Murdoch's News Corp. Withdraws BSkyB Bid

Rupert Murdoch's News Corp. announced Wednesday that it has withdrawn its bid for BSkyB, a major U.K. broadcaster. Murdoch is embroiled in a phone hacking scandal involving the tabloid News of the World, which News Corp. shut down last week. Steve Inskeep talks about the announcement with NPR's David Folkenflik in London.

STEVE INSKEEP, host:

Rupert Murdoch's media empire suffered another setback today. It involves BSkyB, that television network that Murdoch's News Corp. partly owns, and which Murdoch wanted to take full control of.

Under pressure amid the UK phone-hacking scandal, News Corp. is withdrawing its bid for that company. That announcement came today, even as Britain's parliament prepared to debate the issue.

We're going to talk about this now with NPR's media correspondent, David Folkenflik. He's been covering this story in London. He's on the line.

Hi, David.

DAVID FOLKENFLIK: Hey, Steve. Good morning.

INSKEEP: OK, so this story is just breaking. But let's remember the significance of this. From the beginning, the News of the World scandal that has gotten Murdoch in trouble has been seen as having to do with this television deal. What is the deal?

FOLKENFLIK: Well, the deal was an effort by Mr. Murdoch and News Corp. to take over the 61 percent of BSkyB that it did not already own. BSkyB is actually the largest broadcaster in the UK if you think of it as a blend of a network, a satellite provider and ESPN, it really controls a lot of what people see here in the UK. And it was seen as sort of the foundation of the next generation of News Corp.'s prosperity here, much as News of the World and the Sun tabloid papers had been the basis of his riches in the newspaper industry in the previous generation.

INSKEEP: So a huge, huge deal, here. And Murdoch is backing out, which it seemed like he maybe had no choice in the matter.

FOLKENFLIK: It's a tremendous setback in the face of unified political opposition. I can't begin to tell you of the sea change that has occurred in the political landscape here in the United Kingdom just in the past nine days. You've seen members of both of the two top political parties here - the Conservative Party, which rules the coalition government led by Prime Minister David Cameron, and Ed Miliband, the Labour Party leader and opposition - have unified in revulsion at the series, the onslaught of revelations about the extent to which News of the World journalists and private investigators apparently went to hack into people's voicemails.

It started with Mr. Cameron trying to contain the damage in some ways, but he had close links - both personally and professionally - with Mr. Murdoch's executives, with his newspapers. He had relied on their support to get to power in winning election two years ago. His 180-degree turnaround meant that Mr. Murdoch and News Corp. had no allies left, had nowhere to turn.

Today, a few hours from now was scheduled a vote by which, basically, the entire house of commons would vote upon a measure to call on News Corp. to withdraw its bid. It would not have been binding, but it showed that he had no political support down in Westminster at all.

INSKEEP: And you mentioned David Cameron, the prime minister who had the close links to News Corporation. Both of the major other parties in parliament had already called on this deal to at least be delayed, if not scrapped. So it was unified opposition by the time Cameron came around.

FOLKENFLIK: That's right. And there's a, you know, what seemed to be a localized problem and question of eavesdropping and phone hacking and corruption of police and paying for information clearly was broadened as it had become evident that there's at least evidence to support allegations that news executives had some knowledge, and indeed corporate executives had some knowledge some years ago that this was a more widespread practice.

This has been a scandal that has enmeshed the superstructure of News Corp. It's also really hit at the core of the integrity of the police department, Scotland Yard, and it's really undermined the moral standing of a lot of the political leadership of the country, too. News Corp., though, in particular jeopardy. This is the plan for succession for the financial stability of the company here in the UK and in Europe. It's also...

INSKEEP: You mean the plan was to transition even more into television and less into newspapers than they had been.

FOLKENFLIK: And doing so just because the money and the revenues were so much greater. And also, you know, it's really made shakier his standing in the newspaper world, as well.

INSKEEP: OK. David, thanks very much.

FOLKENFLIK: You bet.

INSKEEP: That's NPR's David Folkenflik in London. And again, the news Rupert Murdoch's News Corporation is withdrawing its bid for BSkyB, a major TV broadcaster.

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