News International, the UK outpost of Rupert Murdoch’s News Corporation, might be preparing to sell off or isolate its scandal-struck newspaper titles, according to a report from rival newspaper The Daily Telegraph. The Telegraph broke the story for its Saturday morning edition, drawing a line between the speculation and the ongoing woes the Murdoch company is suffering as the result of the phone hacking scandal.
This story was immediately and robustly denied by News Corp., whose representatives said that it “remains committed” to the News International titles. The potential sale, then, is either a dead end or another plot line in the complex and long-running hacking scandal that is engulfing Rupert Murdoch’s UK businesses, creating a story which is long on drama and possibility.
The Telegraph’s report says that The Times of London, The Sunday Times, and The Sun are subject to a to a nascent plan in which “News Corp. is understood to be serious about ridding itself of assets it sees as fatally contaminated by the phone hacking scandal.”
The three potential options outlined are outright sale, being put into a “trust” with 10 years of funding provided by News Corp., or a joint venture with, perhaps, German publishing company Axel Springer. It is too early to say if anybody else would want to buy the News International titles, but the prestige attached to the Times, and the money attached to both the Sun and Sunday Times are likely to draw a crowd of oligarchs, publishers, and one or two rich idealists with a plan for saving print.
The details are more specific than the general speculation about a sale, which has been widespread since News Corp. chief operating officer Chase Carey suggested in February that shareholders were very aware of the damage the UK hacking scandal could have on the overall value of the company.
Though the hacking story continues to dominate headlines and debate in the UK, it hasn’t dented the profitability or the share price of News Corporation in the US. The corrosion is far more subtle from a stateside perspective, revolving around the implication of Murdoch family members—particularly the youngest son, James, now based here—and the issues family involvement raises about News Corp. succession.
Chopping off the limb of the News International papers and cauterizing the wound seems the most commercially sensible way forward for the company. Without this drastic step, News International will not be able to re-engage its thwarted efforts to buy back shares in the highly profitable BSkyB. But even for the profoundly unsentimental Rupert Murdoch, cutting the heart out of the business which launched his global ambitions is significant. It is however clear that the hacking scandal remains a rising tide of effluent lapping at the Thamesside company’s doors.
Pass the parcel
In the UK, there is a popular children’s party game where a heavily wrapped package is passed around a circle of children until the music stops, at which point the person holding the parcel unwraps a layer and receives a small prize. Excitement builds as the parcel gets smaller and the ring of children get closer to seeing what is contained in the center. It is suspenseful for the six year olds and interminable for onlookers. The hacking investigations in the UK are similar, except that each layer of obfuscation is peeled back to divulge rather nasty surprises. This week the music stopped with former News International chief executive and tabloid editor Rebekah Brooks.
On Wednesday, Brooks became the first member of the News International management to be charged with criminal activity. Three separate charges of conspiring to pervert the course of justice, following the concealment of “material, documents, and computers.” Brooks’s husband, racehorse trainer Charlie Brooks, and four other individuals were charged with similar offences. If proven, such offences carry prison terms. It had already been a tiring week for Brooks, whose testimony to the Leveson Inquiry a week ago was demurely polished. However, her unconvincing naivety did not manage to conceal evidence which contained both the incredible and the all-too-believable.