General investigated for emails to Petraeus friend

PERTH, Australia (AP) — In a new twist to the Gen. David Petraeus sex scandal, the Pentagon said Tuesday that the top American commander in Afghanistan, Gen. John Allen, is under investigation for alleged “inappropriate communications” with a woman who is said to have received threatening emails from Paula Broadwell, the woman with whom Petraeus had an extramarital affair.

Defense Secretary Leon Panetta said in a written statement issued to reporters aboard his aircraft, en route from Honolulu to Perth, Australia, that the FBI referred the matter to the Pentagon on Sunday.

Panetta said that he ordered a Pentagon investigation of Allen on Monday.

A senior defense official traveling with Panetta said Allen’s communications were with Jill Kelley, who has been described as an unpaid social liaison at MacDill Air Force Base, Fla., which is headquarters to the U.S. Central Command. She is not a U.S. government employee.

Kelley is said to have received threatening emails from Broadwell, who is Petraeus’ biographer and who had an extramarital affair with Petraeus that reportedly began after he became CIA director in September 2011.

Petraeus resigned as CIA director on Friday.

Allen, a four-star Marine general, succeeded Petraeus as the top American commander in Afghanistan in July 2011.

The senior official, who discussed the matter only on condition of anonymity because it is under investigation, said Panetta believed it was prudent to launch a Pentagon investigation, although the official would not explain the nature of Allen’s problematic communications.

The official said 20,000 to 30,000 pages of emails and other documents from Allen’s communications with Kelley between 2010 and 2012 are under review. He would not say whether they involved sexual matters or whether they are thought to include unauthorized disclosures of classified information. He said he did not know whether Petraeus is mentioned in the emails.

“Gen. Allen disputes that he has engaged in any wrongdoing in this matter,” the official said. He said Allen currently is in Washington.

Panetta said that while the matter is being investigated by the Defense Department Inspector General, Allen will remain in his post as commander of the International Security Assistance Force, based in Kabul. He praised Allen as having been instrumental in making progress in the war.

The FBI’s decision to refer the Allen matter to the Pentagon rather than keep it itself, combined with Panetta’s decision to allow Allen to continue as Afghanistan commander without a suspension, suggested strongly that officials viewed whatever happened as a possible infraction of military rules rather than a violation of federal criminal law.

Allen was Deputy Commander of Central Command, based in Tampa, prior to taking over in Afghanistan. He also is a veteran of the Iraq war.

In the meantime, Panetta said, Allen’s nomination to be the next commander of U.S. European Command and the commander of NATO forces in Europe has been put on hold “until the relevant facts are determined.” He had been expected to take that new post in early 2013, if confirmed by the Senate, as had been widely expected.

Panetta said President Barack Obama was consulted and agreed that Allen’s nomination should be put on hold. Allen was to testify at his confirmation hearing before the Senate Armed Services Committee on Thursday. Panetta said he asked committee leaders to delay that hearing.

NATO officials had no comment about the delay in Allen’s appointment.

“We have seen Secretary Panetta‘s statement,” NATO spokeswoman Carmen Romero said in Brussels. “It is a U.S. investigation.”

Panetta also said he wants the Senate Armed Services Committee to act promptly on Obama’s nomination of Gen. Joseph Dunford to succeed Allen as commander in Afghanistan. That nomination was made several weeks ago. Dunford’s hearing is also scheduled for Thursday.

___

Associated Press writer Slobodan Lekic in Kabul, Afghanistan, contributed to this report.

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Papa John’s falls on news of class-action suit

NEW YORK (AP) — Shares of Papa John‘s declined on Tuesday following news of class-action certification for a lawsuit that claims the pizza chain had unsolicited text messages sent to cell phones.

THE SPARK: The lawsuit filed with the U.S. District Court for the Western District of Washington in Seattle claims Papa John‘s violated state and federal law when they had the marketing company OnTime4U send unsolicited text messages on its behalf to cell phones advertising their pizza products. The lawsuit says that 500,000 illegal text messages were sent to Papa John’s customers across the U.S.

Papa John’s faces potential damages of more than $ 250 million. The plaintiffs may each potentially receive $ 500 or more in damages for each text message.

Messages left with Papa John’s seeking comment were not immediately returned.

SHARE ACTION: Papa John’s International Inc.’s stock fell 34 cents to $ 49.10 in afternoon trading after dropping as low as $ 46.72 earlier in the session. Over the past year, the shares have traded in a range of $ 35.21 to $ 56.41.

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Rolling Stones add fifth date to anniversary tour

LONDON (Reuters) – The Rolling Stones have added a fifth date to their 50th anniversary tour later this year, the band announced on its website.

In between two shows at London‘s O2 Arena starting on November 25 and two more at the Prudential Center in Newark, NJ opening on December 13 the veteran quartet will play the Barclays Center in Brooklyn, NY on December 8.

Tickets for the fifth concert go on sale on Monday, November 19. The first four gigs quickly sold out despite complaints from many fans over high ticket prices ranging between around 95 pounds ($ 150) and 950 pounds for a VIP seat in London.

On auction website eBay, a pair of ticket with a face value of 406 pounds is on offer for as much as 1,500 pounds.

“You might say, ‘The tickets are too expensive’,” singer Mick Jagger told Billboard magazine in a recent interview.

“Well, it’s a very expensive show to put on, just to do four shows, because normally you do a hundred shows and you’d have the same expenses.”

He added that he did not agree with the secondary ticket market and stressed that the Rolling Stones did not profit from tickets changing hands at inflated prices.

The concerts celebrating 50 years of the band behind hits like “(I Can’t Get No) Satisfaction” and “Honky Tonk Women” are part of a series of events marking the milestone including a new documentary, a photograph book and a greatest hits album.

The music press has been rife with speculation that the Stones could launch a full world tour next year including a set at the Glastonbury music festival.

(Reporting by Mike Collett-White, editing by Paul Casciato)

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Diabetes cases hit record and half go undiagnosed

LONDON (Reuters) – Diabetes is running at record levels worldwide and half the people estimated to have the disease are, as yet, undiagnosed, according to a report on Wednesday.

The number of people living with diabetes is now put at 371 million, up from 366 million a year ago, with numbers expected to reach 552 million by 2030, the International Diabetes Federation (IDF) said.

Diabetes is often viewed as a western problem, since the vast majority of people have type 2 disease which is linked to obesity and lack of exercise.

But the disease is also spreading rapidly in poorer countries, alongside urbanization, and four out of five diabetics now live in low and middle-income countries, opening up new opportunities and challenges for the drug industry.

China alone has 92.3 million people with diabetes, more than any other nation in the world, and the hidden burden is also enormous in sub-Saharan Africa where limited healthcare means less than a fifth of cases get diagnosed.

The IDF estimates that, globally, 187 million people do not yet know they are suffering from the condition.

Diabetics have inadequate blood sugar control which can lead to serious complications, including nerve and kidney damage and blindness. Worldwide deaths from the disease are running at 4.8 million a year.

The disease is one of a number of chronic conditions – along with cancer, cardiovascular and respiratory diseases – that healthcare campaigners want included in the next set of global development goals, which will replace outgoing Millennium Developments Goals in 2015.

For the international drugmakers, diabetes offers riches, with global sales of diabetes medicines expected to reach $ 48-$ 53 billion by 2016, up from $ 39.2 billion in 2011, according to research firm IMS Health.

CHINA TO AFRICA

Tapping into the potential of increased demand in emerging markets, however, requires a twin-track approach from drug companies which have traditionally focused on pricey new therapies for rich-world markets.

These days, there is a lot more focus on high-volume but lower-margin business in developing economies, many of which are predicted to show high double-digit percentage sales growth for diabetes medicines for years to come.

The shift is already yielding results.

