Murdoch Withdraws Bid For BSkyB

On Wednesday, News Corp announced it is withdrawing its bid for full control of British broadcaster BSkyB. The announcement came as Parliament debated the Murdoch newspaper scandal and prepared to vote across party lines against the BSkyB deal. Prime Minister David Cameron strongly condemned News Corp practices and announced an inquiry into the hacking scandal, police corruption, and Murdoch's influence on the political establishment — an influence that is now greatly diminished.

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Rupert Murdoch's News Corp has suffered another major setback in Britain as it faces a widespread phone-hacking and bribery scandal. The company has withdrawn its bid to take full control of BSkyB. That's the biggest broadcaster in the United Kingdom.

As NPR's David Folkenflik reports from London, the setback caps a week of reversals for a media baron who once seemed unassailable.

DAVID FOLKENFLIK: Until last week, News Corp had little reason to doubt it would take over BSkyB. Prime Minister David Cameron has close ties to senior News Corp officials and he aggressively sought and won the support of Murdoch and his four national British papers when running for office.

Last week as new allegations surfaced about News Corp's tabloid News of the World, Cameron was critical but said the BSkyB bid should still be evaluated on its merits. Yet his tone shifted daily. By today, Cameron was fiery.

Prime Minister DAVID CAMERON (United Kingdom): There needs to be root-and-branch change at this entire organization.

FOLKENFLIK: Under withering attack, Cameron joined the demands for the dismissal of Rebekah Brooks, the chief executive of Murdoch's British newspaper division. Cameron also called for News Corp to abandon the bid for full control of BSkyB.

Prime Minister CAMERON: What has happened to this company is disgraceful. It's got to be addressed at every level and they should stop thinking about mergers when they got to sort out the mess they've created.

(Soundbite of cheers)

FOLKENFLIK: Last week, News Corp shut down News of the World to ease the way for the BSkyB purchase. But public outrage led all three major parties to unite in opposition and they plan to vote for this afternoon in the House of Commons.

Today, News Corp moved again before the Commons vote.

Mr. ED MILIBAND (Labour Party): Sir, it is unusual, to put it mildly, for a motion in this House to succeed before the debate on it begins.

(Soundbite of laughter)

FOLKENFLIK: That's Ed Miliband of the opposition Labour Party reacting to the abandonment of the bid for BSkyB.

Mr. MILIBAND: Make no mistake, the decision made by News Corporation was not the decision they wanted to make. It may have been announced before this debate, but it would not have happened without it. Above all, this is a victory for people, the good, decent...

FOLKENFLIK: News Corp already owns 39 percent of BSkyB, but the company counted on the full acquisition to help drive future profits in the U.K. and Europe. The announcement that News Corp would drop the effort, issued in the name of Chief Operating Officer Chase Carey said, quote, "It is too difficult in this climate."

Former Labour Prime Minister Gordon Brown said he stood up to the company's plans for greater consolidation and alleged that, as a result, he became one of many targets of their unscrupulous reporting.

Mr. GORDON BROWN (Former Prime Minister, United Kingdom): Not the misconduct of a few rogues or a few freelancers but, I have to say, lawbreaking often on an industrial scale, at its worst dependent on leaks with the British criminal underworld.

FOLKENFLIK: The Labour Party under Brown sought Murdoch's blessing, too. He didn't get it and he lost.

Today, his successor, David Cameron, announced the shape and scope of two inquiries he's requested from a distinguished senior judge. The first is a review into the culture of the press, how it's regulated and its often cozy relationship with political figures.

The second, a criminal inquiry, will examine allegations against the News of the World and other papers involving hacking mobile phone voicemails and bribes to police officers. Additionally, it will investigate whether News Corp executives covered up the scandal and why senior police officials shut down earlier investigations.

Murdoch, an Australian who went on to become an American citizen, made his name in London. This scandal killed the tabloid that propelled his media empire and dashed, at least for now, his vision for the coming decade.

David Folkenflik, NPR News, London.

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