Murdoch to close scandal-hit News of the World

LONDON, (Reuters) – In a breathtaking response to a  scandal engulfing his media empire, Rupert Murdoch moved today to close down the News of the World, Britain’s biggest  selling Sunday newspaper.
As allegations mounted this week that its journalists had  hacked the voicemails of thousands of people, from child murder  victims to the families of Britain’s war dead, the tabloid had  haemorrhaged advertising and alienated millions of readers.

James Murdoch
James Murdoch

Yet no one, least of all the 168-year-old paper’s staff, was  prepared for the drama of a single sentence that will surely go  down as one of the most startling turns in the 80-year-old  Australian-born press baron’s long and controversial career.
“News International today announces that this Sunday, 10  July 2011, will be the last issue of the News of the World,”  read the preamble to a statement from Murdoch’s son James, who  heads the British newspaper arm of News Corp .
Hailing a fine muck-raking tradition at the paper, which his  father bought in 1969, James Murdoch told its staff that the  latest explosion of a long-running scandal over phone hacking by  journalists had made the future of the title untenable:
“The good things the News of the World does … have been  sullied by behaviour that was wrong. Indeed, if recent  allegations are true, it was inhuman and has no place in our  Company. The News of the World is in the business of holding  others to account. But it failed when it came to itself.
“This Sunday will be the last issue of the News of the World  … In addition, I have decided that all of the News of the  World’s revenue this weekend will go to good causes.
“We will run no commercial advertisements this weekend.”
Steven Barnett, professor of communications at Westminster  University, said he was “gobsmacked”:
“Talk about a nuclear option,” he told Reuters.
“It will certainly take some of the heat off immediate  allegations about journalistic behaviour and phone hacking.”
Tom Watson, a member of parliament from the opposition  Labour party who had campaigned for a reckoning from the paper  over the phone hacking scandal, said: “This is a victory for  decent people up and down the land.
“I say good riddance to the News of the World.”

GOVERNMENT TIES
It was unclear whether the company would produce a  replacement title for the lucrative Sunday market, in which,  despite difficult times for newspaper circulations, the News of  the World is still selling 2.6 million copies a week.
One option, analysts said, might be for its daily sister  paper the Sun to extend its coverage to a seventh day.
News of the World journalists were stunned. Anger may be  directed at top News International executive and Murdoch  confidante Rebekah Brooks, who edited the paper a decade ago  during the period of some of the gravest new allegations.
“We didn’t expect it at all. We had no indication. The last  week has been tough…none of us have done anything wrong. We  thought we were going to weather the storm,” said one News of  the World employee who asked not to be named.
The scandal had deepened with claims News of the World  hacked the phones of relatives of British soldiers killed in  action in Iraq and Afghanistan.
The military veterans’ association broke off a joint  lobbying campaign with the paper and said it might join major  brands in pulling its advertising.
The British Legion said it could not campaign with the News  of the World on behalf of the families of soldiers “while it  stands accused of preying on these same families in the lowest  depths of their misery”.
Signalling how far the racy, flag-waving title has alienated  a core readership already horrified by suggestions its reporters  accessed the voicemails not only of celebrities and politicians,  but also of missing children and crime victims, an online  boycott petition had garnered hundreds of thousands of  signatures.

TELEVISION TAKEOVER
The Conservative-led government had already backed a deal  for News Corp to buy out the 61 percent of BSkyB it does not  already own, and says the two cases are not linked. But U.S.  shares in News Corp fell over 5 percent on Wednesday, though  they recovered somewhat in a stronger general market today.
Formal approval for the deal had been expected within weeks  after the government gave its blessing in principle. But it now  seems unlikely for months, although officials denied suggestions  that they were delaying a decision because of the scandal.
“The Secretary of State has always been clear that he will  take as long as is needed to reach a decision. There is no  ‘delay’ since there has been no set timetable for a further  announcement,” a government spokesman said. Some British media  reported that a decision was now expected in September.
Critics, notably on the left of British politics, say giving  Murdoch full control of Sky television would concentrate too  much media power in his hands and risk skewing political debate.
British Prime Minister David Cameron has proposed inquiries into the newspaper and into  the wider issue of ethics in the cut-throat, and shrinking, news  business. Arguments over privacy, free speech and the power of  the press have already stirred heated debate this year.
However, critics called Cameron’s move to set up official  inquiries a tactic to push the embarrassing affair far into the  future. The precise form of those inquiries is still unclear.
Labour opposition leader Ed Miliband has called for the  BSkyB deal to be referred to the Competition Commission and said  that Brooks, Murdoch’s most senior British newspaper executive,  should quit: “The prime minister has a very close relationship  with a number of the people involved in this,” said Miliband.
“He should ignore those relationships and come out and say  the right thing because that is what the country expects.”