China, for example, is now the second-largest market behind the United States for the world’s biggest maker of insulin – Danish group Novo Nordisk. It is also a major focus for rivals such as Eli Lilly, Merck & Co, and Sanofi.

Poorer countries are more difficult, especially when it comes to insulin, which must be kept cool if it is not to deteriorate. While most patients start on cheap generic diabetes pills, such as metformin, many need insulin as their disease progresses.

Still, Novo Nordisk thinks it has cracked part of the problem in Kenya, where a project using churches and other local groups has reduced the number of middlemen in the supply chain and cut the cost of a month’s supply of insulin to around 500 Kenyan shillings ($ 6).

So far, the project only covers around 1,000 Kenyans but Jesper Hoiland, Novo’s head of international operations, is confident his company’s low-price model will become profitable as it increases in scale. “It will take three to five years to get to breakeven,” he said in an interview.

In the meantime, similar pilot schemes are being tested in rural India and Nigeria.

Other major drugmakers like Sanofi, which has a significant presence in Africa, are also adopting “tiered” or differential pricing to open up developing world markets.

(Editing by Dan Lalor)

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China rails against protectionism at party congress

BEIJING (Reuters) – China‘s top trade and investment officials are railing against what they call a rising tide of global protectionism that blocks its major companies from expanding overseas and further integrating into the global economy.

The officials, speaking on the sidelines of a week-long Communist Party Congress, said protectionism was emerging across the world, not just in the West. It damaged global growth, frayed relations and could see China focus its investments in neighboring Asian nations, the officials said.

“We are against it,” Industry Minister Miao Wei told reporters on Wednesday when asked what he thought about protectionism as he left the Great Hall of the People after the closing session of the congress.

Commerce Minister Chen Deming had set the tone earlier last week, deriding the “Cold War mentality” of Washington lawmakers who urged U.S. firms in a landmark report last month not to do business with two top Chinese telecom equipment makers because of risks to national security.

He was followed by Lou Jiwei, chairman and CEO of China Investment Corporation, who told Reuters a rise in protectionism was forcing a rethink at the country’s $ 482 billion sovereign wealth fund, which would not spend money in countries “that do not welcome us”.

“There are other places to invest,” Lou said.

Asia is a particularly favored option for CIC, thanks to some of the fastest rates of growth and development in the world – which are themselves levered to China’s own economic dynamism.

Li Ruogu, president of the Export-Import Bank of China, which is a main source of loans for Chinese firms investing abroad, complained of “added layers of protectionism” being stacked up against China’s increasingly outward-looking companies.

Comments in between from bosses of some of the biggest state-owned enterprises – all of which have a Communist Party secretary at the top of their management structure – have reinforced views in some quarters that Beijing is becoming increasingly sensitive to protectionism.

Fu Chengyu, chairman of China’s oil giant Sinopec Group, said in London on Tuesday that politics made deals in the West increasingly difficult.

Sinopec’s rival, CNOOC Ltd, is struggling to win regulatory backing from Canada’s government for a $ 15.1 billion bid for Nexen Inc. A decision has been repeatedly delayed even though it has been approved by shareholders.

Even before the congress started, officials from government-run think-tanks that directly feed into policymaking had spoken to Reuters about a perceived rising tide of protectionism and how China might best try to turn it.

RISING RHETORIC

China’s trading partners, in turn, complain that state-backed companies they compete with globally get unfair support from Beijing – either through subsidies, tax breaks, cheap bank loans, or a deliberately undervalued currency.

Since joining the WTO in 2001, China has had 29 complaints of unfair trade practices brought against it. Around two thirds have been launched by the United States and the European Union, with others coming from a mix of developing and developed economies.

Foreign analysts though see recent rising rhetoric driven by political transition in both Washington and Beijing, a rash of troubled cross-border takeovers and the toughest conditions in three years for the country’s export-focused factory sector.

“This is playing to a domestic audience in the sense that a lot of manufacturers, a lot of exporters, aren’t doing too well and they are putting pressure on the Ministry of Commerce to do something,” Alistair Chan, an economist at Moody’s Analytics, told Reuters.

