Our readers predicted in last week’s web poll that News Corp will survive Britain’s phone-hacking scandal intact — a bold call, particularly as the situation continues to develop and fresh allegations emerge.
The Murdochs themselves seem particularly vulnerable after the resignation of several senior executives and even the Metropolitan police commissioner, who quit over his links to former editors at the News of the World, the newspaper at the centre of the scandal.
Rupert is chief executive of News Corp, the company he founded in Adelaide in 1979, while his son James has been managing the businesses in Europe and Asia since 2007. He also spent several years in Hong Kong running Star World.
The pair told British politicians last week that they had no idea phone-hacking was rife within the newsroom at the News of the World until early this year, but the company’s former legal chief has since contradicted that statement, claiming that James was told about the practice during a phone-hacking lawsuit in 2008 — brought by Gordon Taylor, the chief executive of the English footballers’ union, and settled out of court by News Corp for an estimated cost of $1 million.
It now seems the company settled this case and others to prevent further damaging evidence entering the public domain, but James continues to stand by his statement in parliament. According to his version of events, he knew nothing about the newspapers’ culture of phone hacking, even as he was signing cheques to keep that very fact quiet.
It is hard to believe that James can survive the scandal, but Rupert’s claim to ignorance is at least more plausible. Based in New York, he runs a global media empire of which the News of the World is only a small chunk — though he was surely being disingenuous when he said that it was merely 1% of his business, as if it was barely worth his time to think about. The newspaper might have been 1% of revenue, but the Murdochs clearly did not own the newspaper just for the money it earned them — its ability to shape political debate played an important role in maintaining a business environment conducive to their more profitable ventures.
That much is not lost on shareholders, some of whom are already calling for James to step down. And as pressure mounts from politicians in the UK, the US and elsewhere in the world, News Corp might eventually be forced to shed some of its assets, though our readers evidently think the Murdochs can cling to power and keep the company intact. Such a feat would make dodging a cream pie seem like child’s play.