Media baron Rupert Murdoch shuttered one of his signature British newspapers last week amid a spreading “phone hacking” scandal that has damaged his reputation and threatened the globe-spanning conglomerate he has assembled over nearly six decades.
Murdoch’s News Corp took the extraordinary step of announcing the closure of the News of the World, the company’s racy Sunday tabloid, in an attempt to stem the fallout from the newspaper’s prying into the voice-mail and cellphone accounts of hundreds of British citizens.
The 168-year-old News of the World, the widest-read in the English-speaking world, has acknowledged that it hired “investigators” who hacked into the phone accounts of politicians, celebrities and ordinary Britons in an attempt to develop stories.
The targets of the paper’s hacking apparently included the families of British troops killed in Afghanistan, victims of London’s 2005 subway bombings and a 13-year-old girl who was killed.
Murdoch, 80, has weathered criticism and crises before, most notably the near-bankruptcy of News Corp in 1990. But the phone-hacking scandal is easily the most dire public-relations debacle of the Australian-turned-American’s storied business career.
Public outrage over the phone tapping has led to rare condemnation of Murdoch in the British parliament and even from Prime Minister David Cameron, who has enjoyed Murdoch’s political support. Because of his outsize role in the British media, Murdoch has been among the most powerful and influential forces in British politics for many years.
Although there is no evidence that Murdoch was aware of the News of the World’s illegal behaviour, the scandal has shaken his dominant role in the British media establishment and has tarnished his stewardship of an empire that includes such US properties as the Fox TV network, the Wall Street Journal, New York Post and the 20th Century Fox movie studio.
The scandal has also threatened to derail News Corp’s bid to gain control of British Sky Broadcasting, the largest pay TV provider in the Britain.
News Corp owns 39 percent of the satellite company and is trying to gobble up the balance in a deal worth about $12 billion (R80.1bn).
Some obser-vers suggested last week that the scandal could affect who succeeds Murdoch at the top of his company, which he built into a colossus after inheriting two small Australian papers from his father 58 years ago. Murdoch’s heir apparent, son James, oversees the company’s British newspaper division and announced the tabloid’s demise in its London newsroom.
Many are calling for the dismissal of Rebekah Brooks, a former News of the World editor who is chief executive of its immediate parent company, News International. Brooks was editor of the paper in 2003 when a private detective working on its behalf allegedly hacked into the voice mail of slain teenager Milly Dowling and erased one of the messages. But both Rupert and James Murdoch have remained loyal to Brooks.
“I am satisfied in her leadership, that her standard of ethics, standard of conduct is very good,” the younger Murdoch told BBC News in an interview.
The company’s stock price dipped sharply on Wednesday, losing 3.6 percent in value, after Cameron called for a government inquiry and companies pulled ads from the News of the World. But the stock was off just 0.1 percent in formal trading on Thursday and rose after hours, suggesting investors believed Murdoch had stopped the immediate bleeding.
Rupert Murdoch has blamed “wrongdoers” for the hacking but has not identified any of them. He and his executives will probably face hearings into the matter in parliament, which could subject him to testimony under oath.
Murdoch last week appointed two Americans – News Corp executive Joel Klein, the former chancellor of New York’s public schools, and company board member Viet Dinh, a Georgetown University law professor and assistant attorney general under president George W Bush – to investigate the phone scandal, which began in 2003.
Word on the News of the World’s fate came late in the afternoon in London, creating a near-perfect tabloid storm. The news came just as the last instalment of the Harry Potter movie franchise was staging its world premiere in Trafalgar Square, snarling central city traffic. Talk radio shows were soon filled with news of the tabloid’s closing.
Many described the shuttering of the paper as a tactical move to head off further criticism and said it would have a negligible effect on News Corp’s bottom line.
“The Murdochs have decided that the limb had gone gangrene, and so they had to cut it off to save the body,” said John Lloyd, director of journalism at the Reuters Institute for the Study of Journalism at Oxford. “The matter decided itself… Closing it is a mixture of boldness and inevitability.”
The paper, once a huge money-maker, was considered only marginally profitable in recent years. Although it constitutes only a small part of the $54bn News Corp empire, the News of the World perhaps holds sentimental value for Murdoch.
As an upstart Australian newspaper publisher, he acquired the paper in 1969 after a prolonged fight with Robert Maxwell, since deceased. The paper became Murdoch’s British beachhead and generated so much profit that he was able to buy, in succession, the Sun, Times of London and Sunday Times, accounting for nearly half of Britain’s newspaper market.
Profits from these papers helped finance Murdoch’s designs on the US media, including his purchase of 20th Century Fox in 1985, which helped News Corp launch the Fox broadcast network. He paid $5bn for the Wall Street Journal’s parent company, Dow Jones, in 2007.
If the paper had continued to exist, luring back advertisers in the wake of the scandal might have taken years. Media analysts in London speculated Murdoch would start a Sunday edition of his tabloid Sun to capture readers and advertisers lost by the News of the World.
Some of the 200 reporters and editors who will lose their jobs with the paper’s demise described the newsroom as being in a daze.
“It was as if a nuclear bomb had blown up,” a political editor said.
Londoners expressed sympathy for the staff members, who will produce the last edition today, but not necessarily for the paper itself. At a Westminster pub called the Speaker, Roland Brown rejoiced.
“Couldn’t have happened to a better lot of hacks. What comes around, goes around, so it is written, so it is said,” said Brown, dressed in grey pinstripes.
The News of the World has a long and colourful history as Britain’s premier scandal sheet. For many decades, its specialty has been its coverage of celebrities, athletes and politicians, particularly those involved in sex scandals. Over the years, it has resorted to tactics that journalists consider ethically dubious, such as paying sources for information, hiring prostitutes to “sting” celebrities and using hidden cameras.
It has, however, uncovered some major stories, such as the revelation that US Olympic swimmer Michael Phelps had smoked marijuana at a party in 2009 and that Prince Harry had consumed alcohol and marijuana as a 17-year-old in 2002.
Although its circulation of 2.8 million is a third of its post-war peak, the paper is still far larger than the most widely circulated US newspaper (the Murdoch-owned Wall Street Journal, at 2.1 million) – a fact made more impressive considering that Britain’s population is roughly one-fifth that of the US. – Washington Post – Bloomberg