Murdoch Drops Bid for British Sky Broadcasting (BSkyB)
It’s getting worse for global media and political influence maven Rupert Murdoch. One sign: he has now dropped his long-sought bid to buy British Sky Broadcasting — a bid that in recent days seemed destined for massive roadblocks following outrage in Great Britain over the phone hacking scandal:
Rupert Murdoch’s media conglomerate — ended its bid to purchase British Sky Broadcasting, following days of intense pressure from the British public and politicians over the growing British phone hacking scandal.
n a regulatory filing with the London Stock Exchange, News Corp. (NWSA, Fortune 500) said that while “the proposed acquisition of BSkyB by News Corporation would benefit both companies … it has become clear that it is too difficult to progress in this climate.”
The company said it plans to remain a long-term shareholder in BSkyB. News Corp. currently owns a 39.1% stake in the satellite TV provider.
News Corp. has been at the center of a media and political storm for more than a week following reports that the company’s News of The World tabloid allegedly hacked into British citizens’ voicemails, including a 13-year-old murder victim and the families of dead British soldiers, to obtain exclusive stories.
News Corp. shut down News of The World on Sunday, ending the 168-year run of the newspaper.
Meanwhile, Prime Minister David Cameron is about to announce a fullscale inquiry:
David Cameron will announce on Wednesday that a judge will oversee a full-blown inquiry into the background to phone hacking and a panel that will examine media regulation, as Downing Street scrambles to regain the initiative after a series of decisive interventions by Ed Miliband.
In a statement to MPs, shortly before all parties unite behind a Labour motion calling on Rupert Murdoch to abandon his bid to take full control of BSkyB, the prime minister will announce that he reached broad agreement on Tuesdaynight with Miliband and Nick Clegg over the scope of the judge’s work.
The judge, who will be named on Wednesday, will lead the main inquiry into the background to phone hacking, which is expected to be modelled on the Hutton inquiry into the death of Dr David Kelly in 2003. It will be established under the 2005 Inquiries Act, which means that witnesses may be compelled to appear and will give evidence under oath.
This inquiry will not sit in public until the criminal investigation has been completed. It is understood that the inquiry will go further than looking into allegations of phone hacking at the News of the World, as it is also expected to examine relationships between police and press and politicians and press. This raises the prospect that Tony Blair and Gordon Brown could be called to give evidence about their relationship with media barons.
The judge leading the inquiry will also oversee a separate panel, which will examine media ethics and future regulation of the media. This will start its work soon.
Cameron also met Sir Paul Stephenson, the commissioner of the Metropolitan police, last night. It is understood the prime minister expressed deep concerns about the original police investigation into phone hacking.
If News Corp. abuses start surfacing in the United States then it will be sign that Murdoch’s empire in in serious danger. Right now it appears that its ascent has been halted. Be sure to read THIS COLUMN for some background about Murduch and his impact.
Murdoch has created one thing: unusual unity in the British Parliament: