July 14, 2011 in Nation/World

News Corp. ditches bid for BSkyB

Deal was linchpin of Murdoch expansion
Henry Chu Los Angeles Times
 
Associated Press photo

News Corp. chairman Rupert Murdoch arrives at his residence in central London on Wednesday.
(Full-size photo)

LONDON – Media mogul Rupert Murdoch’s latest effort at damage control, abruptly shelving his bid to take over Britain’s biggest satellite broadcaster, shows no sign of turning back the rising tide of public anger against him and his giant News Corp.

The decision to ditch the $12-billion bid, at least temporarily, was a humiliating turnaround for Murdoch, who is struggling to keep the fallout from a deepening newspaper phone-hacking scandal from contaminating the rest of his global media empire. Taking control of BskyB, of which Murdoch’s News Corp. already owns a 39 percent share, was the linchpin of his corporate expansion plans in Britain.

But intense pressure from politicians and ordinary Britons made forging ahead with the bid untenable, and could even wind up threatening Murdoch’s hold on other media properties in Britain. Among them are some of the nation’s top-selling newspapers, which have served for decades to strengthen his political influence.

Through Facebook and Twitter, Brits have urged each other to boycott Murdoch-owned publications such as the Sun and the Times of London, which have apparently lost tens of thousands of readers as a result. A grass-roots campaign called Hacked Off, whose supporters include actor Hugh Grant, is pressing the government to get to the bottom of the phone-hacking scandal.

The nation erupted in indignation last week over allegations that the News of the World hacked into the cell phones not just of movie stars and celebrities but of crime and terrorism victims as well. The newspaper is accused of intercepting and deleting voicemail messages left on the phone of Milly Dowler, a 13-year-old who was kidnapped in 2002 and later found murdered.

The Dowler family has become the face of ordinary Brits caught up in the country’s aggressive tabloid wars. Eager to be seen on the Dowlers’ side, the leaders of all three main political parties met with the family this week, including Prime Minister David Cameron on Wednesday.

In the House of Commons, Cameron announced the appointment of a senior judge to lead an official inquiry into the practices of the News of the World and other British papers, which is likely to keep the hacking scandal in the public eye for months. Rebekah Brooks, the head of News International, News Corp.’s British subsidiary, has herself warned of more shocking revelations to come.

In a terse statement outlining the decision to drop the BskyB bid, News Corp. deputy chairman Chase Carey said, “It has become clear that it is too difficult to progress in this climate.”

Besides abandoning the bid for BSkyB, the company has shut down the News of the World, the tabloid at the center of the hacking allegations. Some analysts say News Corp. may be forced to shed the rest of its publishing interests in Britain if it wants to shore up its reputation and have a shot at reviving its attempt for control of BskyB.


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