Thursday, 14 July 2011

Murdoch: Withdrawal Symptoms

News Corporation has withdrawn its attempt to acquire complete control of lucrative satellite broadcaster BSkyB. When Rupert Murdoch arrived in London a few days ago, his overriding concern was to contain the groundswell of censure against his papers and so ensure the BSkyB bid survived in some form. The NOTW became his sacrificial lamb. Now, his strategy's in tatters.

To make matters worse, Ofcom, the British communications industry regulator, is now deliberating over whether Murdoch is a "fit and proper" person to continue owning his existing 39% share of BSkyB. If it decides he isn't, it would be another huge blow to News Corp.

Vince Cable must be pleased with the outcome. Last December, against a background of ministers insisting they had no right to interfere in Murdoch's bid, the Coalition's Business Secretary was appointed to oversee the process. But Cable was stripped of the job after being secretly recorded by journalists saying he was against the acquisition and had "declared war on Rupert Murdoch." Quite a turn-around.

Yesterday, David Pillsbury finally appointed Lord Justice Leveson to lead the hacking enquiry, with powers to call media proprietors, editors and politicians to give evidence under oath. The investigation will begin as soon as possible and be in two parts - an investigation of wrongdoing in the press and police, and a review of press regulation. It's anyone's guess what this drains-up probe could reveal but for sure, it won't be pretty.

Later today, MPs will decide whether to summon News International chief executive Rebekah Brooks to answer questions on the phone-hacking scandal. The Commons media committee also wants to question Murdoch and son James, but as they aren't UK citizens they can't be forced to appear. Of course, they could attend voluntarily.

Even worse for Murdoch, his troubles are no longer confined to Britain. News Corp's methods are coming under scrutiny in America, where Democratic Senator Jay Rockefeller is calling for an investigation into claims that relatives of 9/11 victims may have been hacked by the News of the World. The allegations migrated to America via articles published in Britain's Daily Mirror, and were also raised in Parliament by Labour member Tom Watson.

Things were bad enough for Murdoch when scandal was threatening just his British operation. Now, will his wider empire be affected?

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