“There isn’t a lot that the government can do to help global demand, but one thing they can do is advocate for less protectionism. In terms of an actual trade war, I think that risk is quite minimal.”

China’s economy depends heavily on trade and investment flows. Exports were worth about 31 percent of GDP in 2011, according to World Bank data, while an estimated 200 million Chinese jobs are in the export sector or supported directly by foreign investment.

China’s rapid rise to become the world’s biggest exporter and its second biggest economy in the space of barely three decades since landmark economic reforms began in the late 1970s have sparked concerns among the developed economies it is eclipsing and the emerging markets which it dwarfs.

The U.S. election campaign was notable for China-bashing. Defeated candidate Mitt Romney had promised to label Beijing a currency manipulator if he won and while President Barack Obama was less confrontational, he cited his credentials as bringing more trade cases against China than his predecessor.

JOBS FEARS

There is a widespread view in the United States that trading with China has caused American firms to slash jobs.

The Economic Policy Institute, a think-tank focused on the needs of low- and middle-income workers, reckons that 2.7 million jobs were lost in the United States between 2001 and 2011 as a result of increased trade with China – 2.1 million of them in manufacturing industry.

Meanwhile research from consultancy Rhodium Group in September analyzed 600 Chinese direct investment transactions in the United States between 2000 and 2012, concluding that U.S. units of Chinese majority-owned firms directly supported 27,000 jobs.

Assuming a steady investment trend, Rhodium reckons that number would jump to 200,000-400,000 by 2020.

Beijing is targeting outbound direct investments of $ 560 billion between 2011 and 2015.

Analysts estimate China could spend $ 2 trillion globally on FDI in the next 10 years, a salivating proposition for many of the world’s top economies struggling for growth and employment opportunities – but a risk for politicians who see government-backed entities on the hunt for strategic assets, investors say.

Andrew Morris, managing director of UK fund firm Signature, reacted to news earlier this month that CIC had taken a 10 percent stake in Heathrow Airport by lambasting the British government for not doing more to preserve “our nation’s prized assets… being hoovered up by ‘foreign powers’.”

(Additional reporting by Beijing Bureau; Editing by Raju Gopalakrishnan)

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Canada seen needing to spell out rules for natural gas projects

CALGARY, Alberta (Reuters) – The fate of a handful of liquefied natural gas projects planned for Canada’s Pacific coast may depend on the Canadian government‘s willingness to spell out rules for foreign investment in the country’s energy sector, according to a study released on Thursday.

Apache Corp, Royal Dutch Shell Plc, Petronas, BG Group Plc and others are in the planning stages for LNG projects that would take gas from the rich shale fields of northeastern British Columbia and ship it to Asian buyers.

But the federal government’s decision last month to stall the C$ 5.2 billion ($ 5.2 billion) bid by Malaysia’s state-owned Petronas C$ 5.2 billion for Canada‘s Progress Energy Resources Corp could lessen the appetite of Asian buyers for Canadian LNG, energy consultants Wood Mackenzie said.

“Some potential off-takers of Canadian LNG like the idea … because it’s perceived as having low political risk, and another reason is because they see the potential for investment opportunities,” said Noel Tomnay, head of global gas at the consultancy.

“If there are going to be restrictions on how they access those opportunities, if acquisitions are closed to them, then clearly that would restrict the attractiveness of those opportunities. If would-be Asian investors thought that corporate acquisitions were an avenue that was not open to them then Canadian LNG would become less attractive.”

The Canadian government is looking to come up with rules governing corporate acquisitions by state-owned companies and has pushed off a decision on the Petronas bid as it considers whether to approve the $ 15.1 billion offer for Nexen Inc from China’s CNOOC Ltd.

Exporting LNG to Asia is seen as a way to boost returns for natural-gas producers tapping the Montney, Horn River and Liard Basin shale regions of northeastern British Columbia.

