News Corp chairman and chief executive Rupert Murdoch, along with his son James, appeared before MPs this week to answer questions about the phone-hacking scandal. He denied responsibility for it and added that he was “the best person to clean this up”. Shares in News International rose during the hearing.
What the commentators said
Murdoch claimed that for years he knew nothing about the escalating scandal in Britain “and no one was telling him”, said Damian Reece in The Daily Telegraph. “But neither was he asking, if you believe his account of the casual and irregular conversations he has with editors.” Murdoch’s “inability to show he has a grasp on his operations suggests he cannot continue to head it for much longer”, said David Prosser in The Independent. That’s why the share price rose – News Corp’s owners are looking forward to the post-Murdoch era. The price has been suppressed by his family’s dominance of the share register and worries about his “power and judgement”.
There have been quite a few missteps over the past few years that help explain the “Murdoch-discount” in the share price, said The Economist. Six years ago Murdoch paid $580m for MySpace. Last month, he sold it for $35m. Dow Jones, owner of The Wall Street Journal, cost him $5.6bn in 2007. By 2009, its value was written down by 50%.
With or without Murdoch, News Corp’s problems look far from over. There have been calls for an inquiry into his dominance of the Australian media market. In America, his difficulties also extend beyond “schadenfreude… so thick you can’t cut it with a chainsaw”, as The Wall Street Journal put it. Amid talk of phone-hacking victims of the September 11 terrorist attack, leading politicians have called for the FBI and security exchange regulators to investigate News Corp. If any investigation revealed “transatlantic collusion with criminal activities in the UK”, the “fall-out would be explosive”, said Philip Sherwell in The Daily Telegraph.
There could also be scandals in areas that have no connection with Britain, now the “motives and tactics of the [entire] Murdoch empire” are under scrutiny, said Mary Elizabeth Williams on Salon.com. “A fish not only stinks from the head, it usually keeps stinking all the way down.”