News Corp. Dynasty Crumbles From The Top Down

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Two top names at Rupert Murdoch's News Corp. resigned on Friday. Earlier in the week, Murdoch had to abandon his $12 billion bid to takeover BSkyB, the British broadcaster. Meanwhile, the FBI has opened an investigation into whether reporters working for News Corp. tried to access cellphone messages and records of 9/11 victims here in the United States. Host Scott Simon speaks with Clive Crook, columnist for the Financial Times and a contributor to the Atlantic.

SCOTT SIMON, Host:

This is WEEKEND EDITION from NPR News. I'm Scott Simon. Now, the latest in that phone-hacking scandal, involving Rupert Murdoch's News Corporation. Yesterday, two top company names resigned. Rebekah Brooks, the chief executive of Mr. Murdoch's British newspaper operations. And then last night, Les Hinton, the chairman of Dow Jones, stepped down as well. Yesterday, Mr. Murdoch met with and apologized to the family of a murdered school girl, whose cellphone was allegedly hacked into by News of the World reporters. Earlier in the week, he had to abandon his $12 billion bid to takeover BSkyB, the British broadcaster.

And meanwhile, the FBI has opened an investigation into whether reporters working for News Corp. tried to access cell phone messages and records of 9/11 victims here in the United States. For more, we're joined by Clive Crook. A columnist for the Financial Times, senior editor at the Atlantic Monthly, who's here in our studios. Clive, thanks so much for being with us.

CLIVE CROOK: Pleasure.

SIMON: Help us understand how serious. All these hits, the resignations, the abject apologies that Mr. Murdoch has had to make...

CROOK: Right.

SIMON: ...for the first time in my memory, how big a dent that they represent in his holdings and his influence?

CROOK: Well, it's huge. I mean just listening to you list that catalog of disasters, I mean each one came as another big shock. It was bad enough to begin with. You know, as you say, it began with the scandal over the hacking of the kidnapped girl's phone. But seems like every day there's a new thing. And, you know, News Corp.'s efforts to stop the rot have failed again and again. You know, they dramatically closed down one of their oldest British papers, which was at the time regarded as a huge thing. And I think they hoped that would, you know, stop the crisis right there but it's failed and so far nothing they've has been enough; the apologies, you know, the appearances, the resignations, it's still going on.

As you know on Tuesday, Rupert Murdoch...

SIMON: Yeah.

CROOK: ...and his son will go before the House of Commons committee, give evidence on the crisis. Who knows what's going to happen at that. So I mean they're very far from stabilizing the situation, and I think it is beginning to feed back in a back way on their business.

SIMON: And let me draw you out about that. Can you foresee them having to make incisions in their holdings? I mean there are the inevitable reports of well, how that might affect the...

CROOK: Yeah. People are talking about it. Now that, you know, the discussion about whether they'll retain the newspaper business in Britain.

SIMON: Mm-hmm.

CROOK: And in many ways it would be tempting to get rid of it because it's not all that profitable. It used to be. I mean when Murdoch first acquired this business in Britain, it was a cash cow. I mean it financed a lot of his other undertakings and, you know, he ran it very well from a commercial point of view. But, you know, as you know the Internet revolution has turned the economics of the newspaper business upside down and they're no longer critical by any means to his business a lot of people would say, some of his shareholders would say. They're actually a drag on the business. So I wouldn't be surprised much as he would hate to get rid of them, because I think he enjoys owning them...

SIMON: Yeah.

CROOK: He is a newspaper man to his fingertips. I wouldn't be surprised if they end up having to shut that business. And then, you know, this is a bit more remote but questions begin to arise about his holdings in the U.S. as well, depending on how that side of the story plays out.

SIMON: Yeah. Are there some observations to be made over the past couple of weeks since the scandal has been unfolding about the differences in press between the U.S. and political influence between the U.S. and the UK? And you, we note, you're part of the flowering of the interchange between the two.

CROOK: Yes. That's right. Flowering is the word.

(SOUNDBITE OF LAUGHTER)

CROOK: Yes, that's right. Well, I think there are a couple of things that strike me. One I think has already attracted quite a lot of attention, and that is the - well, I don't want to seem too disloyal to my British colleagues, but I think few would disagree that standards and practices in the news gathering business are lower in Britain. I mean one of the striking things is that these kinds of shady dealings were sort of tacitly accepted for years in Britain, it went on for a long time.

And it was only when this allegation about hacking the dead girl's phone came out that people were so scandalized that they turned around and began denouncing practices that really the country had put up with for a long time. Those standards would never have been accepted in the U.S., so that's one big difference. But I want to draw attention to...

SIMON: The political influence. Yeah.

CROOK: Yeah, the political influence thing is very interesting. An important aspect of this story in Britain is the close relationship between the newspaper business, Rupert Murdoch's business, and leading politicians - not just the Tories though, the current prime minister is very embarrassed by this.

SIMON: Yeah.

CROOK: But Labour is just the same, all the parties are just the same. They have to get on with the newspapers. And why is that? I think it's interesting that they have to because Britain has largely succeeded in getting money out of politics, something many Americans would like to do here. The consequence of doing that is that the newspapers become incredibly important and you have to have them in your pocket if you're going to do well.

SIMON: Clive Crook at the Financial Times and Atlantic Monthly, thanks so much.

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