I Quit

07.21.12

Rupert Murdoch’s Stunning Exit: A ‘Saigon Moment’

The tycoon resigned his top posts at a handful of British newspapers. Peter Jukes on why it’s the end of an era for the U.K.—and how the move could insulate his U.S. holdings from scandal.

In a move that could bring to an end Rupert Murdoch’s 30-year dominance of the British press, the 81-year-old media mogul has resigned as director of The Sun, The Times, and The Sunday Times, and stepped down from the board of the News International Group, Times Newspaper Holdings, and News Corp. investments in the U.K.

The move was greeted by incredulity among most of Fleet Street and even some of Murdoch’s staunchest opponents. Though there had been a sense that ever since the resignation of his son James Murdoch from the chairmanship of the nation’s largest pay-TV operator, BSkyB, that the Murdochs were in slow retreat, the launch in February of a Sun on Sunday to replace the now shuttered News of the World had given many journalists reason to believe that Murdoch would not divest from the U.K.

However, that sentiment began to shift with the recent announcement of an impending split of the troubled News Corp. publishing interests from the lucrative entertainment, sports, and satellite business. Murdoch told interviewers earlier this month that he was happy now to invest in the U.S. rather than the U.K., and was planning to build a “digital hub” around The Wall Street Journal instead.

Previously, such a converged media, TV, and newspaper project had formed the basis for James Murdoch’s bid for succession. Project Rubicon—James’s strategic plan to relocate and converge the British newspaper titles with the BSkyB franchise as part of a $16 billion takeover—was abandoned nearly a year ago in the wake of the hacking scandal.

Mark Lewis, the campaigning lawyer who through years of protracted civil suits finally brought phone hacking to public attention, told The Daily Beast: “Although surprising, it was inevitable that the board of News Corp. would call a halt to the family control of the print media in the U.K. when that was harming the running of an international company ... It was time for a change,” Lewis said. “People are left having to clear up the mess made on his watch.”

Murdoch himself has yet to issue any public statement, though his Twitter account has been active with unrelated political conversation. An email sent to his British staff today maintains Murdoch "remains fully committed to our business as chairman."

There have been 70 arrests since the hacking scandal broke in July last year. Scotland Yard’s phone-hacking investigation, Operation Weeting, focused mainly on Murdoch’s bestselling Sunday tabloid News of the World, has nearly finished, and files are being handed over to prosecutors. A separate inquiry into corruption of public officials, which has resulted in more than a dozen arrests at the daily Sun, is only about halfway through. Meanwhile, the computer-hacking investigation, Operation Tuleta, is only really just underway. Well-placed sources in Westminster suggest the upmarket Sunday Times is a particular focus when it comes to email hacking, with the security services in Northern Ireland taking a particular interest.

“It has to be said, as he admitted himself, Murdoch was ultimately responsible for what his newspapers did.”

The high-profile Leveson Inquiry, a judge-led probe into the ethics of the British press that was set up last year in response to the hacking scandal, retires this summer to make some preliminary findings. However, this will bring no relief to Murdoch’s interests in the U.K., as it simply paves the way for criminal prosecution, with Murdoch’s former CEO of News International, Rebekah Brooks, set to face trial for three counts of perverting the course of justice in September. Meanwhile, her former deputy and successor at News of the World, Andy Coulson, has been charged with perjury in Scotland. He went on to be the chief press spokesman for Prime Minister David Cameron before he resigned last year.

In the eyes of Tom Watson, the Labour MP who sat on the Department of Culture, Media and Sport committee, which in May concluded Murdoch was “not a fit person” to run an international company, the resignation is driven by the New York headquarters. “This is clearly corporate lawyers in New York trying to insulate themselves from more revelations in the U.K.,” he told The Daily Beast. “There are more waves of misery to come,” Watson said. “But the few remaining executives in the U.K. will be feeling abandoned.”

Brian Cathcart, the former journalist and professor who helped to found the Hacked Off campaign two weeks before the hacking scandal erupted last summer, urges more caution. “Until something actually happens, it’s hard to know what’s going on in Murdoch’s head,” he told The Daily Beast, “He’s always been something of a business Houdini.” But Cathcart also thought this was a salutary day for Fleet Street and the British Press. “From the point of view of people who work in newspapers in London, Murdoch has been very good to them,” Cathcart said. “He effectively created The Sun and saved The Times. He has a long history of investing in journalism here.”

 “It has to be said,” Cathcart added, “as he admitted himself, Murdoch was ultimately responsible for what his newspapers did.”

After a year of scandals and arrests, it finally looks as if Murdoch is abandoning Fleet Street, which back in the 1980s provided the revenues to launch his Fox Network in the U.S. If so, it is almost a Saigon Embassy moment for the British press, with the Murdoch helicopters on the roof, and the end of an era looming.