Though Wood Mackenzie estimates the fields contain as much as 280 trillion cubic feet of gas, they are far from Canada’s traditional U.S. export market, while growing supplies from American shale regions have cut into Canadian shipments.

Because the region lacks infrastructure, developing the resource will be expensive, requiring new pipelines and multibillion-dollar liquefaction.

Still Wood Mackenzie estimates that the cost of delivery into Asian markets for Canadian LNG would be in the range of $ 10 million to $ 12 per million British thermal units, similar to competing projects in the United States and East Africa.

($ 1 = $ 1.00 Canadian)

(Reporting by Scott Haggett; Editing by Leslie Adler)

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‘Sesame Street’ Elmo puppeteer takes leave amid sex scandal

LOS ANGELES (Reuters) – The puppeteer and voice behind the character Elmo on “Sesame Street” has taken a leave of absence from the children’s television show following allegations that he had a sexual relationship with a 16-year-old boy, producers said on Monday.

New York-based Sesame Workshop said in a statement that its own inquiry concluded that the claim of underage sexual conduct was unsubstantiated, and that puppeteer Kevin Clash has denied any wrongdoing and called the allegation “false and defamatory.”

But the company said Clash, 52, was disciplined after an internal investigation showed he “exercised poor judgment and violated company policy regarding Internet usage.”

The Sesame Workshop statement said the puppeteer was “taking actions to protect his reputation” and that Sesame Workshop has “granted him a leave of absence to do so.”

Neither Clash nor his personal publicist was immediately available for comment.

CNN quoted a statement from Clash acknowledging a relationship with his accuser but denying he had sexual contact with a minor.

“I am a gay man. I have never been ashamed of this or tried to hide it,” it quoted him as saying. “I had a relationship with the accuser, it was between two consenting adults, and I am deeply saddened that he is characterizing it as something other than what it was.”

The statement went on to say, “I’m taking a break from Sesame Workshop to deal with this false and defamatory allegation.”

Sesame Workshop said the matter came to its attention when it received a communication in June from accuser, now aged 23, alleging that he had a relationship with Clash beginning when he was 16 years old.

“We took the allegation very seriously and took immediate action,” the company said, adding that it met with the accuser twice and had “repeated communications with him.” The company said it also discussed the matter with Clash, who denied the allegations.

A spokeswoman for the show said she did not know whether law enforcement authorities were looking into the allegations.

Clash officially joined the “Sesame Street” cast in 1984, assuming the Elmo role that year.

Elmo’s character had debuted on the show in 1979, and though Clash was the third performer to animate the child-like shaggy red monster, Sesame Workshop credits him with turning Elmo into the international sensation he became.

For now, producers promised that Elmo would remain on the show despite the absence of Clash, saying “Elmo is bigger than any one person and will continue to be an integral part of ‘Sesame Street.’”

(Reporting and writing by Steve Gorman; Editing by Cynthia Johnston and Cynthia Osterman)

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Nesquik Recall Q and A: Are Your Kids Safe?

Nestlé announced late last week a recall of Nesquik for possible Salmonella contamination. Promoted by the Nesquik Bunny, the chocolate milk flavoring is consumed primarily by children. Here’s what you need to know to make sure your kids are safe from this Salmonella risk.

How Do I Know If My Nesquik Is Part of the Recall?

The Nesquik recall covers only chocolate powder in 10.9, 21.8 and 40.7 ounce canisters manufactured during October 2012. Any other Nesquik products are not subject to recall. According to CNN, 200,000 canisters of Nesquik are included in the recall.

Nesquik subject to the recall bears a Best Before date of October 2014. The applicable UPC codes and production codes include: for 40.7 ounce containers UPC 0 28000 68230 9 with production codes 2282574810 or 2282574820; for 21.8 ounce size, UPC 0 28000 68090 9 and production codes 2278574810, 2278574820, 2279574810, 2279574820, 2284574820, 2284574830, 2285574810, 2285574820, 2287574820, 2289574810, or 2289574820; and, for 10.9 ounce canisters, UPC 0 28000 67990 3 and product code 2278574810.

