Murdoch's News Corp. Still In Damage Control Mode Rupert Murdoch's media company has been under fire for a phone-hacking scandal in Britain. On Wednesday, News Corp. announced it was withdrawing a bid to buy full interest in the British broadcast company BSkyB. Murdoch has suffered a stunning loss of political influence in Britain.
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Murdoch's News Corp. Still In Damage Control Mode

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Murdoch's News Corp. Still In Damage Control Mode

Murdoch's News Corp. Still In Damage Control Mode

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It's MORNING EDITION from NPR News. I'm Steve Inskeep.


Twice now Rupert Murdoch's media empire has tried to contain the damage of a scandal.

INSKEEP: Last week, Murdoch's News Corporation closed the British tabloid News of the World amid a scandal over phone hacking, and that wasn't enough.

LOUISE KELLY: So yesterday, News Corp. abandoned its effort to buy provide full ownership in a British TV network. But of course investigations will continue.

INSKEEP: David, hi.

DAVID FOLKENFLIK: Good morning, Steve.

INSKEEP: People will be wondering, you just marvel at how such an influential company and a politically savvy company could be taking so many hits.

FOLKENFLIK: Well, you got to think back just eight days. You know, the Murdochs oversee two of the most popular newspapers in Great Britain and there's a reason for that. The papers serve up a lot of gossip, a lot of dish. But the way they came by it, it turns out, may have involved, as we now know, widespread phone-hacking and widespread illegal payments - bribes, really - to police. A terrible public outcry as some of the targets of that, it turned out to be, you know, crime victims, victims of terror attacks, other things. Politicians have scrambled to contain the damage. It turns out police may well have fumbled early investigations. And so there was a wall of opposition, as you suggested, to the Murdochs particularly taking over this major broadcaster, BSkyB.

INSKEEP: And even though it was News Corporation that announced it was dropping the bid, it seems that that was going to be inevitable, that they were going to have to. All three major political parties in Britain were preparing to vote against, vote in opposition to that bid.

FOLKENFLIK: That's right, a solid wall of opposition.

INSKEEP: So what's next?

FOLKENFLIK: Only Rebekah Brooks, who is the chief executive of British newspapers for News Corp. here in the U.K., can be compelled to testify. She's a British citizen. Rupert and James Murdoch are American citizens. But you know, that's gaining some force here as well.

INSKEEP: Wow(ph), just listening to you talk, David Folkenflik, about this giant company News Corporation, it's had to dropped a newspaper that was a big part of the corporation's past. It's had to drop a TV deal and TV is a big part of the company's present and seen as a big part of its future. And you've named not just Rupert Murdoch but his son James, which raises questions about succession and control of the company. Everything is involved here.

FOLKENFLIK: Well, I think everything is at stake in terms of figuring out how they move forward. It's about the future of the company. As you say, News of the World was very much important to the success of the British newspaper empire, which led to his expansion into television and into the American markets. But they're not the future. The money is in television. You know, BSkyB, if they had taken full control of the company - News Corp. has about 39 percent of it now - it would've added a lot to the bottom line. And will shareholders really ultimately accept this as a dynastic company with a guy like James Murdoch at the head, given all that's happened?

INSKEEP: Because Murdoch, James Murdoch, could be tainted by this, is what you're saying.

FOLKENFLIK: Oh, he's seen as overseeing a very problematic chapter in the company's history.

INSKEEP: David, thanks very much.


INSKEEP: NPR's David Folkenflik is in London, where investigations continue into Rupert Murdoch's News Corporation.

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