PERSONAL TIES
So far, Murdoch has said he will stand by Brooks, 43, who  edited the paper from 2000 to 2003, when some of the gravest  cases of phone hacking are alleged to have taken place. She is a  also a regular guest of the prime minister, and enjoys good  relations with previous Labour leaders in power until last year.
Senior politicians from all parties, including Cameron and  Miliband, rubbed shoulders with Murdoch, Brooks and other News  Corp executives at Murdoch’s exclusive annual summer party last  month, underlining the power his organisation wields.
Both Miliband and Cameron chose former News International  employees as media advisers, although Cameron’s choice of Andy  Coulson, who succeeded Brooks as News of the World editor, has  caused the prime minister the more obvious problems.
Coulson quit the paper over the first hacking case in 2007  and went to work as Cameron’s spokesman. He resigned from the  prime minister’s office in January as police reopened inquiries.
The main accusations are that journalists, or their hired  investigators, took advantage of often limited security on  mobile phone voicemail boxes to listen in to messages left for  celebrities, politicians or people involved in major stories.
Disclosure that the practice involved victims of crime came  when police said a private detective working for the News of the  World in 2002 hacked into messages left on the phone of murdered  schoolgirl

Reaction:

PROFESSOR IAN HARGREAVES, CARDIFF SCHOOL OF JOURNALIST,  MEDIA AND CULTURAL STUDIES
“This is an astonishing and unprecedented act. It is  appropriate to the moral horror that the owners of the newspaper  faced, but it does not yet answer a number of questions.
“A thorough inquiry is still needed to ensure that we know  the extent of these heinous acts. That must include asking the  question whether other newspapers have been guilty of similar  crimes.
“Killing the paper does not kill the story.”

ADRIAN SANDERS, MEMBER OF PARLIAMENT FOR THE LIBERAL  DEMOCRATS, THE GOVERNMENT’S JUNIOR COALITION PARTNER
“The cynic in me suggests that this is a ploy to take the    pressure off the BSkyB merger and that when that is out of the    way something will rise from the ashes.
“I hope I’m wrong but the track record of this company and    those within it suggests that cynicism is the right response.
“When you do something as dramatic as this, the hope is that  people will notice. It is a big gesture and most people will see  the headline and think that something has happened — in that  sense it will take the pressure off.”

MICHELLE STANISTREET, GENERAL SECRETARY OF THE NATIONAL  UNION OF JOURNALISTS

“It’s comes as an incredible shock – the announcement James  Murdoch should be making tonight is the dismissal of Rebekah  Brooks.”
“It is the people at the top who need to be punished, not  ordinary working journalists.”

CLAIRE ENDERS, HEAD OF ENDERS ANALYSIS MEDIA CONSULTANCY

“Our view is that this does not mean the News of the World  will be closed. It will simply mean that there will be a seven  day Sun. The stain on the brand was going to be permanent, and  this is a perfectly sensible decision.”

STEVEN BARNETT, PROFESSOR OF COMMUNICATIONS, WESTMINSTER  UNIVERSITY
“Astonishing. I’m completely gobsmacked. Talk about a  nuclear option. You’ve got to feel sorry for the people who work  on it. There are people who are going to lose their jobs.”       “It could just be a fairly cynical ploy and there will be a  new News International Sunday newspaper. It could well be that  three months down the line the scandal’s calmed down a bit and  they launch a new Sunday tabloid.”       “It’s a lightning conductor.”        “It will certainly take the heat off some of the immediate  allegations about journalistic behaviour and phone hacking.”       “I suspect that they are fearing the worst in terms of more  revelations coming out, and can now turn around and say: ‘What  more can we do? We have cut this thing off at the roots.”       “Rebekah Brooks is still there and is still appointed by  Rupert Murdoch to run the inquiry. That is still untenable. It’s  important that we don’t get distracted by this announcement from  asking some very serious questions.”

STEPHEN ADAMS, FUND MANAGER AT TOP 10 BSKYB SHAREHOLDER  AEGON ASSET MANAGEMENT

“We see it (shutting down News of the World) as something to  restore or remedy a tarnished reputation for the News Corp  group. But we also critically see it as a reflection of New  Corp’s desire to progress the BSkyB bid and have full ownership  of the company.”

UNNAMED BANKER ADVISING EUROPEAN MEDIA COMPANIES

“I am very surprised at this, but I still don’t think it is  enough for the Sky deal to get through. I think there will still  have to be some scalps, including Rebekah Brooks. People are out  for blood.”

TOM WATSON, OPPOSITION LABOUR MEMBER OF PARLIAMENT

“Let’s be clear, it’s not Rupert Murdoch that has closed  this paper, it is decent families up and down the country who  have shown outrage at the revelations that have bombarded this  company all week,” Watson told Sky News.      “This is a victory for decent people up and down the land  and I say good riddance to the News of the World.”

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