What About Ready-to-Drink Nesquik Served at My Kid’s School?

In June, Nestlé went after the school lunch market by offering eight-ounce ready-to-drink Nesquik. If your child’s school is serving ready-to-drink Nesquik, there’s no cause for concern. The recall covers only the powder variety of Nesquik, not the ready-to-drink type.

What Led to the Nesquik Recall?

Nestlé identifies a supplier of calcium carbonate used in the drink powder as the culprit. The recall notice says Omya, Inc., notified Nestlé of its own product recall due to Salmonella concerns. There have been no reports of illness associated with the Nesquik recall, Nestlé says.

What Is Calcium Carbonate?

Calcium carbonate is an additive included in powdered products to prevent caking and/or to increase calcium content, according to Self.

If My Child Gets Sick, How Will I Know Whether or Not It’s from Salmonella?

Salmonella infection symptoms include diarrhea, abdominal cramps, and fever. These normally develop within 72 hours of consuming contaminated food or drink. Most people who do contract salmonellosis get better in about a week without treatment. For infants, the elderly, pregnant women, and people with compromised immune systems, salmonellosis can be life threatening and medical treatment is advised.

Can I Get a Refund?

Yes. Return recalled Nesquik to the store where you bought it for a refund, or call Nestlé Consumer Services at (800) 628-7679.

Carol Bengle Gilbert writes about consumer issues for the Yahoo! Contributor Network.

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Thompson takes helm at NYTimes, faces stiff challenges

(Reuters) – Mark Thompson reported to work as the New York Times Co chief executive on Monday, confronting challenges ranging from making the publisher less dependent on advertising to trimming costs and figuring out what to do with its pile of cash.

Thompson is also dealing with questions pertaining to a series of scandals at the BBC, where he served as director-general from 2004 until September this year.

George Entwistle, who succeeded Thompson at the British broadcaster, resigned on Saturday and two of its top news directors stepped aside on Monday.

The BBC has come under fire for its handling of two investigations at its flagship news show, “Newsnight”. One is a massive sexual abuse scandal involving the late Jimmy Savile, a former presenter at the network. The other is a news story of an allegation that a former top politician sexually abused children, which was later proven to be false.

The latter report occurred after Thompson left the BBC. However, an unaired program about Savile was produced while Thompson was director-general of the broadcasting company.

In a staff memo obtained by Reuters, New York Times Chairman Arthur Sulzberger welcomed Thompson but sidestepped addressing the BBC scandals.

“We welcome him at a time of tremendous change and challenge, which must be met with equal focus and innovation,” Sulzberger said in the memo distributed on Monday.

“Mark will lead us as we continue our digital transformation, bolster our international growth, drive our productivity and introduce new technologies that will help us become better storytellers and enrich the experience for our readers and viewers.”

British ITV filmed Thompson as he arrived at the New York Times headquarters on Monday near Manhattan’s Times Square. “I’m looking forward to starting work there right now,” said Thompson, who was dressed in a navy blue suit, red tie and had a backpack slung over his right shoulder.

Asked if the BBC saga would be a distraction, he said: “I believe it will not in any way affect my job, which I’m starting right now as chief executive of the New York Times Company.”

Still, the volley of news about the turmoil at BBC has been coming fast across the Atlantic since a rival British broadcaster aired a bombshell investigation about Savile in October.

There is little to suggest the pace will slacken as the chairman of the BBC Trust called for a “thorough structural radical overhaul” of the organization, and police and parliament have opened inquiries.

Ken Doctor, an analyst with Outsell Research, said the BBC scandals will replace “hackgate” – the phone hacking controversy that shook News Corp’s British newspaper arm – in the UK popular press and in parliament.

Indeed, News Corp founder, Chairman and CEO Rupert Murdoch, who has criticized the publicly funded BBC in the past, tweeted on Saturday, “BBC getting into deeper mess. After Savile scandal, now prominent news program falsely names senior pol as pedophile.”

