Tuesday, July 19

NYT: Murdoch's business identity under the microscope taken

Risk-taking and line skirting boards have only one more cost of doing business for Rupert Murdoch.

But the ever-growing hacker voice mail scandal in the British tabloid news of the world threatens the company stain's image in a way that other embarrassing incidents in far-flung media properties News Corporation - which include Fox networks and the New York Post — do not have.


In the past Mr Murdoch either has outlasted his critics or quickly acted to limit the impact. And on Wednesday was in the damage control mode again. The company moved quickly to condemn, the hacker and present their intention to cooperate with the police, but to prove the damage was difficult to contain.


There is a growing consensus within the enterprise, that Rebekah Brooks, who became Chief Executive of news international and unique Editor, the focus of much of the outrage of the hacking, be forced from her job, according to people with knowledge of the discussions within the News Corporation.


The possibility of the dismissal is one that several people was close to Mr Murdoch that he fiercely resist Mrs Brooks said, because he to her loyal and the campaign against them as a vendetta by political enemies of the company.


One who said these people, who wanted to be identified not discuss internal matters, was also one it the Andy Coulson believe within the company, also more and more stop the former news of the world editor, which was forced, as Communications Director of the British Prime Minister, under control will come.


So far was the damage limited view of the company. Not yet heavy financial losses, face make the News Corporation, even if the advertiser boycott of the news of the world grows. However, was the company's shares 3.6 percent on Wednesday to $17.47, after rising for most of the year. The episode could threaten the largest business on the News Corporation plate: British approval its full acquisition by BSkyB, the satellite TV companies.


David Bank, a media analyst for RBC capital markets, said that the hackers scandal was so far a blip in the company large business conducted.


"It feels like much more noise than substance," he said newspapers, how little in the face on the net profit contributed. The news of the world is only a piece of news international large presence in the UK. The company publishes also the times of London and the Sun.


Overall, revenue from the publishing subsidiary of News Corporation accounted for only 17 percent of sales in the last nine months. During this time, cable network programming accounted for 61 per cent, and film, including 20th Century Fox Studio, was 20 percent.


Mr Murdoch was clear enough about the consequences of hacking scandal, that he convened what close described someone Valley, Idaho, to him as a "War Council" in the Sun in which he a media conference concerned visited. Mr Murdoch was on Wednesday with Wendi, his wife and his son Lachlan. Mrs Murdoch was seen by a reporter at the Conference, but Mr Murdoch was not.


Mr Murdoch, weighing in the controversy for the first time since some leaders of Britain's called for an investigation of the News Corporation news-gathering practices, the allegations of hacking "regrettable and unacceptable" called and swore requests to cooperate with police.


But with damaging revelations about the extent of hacking emerging every day - the latest was reported that the news of the world, voice-mails are accessed relatives of dead soldiers had — Mr. Murdoch's shame could go only so far expressions of disapproval.


"Depending on, where the investigation goes, how widespread it is and who what, when knew that is something that could tarnish him seriously,", said REM Rieder, editor and senior Vice President for the American Journalism Review. "This seems institutional."


The News Corporation is no stranger to scandal. Fines for indecency complaints charging anti-competitive business practices and defamation claims are a fact of life for the company, which was able, which easily absorb financial inconvenience.


In 2009, advertisers Glenn Beck Fox boycotted news program, after the host said racist was President Obama. The action in stride, said Fox move advertising dollars on other time slots. And in January the company for communication presented had accused that a 500-million dollar settlement, a subsidiary of News Corporation trying to get a monopoly on the in-store coupon business.


The most recent prominent incident with the Federal Communications Commission came last year, after the network showed an episode of "American Dad", in which a horse appeared on the a character ejaculating face. The Commission proposed fine of $ 25,000. This week, the was New York Post sued for libel by the hotel maid, Dominique Strauss-Kahn, the accused former head of the International Monetary Fund, sexual violence. The post of the maid called on prostitutes in his coverage of the case.


In the UK, advertisers started the news of the world, remove to avoid displaying the popular press. Some of these companies included Ford, Mitsubishi, the Lloyds Bank Group and Virgin Holidays. But losses, seem likely to remain contained, as long as the scandal in the United Kingdom. "I think, it is contained," said Mr Bank.


The greatest risk would be to the planned purchase of BSkyB. Corporation already has the news about 39 percent of the company and for one year, to acquire the rest tried. The acquisition of the company would tighten grip on British Broadcasting, but it has faced, control of critics who say that a company should have it not as much control of the television market.


The review of the transaction was expected, that to end on Friday and all indications have been that the News Corporation win approval.


Ofcom, the UK regulator, said in a statement on Wednesday that it wasn't responsible for the investigation of hacking "which are really in the hands of the police and the courts", but it was "Closely monitoring of the situation and in particular the investigations by the competent authorities to the alleged illegal activities."


""I think people ask themselves,"this is a problem for the BSkyB transaction be?" "Said Mr. Bank.""I can not imagine, that it does in any material way." But he said: "It is a very inconvenient time."


This story, "Under pressure, the Murdoch-style" appeared originally in the New York Times.


Tim Arango and Evelyn M. roof contributed reporting.

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