James Murdoch Resigns at News Corp. News Updates

02.20.12

Rupert Murdoch’s Sun on Sunday Gambit to Save News Corp.’s Image

The embattled News Corp. mogul hits back at his rivals with a new Sunday tabloid—but will it be enough to save his troubled empire?

Rupert Murdoch made some bold and surprising moves when he visited the offices of his embattled Sun tabloid on Friday—pledging his support for the paper, lifting suspensions of journalists arrested in a police investigation into payments to public officials, and announcing that he would plant himself in London for the next several weeks to help weather an increasingly volatile public-relations storm. But it was Murdoch’s announcement that The Sun would soon be launching a Sunday edition—filling the void left by its sister paper, News of the World, which Murdoch shuttered at the height of the phone-hacking scandal this summer—that inspired the most buzz. The move seemed to suggest that the notoriously combative mogul was hunkering down for a serious fight.

Murdoch seems anxious to get into the ring. Last night, he surprised observers once again with the announcement that the new Sun on Sunday will publish its inaugural edition this week. As the cover story of today’s Sunbilled as an “exclusive,” perhaps in a nod to the amount of media-on-media ink spilled of late—proclaims: “Now that momentous new dawn is here. From today your favourite paper will be available seven days a week, making every day a Sun day.”

Even Murdoch antagonists couldn’t hide their excitement at the news. “This gambit smacks of the Rupert of old. It will surely have his rivals gasping, leaving them little time to prepare,” wrote media critic Roy Greenslade in The Guardian, which has been leading the anti-Murdoch charge. “Love him or hate him, you have to admire the chutzpah. What a guy!”

Murdoch seems intent on getting the upper hand in the crisis gripping News International, his U.K. media empire. But as he looks ahead to the launch of his newest high-profile asset, serious questions remain. For one, it is unclear who will wind up steering News International through the ongoing crisis once Murdoch finally makes his way back to the United States. Observers noted the conspicuous absence of Murdoch’s son James, the current head of News International, who has come under fire for his handling of the situation so far. On Murdoch’s Friday visit to The Sun, he was accompanied by James’s older brother, Lachlan—prompting a round of speculation about internal family drama, though the company claimed Lachlan was simply filling in while James attended to business in the States. “I’m prepared to accept the company’s explanation,” says Claire Enders, a London-based media analyst who follows Murdoch closely. However, she added, “what’s interesting is the absence of James Murdoch, rather than the presence of someone else. It’s a very clear sign that there’s more and more distance being placed between James Murdoch and News International.”

Of more immediate concern to many News International journalists is their ability to go about their work under the pressure of a police investigation that is apparently being fueled by the company itself. The current crisis stems from a parallel investigation into phone hacking, in which senior Sun journalists have been arrested on suspicion of paying police and other public officials for information. The arrests came after a team of independent internal investigators, appointed by News International this summer, passed along potentially damning information from company emails and other documents to police, who are planted in the building as well.

The internal investigation has been seen as Murdoch’s bid to get his own house in order, and also help restore the reputation of his damaged British news brand. It may also help alleviate some of the legal trouble in store—such as reported FBI investigations into whether the alleged payments put News Corp., Murdoch’s mother conglomerate headquartered in New York, and its executives in violation of the U.S. Foreign Corrupt Practices Act. Mike Koehler, an FCPA expert at Butler, notes that strident cooperation is looked on favorably by U.S. authorities and can help to alleviate fines.

But News International journalists say the specter of police going through their files has made sources afraid to deal with them. “People I’ve been speaking to for years will just not call me back,” one senior News International journalist told The Daily Beast before Murdoch’s visit last week. “I think we’re all a bit paranoid, and we’re all furious. I have a real sense of journalism in Britain being under attack … We have a committee that’s just handing stuff over, hundreds of millions of emails, and allowing police who are based in our offices to take whatever they like.”

Trevor Kavanagh, the legendary Sun columnist, made waves last week by publishing an article in The Sun’s own pages calling the internal investigation a “witch hunt.” And the Sunday Times, the most respected newspaper in Murdoch’s U.K. stable, worried openly about the threat in an article yesterday called “Right to Report.” The article read: “News Corporation wants to co-operate fully with what is now a huge police investigation after previously being accused of presiding over a cover-up over phone hacking. However, in providing police with evidence, it may expose journalists’ confidential sources and deter whistleblowers … The implications of the present police actions are worrying for those who believe the press has an important role to play in holding the powerful to account.”

Perhaps hinting at the unpopularity of the internal investigation among News International journalists, the article goes on to note that two senior executives at the helm of the committee, Will Lewis and Simon Greenberg, “are said to dine at their desks on organic beetroot juice and quails’ eggs.”

“People I’ve been speaking to for years will just not call me back,” said one senior News International journalist. “I think we’re all a bit paranoid, and we’re all furious.”

It’s not just News International journalists who find the investigation worrisome. Geoffrey Robertson, the U.K.’s foremost media lawyer, told The Daily Beast last week that Murdoch had created an “ethical crisis” at his company. “To just allow these people to be given the names of all the confidential sources that the journalists have cultivated—this is a massive breach of the fundamental tenets of the ethics of journalism.” Britain’s National Union of Journalists has said it’s considering a legal challenge against News Corp. to question the legality of the management’s practices, and points to a prior ruling in the European Court of Human Rights case Goodwin v. UK that affirmed the importance of protection for journalistic sources.

Undeterred, Murdoch has vowed that all evidence would continue to be turned over to police. And the investigation could run deeper still. When asked in 2003 before Parliament whether News of the World or The Sun had paid police for information, Rebekah Brooks—the former editor of both tabloids who went on to become CEO of News International—admitted that “we have paid the police for information in the past.” (Asked whether she would do it again, she replied, “It depends.”) Appearing at the same hearing as Brooks, David Cameron’s former communications chief Andy Coulson—then-editor of News of the World—interrupted to add, “we operate within the [press] code and within the law, and if there is a clear public interest, then we will.”

Meanwhile, the next stage of the Leveson inquiry, the high-profile public investigation into the phone-hacking scandal, will focus exclusively on the relationship between the press and police. It will start next Monday, the day after the much-anticipated release of the new Sun on Sunday