A committee of British legislators who investigated the phone-hacking scandal concluded with a majority verdict that the 81-year-old was ‘not a fit person’ to be at the helm of News Corp.Barry Neild email@example.com
LONDON: How do you solve a problem like Rupert Murdoch?
That’s the issue now facing sections of his media empire after a damning British parliamentary report labeled the powerful press tycoon unfit to run a major international company. A committee of British legislators who have spent months investigating the phone hacking scandal involving one of Murdoch’s leading UK newspaper titles concluded this week with a majority verdict that the 81-year-old was “not a fit person” to be at the helm of News Corp.
A day after the report, elements of his $50 billion media empire appeared to be attempting to distance themselves from Murdoch, not just by prominently reporting the committee’s scathing assessment, but by explicitly stating their independence of his command.
There was speculation that a small surge in News Corp share prices in the wake of Tuesday’s verdict reflected anticipation that the company would soon divest itself of its troubled UK newspaper titles and set wheels in motion to reduce Murdoch’s influence over the company.
Rupert Murdoch is “finished in the United Kingdom,” wrote Michael Wolff, author of The Man Who Owns the News, an unauthorised biography of the News Corp founder. “Understanding that Britain is a lost front, he will retreat to his US stronghold. From New York, the process of disposing of the British papers, which, by reliable insider accounts, has begun, will hasten.”
Of primary concern in the UK is whether the “not a fit person” verdict will have any impact on a separate inquiry by British communications industry regulator Ofcom over whether News Corp is a “fit and proper” owner of a lucrative 39.1 per cent stake in prominent broadcaster BSkyB.
Any decision that would force News Corp to offload its BSkyB holding would be a considerable blow to the media giant, which had hoped to buy the broadcaster outright but later abandoned the deal after the phone hacking scandal inflamed opposition.
On Wednesday, BSkyB’s chief executive, Jeremy Darroch, used the publication of record financial results to disassociate his company from Murdoch and — clearly wary of the threat to its prized broadcast license — talk up its annual $1.6 billion tax contribution to the British economy.
Aware of the potential damage his presence could bring to the company, Murdoch’s son James last month stood down as chairman of BSkyB, saying he didn’t want to be a “lightning rod” for criticism over the hacking scandal.
Speculation is now mounting over whether the News Corp brand will also be vulnerable to critical, financial and legal thunderbolts if Murdoch senior resists shareholder efforts to usher him into a backseat role.
“I think you have to be careful about extrapolating from what has been an appalling set of circumstances around one newspaper group…to the continuing demise of News Corp,” said Charlie Beckett, director of Polis, a media and society think tank at the London School of Economics.
Beckett said that plans would already have been in place to arrange a succession of command, and while these may now be fast tracked down from five years to two, News Corp would be unwise to proceed with too much haste.
“It’s in everyone’s interest for the thing to not fall apart in the next year or two. Even those people who want Murdoch to recede don’t want him to jump out of the top floor. That would be far too destabilising.”