Following the closure of News Corp-owned British tabloid News of the World after revelations that the paper hacked the cell phones of 9/11 victims, murder victims and dead soldiers, Rupert Murdoch has withdrawn the company's $12 billion bid to take over British Sky Broadcasting, the largest satellite broadcasting company in Britain. In a statement, News Corp's deputy chairman said, "We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has come clear that it is too difficult to progress in this climate."
And it appears that all the shoes have yet to drop: the Times reports that former British Prime Minister Gordon Brown alleged yesterday that The Sunday Times, another more "prestigious" News Corp-owned paper hired "known criminals" to sift through his personal information, such as bank accounts and legal records. Brown also claimed that the News Corp-owned The Sun "used subterfuge to learn in 2006 that Mr. Brown's son had cystic fibrosis."
The scandal has tarnished Scotland Yard, as policemen routinely took bribes from News of the World employees for information and confidential documents, as well as Britian's Conservative Party: Prime Minister David Cameron's former spokesman was Andy Coulson, who was editor of the News of the World when some of the more salacious activity occurred. Mr. Cameron said yesterday that News International, News Corp's British subsidiary, needs to "stop the business of mergers and get on with cleaning the stables." Given that cable network programming accounts for the largest share of News Corp's revenue (61 percent) the botched deal could mean a serious blow to the company's bottom line. New Corp stock has tumbled around 14% in the last week.
In addition to growing calls from all three of Britain's political parties for Rupert Murdoch to testify before a committee regarding the scandal, West Virginia Senator Jay D. Rockefeller IV asked officials to investigation whether or not the tactics that spawned the scandal overseas had bled into News Corp's American divisions. The Times reports that Rockefeller said the illegal hacking "by News Corporation newspapers against a range of individuals—including children— is offensive and a serious breach of journalistic ethics. This raises serious questions about whether the company has broken US law."
For their part, News International's president and son of Rupert Murdoch, James Murdoch, issued an apology, saying the company had "failed to get to the bottom of repeated wrongdoings that occurred without conscience or legitimate purpose…those who acted wrongly will have to face the consequences." It remains to be seen if the recent allegations that the Murdoch-owned New York Post committed libel in publishing assertions about Dominique Strauss-Kahn's accuser that the paper may have know to be false, will bring the scandal across the pond.