Rupert Murdoch’s global media monolith—which includes key players in America’s right-wing media echo chamber, Fox News channel, the New York Post and the Wall Street Journal—is in meltdown.
A headline in Britain’s Independent newspaper Thursday morning cried: “Murdoch Empire in Crisis.”
Murdoch’s News Corporation announced Thursday that it would close Britain’s 2.8 million–circulation News of the World—once the highest-circulation newspaper on the planet—in response to a scandal that has exposed the sleazy practices of Murdoch’s employees. The immediate decision to close the 168-year-old newspaper came following revelations that a private investigator employed by the newspaper had allegedly hacked the cellphones of the families of British soldiers killed in Afghanistan and Iraq.
The closure of one of the largest newspapers in the world is a desperation move by Murdoch’s media empire, which is attempting to salvage its reputation and influence in the face of a scandal that has dominated the news in Britain for the past several days. It has now gone global (full disclosure: I’ve been commenting on it for the BBC World Service) and it has shaken Murdoch’s international empire.
In Britain, the damage is running deep, as members of Parliament—including Labour Party leader Ed Miliband—have called for placing a hold on the anticipated purchase by News Corp. of British Sky Broadcasting, a hugely-profitable satellite TV enterprise that Murdoch has coveted for years. The protest group Avaaz has led an aggressive campaign to challenge what was until not long ago expected to be the swift and easy approval of the purchase. Support for that campaign has surged in recent days. The closure of the News of the World by Murdoch is seen as a last-ditch attempt to secure approval of the deal. But it may not work.
Scotland Yard and other police agencies are reportedly investigating the abuses. Lawyers for victims of the hacking are describing the practice as “diabolical.” An emergency debate in Parliament brought allegations that News Corp. executives were “perverting the course of justice by engaging in a cover-up.” And the outrage in Britain is such that a dozen top companies have withdrawn advertising from the highly profitable News of the World.
News Corp. share values tanked to such an extent that it was estimated Murdoch and his family lost hundreds of millions on Wednesday alone. And the closure of a major property, and the threat to a high-stakes deal, will likely make things worse.