News of the World closure: was it worth it?

With the BSkyB deal to consider, James Murdoch was in an awkward position. But this may have been a risk too far.

by Emma Haslett
Last Updated: 13 Jun 2012
Well. We didn’t expect that, did we? No doubt, when Ford led the march of advertisers boycotting the News of the World, it was planning on a resignation by Rebekah Brooks, followed by a quick renegotiation of rates and business as usual. But, as the world is now aware, James Murdoch took the hard line, and opted to shut the paper, insisting that it’s vital ‘this organisation lives up to the standard of behaviour we expect of others’. In other words, the plan was to weed out the rot to save the rest of the company. But could this move have the opposite effect, cutting off its nose to spite its face?

The slightly odd factor is that while the phone hacking scandal meant everyone with a Twitter account suddenly had an opinion on its behaviour (none of which were positive), not many had called for an out-and-out closure of the paper. Instead, Rebekah Brooks, NI’s chief exec (and editor of the NotW between 2000-2003) shouldered most of the blame, with everyone from Labour leader Ed Miliband to the PM calling for her resignation.

So why did Murdoch choose to take the nuclear option? It’s clear that he was in an awkward position: as the phone hacking scandal gathered pace, there was the small matter of News Corp’s bid for the 61% of BSkyB shares it doesn’t own. With whispers suggesting the scandal demonstrated NI’s inability to be a ‘fit-and-proper’ owner of BSkyB, Murdoch needed to show media regulator Ofcom that he can keep a tight rein over the company, and is prepared to make sacrifices. Although, even without that sacrifice, it looks like the BSkyB deal is becoming less and less likely: as Telegraph City editor Richard Fletcher tweeted earlier, ‘With BSkyB shares now down 5% - at 770p – market appears to think there is less than a 30% chance of Murdoch pulling off this deal’. Ouch.

What makes the whole sordid process all the more surprising is Murdoch’s admission in his statement to employees that he and his father had lost control of the NotW newsroom for many years, adding his regret that it had taken so long for NI to realise the extent to which the phone hacking had been taking place. ‘I now know I did not have a complete picture… this was wrong and is a matter of serious regret’.

Murdoch added that NI has moved quickly to try to identify any further wrongdoing, setting up a management and standards committee and a compensation scheme for phone hacking victims. Whether this will successfully demonstrate to Ofcom that NI is prepared to take responsibility for everything that goes on within its walls is yet to be seen. The one thing we can say for sure is that, at the cost of 200-odd jobs, it’s certainly been expensive.

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