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MELTDOWN News Corp. Withdraws BSkyB Bid PA / AP Photo

News Corp. Withdraws BSkyB Bid

The News of the World scandal has hit News Corp. where it hurts most: its business model. Rupert Murdoch’s company will withdraw its bid for British Sky Broadcasting today, Sky News reports. That comes on the same day that Prime Minister David Cameron, an erstwhile Murdoch ally, said during a rousing session of Parliament that he backed a proposal from the opposition Labour Party calling on News Corp. to drop the bid. News Corp. already owns nearly 40 percent of BSkyB, a major British broadcaster, and sought to purchase the rest for nearly $12 billion. Despite some worries about media consolidation, the deal seemed destined for approval by U.K. regulators until the phone-hacking scandal raised questions about News Corp.—and put serious political pressure on Murdoch to drop the bid voluntarily. Coming just days after the closure of News of the World, it’s a second major blow for News Corp.

July 13, 2011 9:40 AM