the CEO of T-Mobile USA, resigned from the company on Wednesday and will move to Vodafone in October, Reuters reports.

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After much speculation, News Corp. has confirmed that it is considering a split that would see the media and entertainment conglomerate cleave itself in two, with the newspaper (and book publishing) assets carved out as a separate unit from its TV and movie businesses. Although the company could still decide not to do so,the idea raises an interesting question: Assuming that chairman and CEO Rupert Murdoch is interested in seeing that newspaper-only unit succeed — as opposed to just selling it to someone else or slowly liquidating it — what would he have to do in order to make that happen? (Update: News Corp. officially confirmed the split on Thursday)

When it comes to the digital aspects of its newspaper business — which includes the Wall Street Journal, the New York Post, the Times of London and the Australian, among other prominent names — News Corp. is a creature of contradictions. Many have criticized Murdoch for being too quick to erect “hard” paywalls at newspapers like the Times (as opposed to soft or metered paywalls like the one at the New York Times), since that resulted in a massive loss of readers for the venerable British paper. Murdoch also maintained the paywall at the Wall Street Journal after buying it in 2007, despite initially saying that he planned to remove it.

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