James Murdoch Is Doomed: Phone Hacking's Continued Fallout
After last week's public parliamentary hearings, it looks like Rupert Murdoch's son and News Corp. executive James Murdoch will have a rough road ahead of him. During last week's hearings, Murdoch claimed he didn't know hacking was a widespread practice at News of the World, when he approved a payment of about $1.1 million in 2008 to settle the first lawsuit brought by a phone hacking victim. It doesn't seem likely that Murdoch wasn't privy to the mass phone hackings, and parliament would like to challenge his testimony. "British police are considering a request from opposition Labour politician Tom Watson to investigate claims the 38-year-old son of News Corp head Rupert Murdoch gave 'mistaken' testimony to a high profile hearing in parliament last week," Reuters Tim Castle reports.
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Not only does Murdoch face further grilling from parliament, but it looks like his support system, on all sides, is caving in.
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The corporate suite no longer supports him. "It now seems to be everyone for themselves," Paul Farrelly, a Labour member of Parliament who has been a prominent critic of News International, told The New York Times's Don Van Natta Jr., Graham Bowley and Jo Becker. "The edifice is cracking; they’re all fighting like rats in a sack." Murdoch's testimonial looked especially shaky when two former News International senior executives, Tom Crone and Colin Myler, indicated they believed Murdoch knew more than he claimed. These aren't two nobodies, they held powerful positions at the company, The Times explains. "If they continue to challenge Mr. Murdoch’s account, it could damage his effort to protect his own reputation and that of the parent company run by his father, Rupert." The Times also reports a third former News International member that plans on cooperating with parliament and an outside attorney, who both have reason to believe that Murdoch knew more than he has claimed.
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His father is also backing away. During the testimony Rupert interrupted his son, not to stand up for him, but to clear himself of blame. "In testimony last Tuesday, he [Rupert] appeared as a supplicant, a faltering one at that, who interrupted his son James in the opening moments of the hearing, not to correct him, but to tell the members of the committee how sorry he was," explains The New York Times's David Carr. The senior Murdoch recognizes his son's position and isn't about to come crashing down with him.
James Murdoch is done. He and his father both know that. His testimony curdled as he emitted it, and within two days a couple of former News Corporation executives publicly challenged it. The hooks are still in him, as Prime Minister David Cameron made clear when he said James still had “questions to answer.” And so he will, gradually sinking further into the mess he has overseen.
Perhaps some might expect a father to flock to his son's side as he crumbled, but not Rupert. "But what his sons and daughters could soon find out is that if Mr. Murdoch is forced to choose between the family and the company he has built, he will choose the News Corporation."
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His role at BskyB could be in danger. The British Sky Broadcasting Group, of which Murdoch is the chairman, will meet this week for the first time since the scandal errupted. They too could pull support for Murdoch, report Dana Cimilluca, Paul Sonne and Russell Adams at the Wall Street Journal. "The meeting is expected to provide the strongest signal yet of whether the BSkyB board will continue to support James Murdoch as the company's chairman." Beyond his role in the scandal, Adams points to other matters that could determine his future at BSkyB. "Now that News Corp. has been forced to shelve its effort to buy the rest of BSkyB, the satellite company is expected to take steps such as returning cash to shareholders that would effectively compensate them for the premium they were expected to get from News Corp. in the buyout deal." News Corp might not be so keen on this deal contines Adams, "A person familiar with the matter said last week that if the interests of News Corp. and other BSkyB shareholders diverge further, that could ultimately also play a role in determining Mr. Murdoch's future with the broadcaster." With the walls caving in on all sides, Murdoch's future at BSkyB of News International doesn't look so good.
