Rupert Murdoch’s Empire
July 14, 2011 by staff
Rupert Murdoch’s Empire, Rupert Murdoch’s decision, which was down to 8 million for full ownership of British Sky Broadcasting, puts into question its continued leadership of the News Corporation and the future of its British newspapers.
The decision was dictated by the fact of the House of Commons prepares to vote on the offer put on hold indefinitely. Murdoch and his advisers knew they could not defy the will of Parliament.
Beyond that, the decision must have been motivated by concerns about continuing losses in the value of News Corporation and the threat of the phone hacking scandal that triggered the crisis in the Murdoch empire will spread to the United States.
Murdoch saga is destined to run for years, a prospect that may prompt major shareholder of News Corporation to insist that the head of 80-year-old company and other members of his family to one side in an attempt to remove the stench of scandal and criminality of an operation of billions of dollars across three continents.
BSkyB would be the crown jewel in Murdoch holdings in Britain. News Corporation already owns a majority stake of 39 percent in television and is projected to earn billions in the coming years.
Now News Corp. may even be necessary to dispose of the share of 39 percent if Ofcom, the watchdog of the communications industry, finds that its executives are not fit and proper persons to remain part of BSkyB.
No BSkyB, the rest of Murdoch’s newspapers in Britain, the Times, the Sunday Sun-Times and the tabloid can be seen by News Corporation, as tainted by the scandal that is not worth cling. They face the threat of losing advertisers and readers, and may be subject to investigation to determine whether they, like the Murdoch News of the World that ended on Sunday, also participated in the telephone questionable practices of piracy and other.
But the problem for Mr. Murdoch is that it can be difficult to find buyers for these properties.
Concern over the scandal News Corporation’s probably headed to the alarm after the U.S. Sen. Jay Rockefeller, chairman of the Senate Commerce Committee on Tuesday called an investigation into whether piracy telephone directed to any U.S. citizen and if journalists News Corporation had broken U.S. laws.
The American market is much more important that the News Corporation of Great Britain and the company will be eager to try to stem the tide of negative events in Britain before further damage is done.
But that will not be easy to do.
The prime minister, David Cameron, Lord Justice Brian Leveson appointed Wednesday to oversee a public inquiry into the scandal of global news and regulation of the media. Mr Cameron said the investigation would begin “as soon as possible” and be in two parts: an investigation of irregularities in the press and police, and a review of the regulation of the press.
Lord Justice Leveson is a judge of the Court of Appeals and shall have power to call the media owners, editors and politicians to testify under oath. All this can continue for at least two years.
When Mr. Murdoch flew to London on Sunday, were all smiles and was confident he could put out the fire threatening his empire, and may even retain the services of Rebecca Brooks, besieged chief executive of the British arm of News Corporation, News International.
With the withdrawal of his candidacy for BSkyB, it seems that reality has finally dawned. The man who until a few weeks could cow prime ministers and other politicians by threatening to withdraw their favor has been stripped of the last vestiges of their influence in the United Kingdom. The relationship between politicians and media moguls will never be the same again.
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