Rupert Murdoch’s annus horribilus has become more annus, despite some pleasant smelling stuff in the form of a sharply higher half-year result from BSkyB, the UK satellite broadcaster that News Corp is trying to nail with an £8.3 billion offer that is already hundreds of millions of pounds under the market.
This year we’ve already seen Murdoch battle the impending collapse of the sale of MySpace, bought in late 2005 for $US580 million and now worthless after losses and impairment charges doubled the initial cost. The iPad newspaper has been delayed from the US branch of the empire, but now the company says it will be out on February 2, the day News Corp reports second quarter figures in the US (February 3 here).
That will provide a welcome distraction from the ever-growing News of The World phone-hacking scandal, which is deepening by the day with more and more people claiming to have been hacked, and now the former assistant editor (news) at the News of The World being sacked this week.
The scandal has forced Murdoch to the Davos talkfest to handle the phone-hacking scandal and attempt to get his bid for BSkyB back on track.
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A minor irritant has been the sacking of two leading Sky Sports soccer callers for making s-xist remarks. One, Andy Gray, actually claims the News of The World hacked into his phone, according to this handy list from the Guardian. That’s called eating your own. The NoW didn’t discriminate. After being made to walk the plank, what’s the betting Gray decides to pursue his claims for a spot of get-square over his sacking?
Murdoch will have to chance to comment when News Corp reveals its first-half and second-quarter results next Thursday morning, Sydney time. Murdoch was absent from the first quarter briefing, with COO Chase Carey the designated hitter. No doubt there will be a lot about the new app newspaper and as little as possible about the hacking scandal (watch for Murdoch to claim that he can’t comment because of a police inquiry in London).
The News of The World phone-hacking scandal continues to explode in Murdoch’s face and that of son James, the executive in charge of London.
News International (the London arm of News Corp) on Wednesday sacked the suspended Ian Edmondson, assistant editor for news at News of The World after it found email evidence of more phone hacking. The evidence was handed to the police in London who have reactivated an inquiry that was abandoned last year.
Edmondson’s sacking undermines the position long maintained by the NoW and News International, that phone-hacking at the paper was the work of one rogue reporter. Not only that, News International and senior executives, plus News Corp, rejected claims by the Guardian and The New York Times last year that the hacking was more extensive.
Of considerable amusement is this rejoinder to the New York Times from Bill Akass, the managing editor of the News of The World. Akass accused the Times of bias and conflict of interest, but failed to rebut the central points of the feature last September on the extent of the phone hacking. That has now been confirmed by subsequent events
Now there are reports that a relation of Sienna Miller, the UK actress whose legal action sparked the escalation of the story, is to sue News claiming the phone hacking was still going on in the last year.
“The crisis at the News of the World intensified today with the release of new material which confirms that the paper is being accused of attempting to hack into the phone messages of a public figure within the last year.
“The material — a high court document and a brief statement from lawyers — shows that Kelly Hoppen, an interior designer who is stepmother to the actor Sienna Miller, is suing the News of the World and one of its feature writers, Dan Evans, for ‘accessing or attempting to access her voicemail messages between June 2009 and March 2010’.
“The Guardian has previously reported that Dan Evans was suspended in April last year. Details of the case remain concealed by court orders. However, a senior News International executive has claimed that Dan Evans’s defence is that he phoned Kelly Hoppen’s number for legitimate reasons and accidentally accessed her voicemail when the keys on his phone got stuck.”
(That’s the equivalent of the dog ate my homework.)
Having jettisoned Edmondson, the question is who in the News hierarchy knew of what he was doing, and who will be next to go if the scandal starts to bite deeper? There are calls for a judicial inquiry into the scandal.
The scandal raises the political and business pressure on News Corp’s controversial bid to buy the 60.9% of British Sky Broadcasting that it does not already own.
The importance of BSkyB was underlined on Thursday night with the broadcaster revealing very strong results for the six months to December. Revenue up 15% and operating profit jumping 26% to £520 million (about $US840 million), making it the most profitable part of the News Corp group outside of Fox News and Cable in the US.
BSkyB had the fastest growth in 10 quarters in the three months to December 31, picking up a net 204,000 broadband customers. It topped the 10 million customer barrier in the second quarter, (when 140,000 new net subscribers joined). It now has 3.5 million paying for its high definition service.
News Corp has already had a 700p-per-share bid rejected for the 60.0% of BSkyB it doesn’t already own, with UK culture secretary Jeremy Hunt saying he intends to refer any revised offer to the Competition Commission. That will be only after he has unprecedented talks with Murdoch and News executives to discuss the bid and possible changes. Imagine a bank or a big industrial company getting the chance to pitch a new bid in talks with the government minister who will make the decision. There would be an outcry, but the UK government is just as supine when it comes to Murdoch as the Labour government was (remember Tony Blair talking at a News Corp talk fest in Queensland just after he became UK Opposition leader?).
But the soaring profits at BSkyB underline the importance of the takeover to Murdoch’s empire; it’s dying apart from the abrasive Fox cable business and the associated news channels.
With Comcast getting the green light to absorb NBC Universal, News Corp has fallen further behind in the pecking order of media giants, which is something Murdoch really hates, although he tries to make a virtue out of being the underdog or outsider.
In London, he’s neither. He’s a big deal, with a nasty scandal that is starting to resemble the tar baby children’s story from years ago.