Thompson said in a letter to British lawmakers he would be happy to appear in front of the parliamentary committee or any other inquiry in the future.

The British investigations into the BBC could prove to be a distraction for Thompson if they are drawn out.

“It’s clearly a distraction,” Doctor said, who added that he believes Thompson should have stepped aside over the weekend.

“How big, how long this is going to last is unknown. For anybody who cares about the New York Times and its journalism this is an unneeded distraction.”

Doctor is another voice in a growing chorus to question whether Thompson is fit to serve as CEO.

New York Times Public Editor Margaret Sullivan wrote on Monday a second column about Thompson.

She praised the coverage in Times about the BBC saga and Thompson, saying it “pulled no punches in reporting,” and noted that the scandal is being felt in New York.

“It’s safe to say that everyone here – from the Times’ board of directors to the mail clerks — hopes that Mr. Sulzberger’s faith in Mr. Thompson will be rewarded,” she wrote.

“What happens in London reverberates in New York. And the chaos at the BBC – in which many of the people Mr. Thompson has supervised stepped aside as recently as this past weekend — feels uncomfortably close to home.”

Thompson did not immediately respond to a request for comment regarding Entwistle’s resignation. Earlier, he declined to be interviewed about his plans for the New York Times.

TAKING CARE OF BUSINESS

Thompson took the helm at the New York Times just weeks after the company reported that it missed third-quarter revenue and profit expectations, which sent its stock tumbling 22 percent.

His arrival on Monday marks the first time the company has had a CEO since the abrupt ouster of Janet Robinson last December.

In addition to the business challenges, Thompson must also manage the desires of the Ochs-Sulzberger family, which has controlled The New York Times for more than 100 years. The company’s business issues have forced the family to forego a dividend since 2009.

“The first thing he will have to focus on is the balance sheet,” Barclay’s analyst Kannan Venkateshwar said of Thompson’s priorities.

Analysts widely expect the company to reinstate a dividend since it will end the year with about $ 1 billion in cash, due in part to sales of some of its newspapers and its digital group About.com. Debt is about $ 700 million and therefore is very manageable in the context of cash, Venkateshwar said.

Beyond the balance sheet, Thompson will have to tackle the declining advertising revenue in both print and digital while convincing readers to pay more for its products.

While the company’s circulation revenue – which includes both print and digital subscribers – makes up 52 percent of total revenue, that percentage must increase to offset persistent advertising losses.

“I think there are a lot of hurdles to the NYTimes.com pay model,” Morningstar analyst Jocelyn Mackay said. “I do wonder if their price point is too expensive.”

(Reporting by Jennifer Saba; Editing by Peter Lauria, Maureen Bavdek and Richard Chang)

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BBC must reform or die, says Trust chairman

LONDON (Reuters) – The BBC could be doomed unless it makes radical changes, the head of its governing trust said on Sunday, after its director general quit to take the blame for the airing of false child sex abuse allegations against a former politician.

Chris Patten, chairman of the BBC Trust, said confidence had to be restored if the publicly funded corporation was to withstand pressure from rivals, especially Rupert Murdoch‘s media empire, which would try to take advantage of the turmoil.

“If you’re saying, ‘Does the BBC need a thorough structural radical overhaul?’, then absolutely it does, and that is what we will have to do,” Patten, a one-time senior figure in Prime Minister David Cameron‘s Conservative Party and the last British governor of Hong Kong, told BBC television.

“The basis for the BBC’s position in this country is the trust that people have in it,” Patten said. “If the BBC loses that, it’s over.”

George Entwistle resigned as director general on Saturday, just two months into the job, to take responsibility for the child sex allegation on the flagship news programme Newsnight.

The witness in the report, who says he suffered sexual abuse at a care home in the late 1970s, said on Friday he had misidentified the politician, Alistair McAlpine. Newsnight admitted it had not shown the witness a picture of McAlpine, or approached McAlpine for comment before going to air.

