Fallout from the phone-hacking scandal at News Corp. may threaten the Murdoch family’s $48 billion empire, recent news articles suggest.
The
Financial Times
reported
that “as many as 4,000 celebrities, politicians, sports stars and ordinary members of the public had had their phones hacked.”
According to
an article in
Crain’s New York Business:
Analysts and observers believe that the fallout could bring down [News Corp. CEO Rupert] Murdoch and his son James Murdoch, who admitted … that he had approved payments to phone-hacking victims….
The scandal has jeopardized the company’ $12 billion purchase of the 61% of British pay-TV service BSKYB that News Corp. doesn’t already own. The pending deal was orchestrated by James Murdoch, News Corp.’s CEO, International, and is seen as confirming the heir apparent’s bona fides.
The
FT
article said:
The handover to James freed his father to concentrate on a new prize, his newly acquired
Wall Street Journal
— a deal said to have rejuvenated [Rupert’s] newspaper passions after unhappy digital flirtations. With this, his focus turned to a new enemy, the
New York Times
…. His older titles simply lost much of his attention.
One family counsellor claims members of News Corp.’s tight London team have let Mr. Murdoch down by trying to insulate him. If there was a cover up, “they were trying to cover it up from Rupert.”
The
FT
report said that supporters of James Murdoch’s siblings Lachlan and Elisabeth “agree with one leading shareholder that the saga ‘could be a big blow’ to James’s chances.” Citing an anonymous source, the report said Rupert Murdoch had told the three children “that it was time to have ‘all hands on deck.'”
The
FT
article said Rebekah Brooks, the News Corp. executive and former
News of the World
executive at the center of the phone-hacking scandal, is “beloved” by the Murdoch family.
Her Murdoch charm offensive began with the children, says and adviser to News Corp.’s chairman….
Thus far the family has stood firmly by her. Rupert and James have named her as the right person to lead the company through the crisis even though critics say she is hopelessly compromised….
[News Corp.] insiders say standing by Ms. Brooks is akin to the family strapping itself to a time bomb. Rupert Murdoch does not like being told by others whom he may employ. Furthermore, the Murdochs recognise the demands for scalps would not stop with her and that while she remains she is a lightning conductor for others the patriarch holds even more dear.
(Sources:
Financial Times,
July 9/10, 2011;
Crain’s New York Business,
July 10, 2011.)
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