The British phone-hacking scandal that brought down Rupert Murdoch's storied tabloid News of the World is spreading like wildfire to other News Corp. newspapers including The Sun and The Sunday Times. Among the newly reported high-profile hacking targets: former Prime Minister Gordon Brown and his sickly young son; police investigating News of the World; the royal family's security detail; and even, allegedly, victims of the Sept. 11 terrorist attacks. And as Murdoch arrived in Britain on a damage-control mission, News Corp. shareholders in the U.S. filed suit accusing the board of gross mismanagement. Just how bad could this be for Murdoch's media empire?
Losing BSkyB would be a kick to the gut: Murdoch is in Britain for one reason: To save his bid to buy the remaining 61 percent of British Sky Broadcasting, says Heather Mallick in The Toronto Star. BSkyB is more than just his "hardline low-rent vehicle to crush the BBC" and invade China — it's his obsession, "his Rosebud," and the future of News Corp. Now, thanks to this "extraordinarily vicious" scandal, it's looking more and more like he may not get it.
"Has Murdoch finally outsmarted himself?"
His whole empire is at stake: If Murdoch were smart, he would "cut his losses" and give up on BSkyB, says Richard Levick in Forbes. British regulators are under enormous pressure to scotch the deal, which would mean declaring News Corp. not "fit and proper" to own Britain's largest broadcaster, essentially branding the whole empire "a renegade operation." A move of such "gravity" would certainly "justify closer scrutiny of all his holdings."
"Will News Corp. become a renegade organization?"
Fox News is safe: Most analysts seem to discount the possibility that the juicy British scandal could damage Murdoch's U.S. holdings, including the Fox networks and The Wall Street Journal, says James Poniewozik in TIME. And that "seems about right for now." But if, say, Murdoch loses control of News Corp., or a phone-tapping scandal surfaces stateside, there would be definite "consequences for the U.S. mediasphere." Otherwise, this fast-moving scandal will probably stop at the water's edge.
"The hacking scandal and the two faces of Murdoch"
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