Already under pressure after revelations that a long-time star presenter, the late Jimmy Savile, was a paedophile, Entwistle conceded on the BBC morning news that he had not known – or asked – who the alleged abuser was until the name appeared in social media.

The BBC, celebrating its 90th anniversary, is affectionately known in Britain as “Auntie”, and respected around much of the world.

But with 22,000 staff working at eight national TV channels, 50 radio stations and an extensive Internet operation, critics say it is hampered by a complex and overly bureaucratic and hierarchical management structure.

THOMPSON’S LEGACY

Journalists said this had become worse under Entwistle’s predecessor Mark Thompson, who took over in the wake of the last major crisis to hit the corporation and is set to become chief executive of the New York Times Co on Monday.

In that instance, both director general and chairman were forced out after the BBC was castigated by a public inquiry over a report alleging government impropriety in the fevered build up to war in Iraq, leading to major organisational changes.

One of the BBC’s most prominent figures, Newsnight presenter Jeremy Paxman, said since the Iraq report furore, management had become bloated while cash had been cut from programme budgets.

“He (Entwistle) has been brought low by cowards and incompetents,” Paxman said in a statement, echoing a widely-held view that Entwistle was a good man who had been let down by his senior staff.

Prime Minister Cameron appeared ready to give the BBC the benefit of the doubt, believing that “one of the great institutions of this country” could reform and deal with its failings, according to sources in his office.

Patten, who must find a new director general to sort out the mess, agreed that management structures had proved inadequate.

“Apparently decisions about the programme went up through every damned layer of BBC management, bureaucracy, legal checks – and still emerged,” he said.

“One of the jokes I made, and actually it wasn’t all that funny, when I came to the BBC … was that there were more senior leaders in the BBC then there were in the Chinese Communist Party.”

Patten ruled out resigning himself but other senior jobs are expected to be on the line, while BBC supporters fear investigative journalism will be scaled back. He said he expected to name Entwistle’s successor in weeks, not months.

Among the immediate challenges are threats of litigation.

McAlpine, a close ally of former prime minister Margaret Thatcher, has indicated he will sue for damages.

Claims for compensation are also likely from victims who say Savile, one of the most recognisable personalities on British television in the 1960s, 70s and 80s, sexually abused them as children, sometimes on BBC premises.

INQUIRIES

Two inquiries are already under way, looking at failures at Newsnight and allegations relating to Savile, both of which could make uncomfortable reading for senior figures.

Police have also launched a major inquiry into Savile’s crimes and victims’ allegations of a high-profile paedophile ring. Detectives said they had arrested their third suspect on Sunday, a man in his 70s from Cambridgeshire in central England.

Funded by an annual licence fee levied on all TV viewers, the BBC has long been resented by its commercial rivals, who argue it has an unfair advantage and distorts the market.

Murdoch’s Sun tabloid gleefully reported Entwistle’s departure with the headline “Bye Bye Chump” and Patten said News Corp and others would put the boot in, happy to deflect attention after a phone-hacking scandal put the newspaper industry under intense and painful scrutiny.

He said that “one or two newspapers, Mr. Murdoch’s papers” would love to see the BBC lose its national status, “but I think the great British public doesn’t want to see that happen”.

Murdoch himself was watching from afar.

“BBC getting into deeper mess. After Savile scandal, now prominent news program falsely names senior pol as paedophile,” he wrote on his Twitter website on Saturday.

It is not just the BBC and the likes of Entwistle and Patten who are in the spotlight.

Thompson, whom Entwistle succeeded in mid-September, has also faced questions from staff at the New York Times over whether he is still the right person to take one of the biggest jobs in American newspaper publishing.

Britain’s Murdoch-owned Sunday Times queried how Thompson could have been unaware of claims about Savile during his tenure at the BBC as he had told British lawmakers, saying his lawyers had written to the paper addressing the allegations in early September, while he was still director general.

(Editing by Kevin Liffey and Sophie Hares)

Europe News Headlines – Yahoo! News

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