Bad Times at The Times: James Harding Steps Down

James Harding, the golden boy of British journalism, steps down—with a hefty push from Murdoch. By Peter Jukes.

Hours after company reports that Rebekah Brooks, the disgraced former CEO of News International, had benefitted from a severance package worth around $20 million, the highly respected editor of The Times, James Harding, announced he was leaving under pressure from Rupert Murdoch.

“It has been made clear to me that News Corporation would like to appoint a new editor of The Times,” Harding told staff on Wednesday, using a form of the passive tense which most his sub-editors would immediate strike out as evasive. According to Andrew Neil, a former Sunday Times editor with strong connections with News Corp., Murdoch had been trying to get rid of Harding for a year ever since the hacking scandal engulfed his U.K. publishing subsidiary.

In what insiders are construing as a defiant gesture towards the paper’s proprietor, The Times carried a front page story and a double page spread inside covering its editor’s departure. Harding, who has been editor for five years, steered the paper during the critical last eighteen months as the phone-hacking scandal closed the News of the World, and allegations of corrupt payments to public officials led to arrest of senior editors and journalists at the Sun.

Like most of Fleet Street, with the exception of the Guardian, The Times was slow to catch on to the significance of the phone hacking allegations around its sister Sunday tabloid. But since hundreds of new victims came to light in July 2011, The Times has been highly critical of the management of its parent company, News International, leading many observers to conclude Harding has paid a price for his independent stance. Murdoch’s alleged displeasure with his editor was first reported by the Daily Telegraph ten days ago when the CEO who replaced Rebekah Brooks, Tom Mockridge, also resigned from News International.

However, the abrupt departure may also have to do with the parlous economics of Times Newspapers, which is reported to lose almost $100 million a year. Early reports suggested that Harding would immediately be replaced by the current editor of the Sunday Times, John Witherow, leading to a streamlining of the two papers into a seven day operation. This was the net result of the closure of the News of the World, which was replaced within months by the Sun on Sunday.

However, unlike the Sun and News of the World, News Corp. is constrained by a legal agreement entered into with British government when Murdoch acquired Times Newspaper Group in 1981. Six independent directors are legally obliged to "to preserve the separate identities of the Times and the Sunday Times." The directors are also supposed to approve by majority voting the dismissal or appointment of a new editor.

The Daily Beast contacted the independent directors to discover whether Harding’s resignation had been agreed by them, but at the time of publication has received no reply. A spokesperson for News International confirmed a Times Newspaper group board meeting did take place Wednesday afternoon to discuss Harding's departure. Reports on Thursday suggested that News Corp. had made informal approaches to the ministry of culture media and sport in order to change the terms of its agreement.

In printer’s rules, The Times is the only newspaper to be spelt with an obligatory capitalised ‘The’ because, in the 19th Century, it became the world’s first great independent newspaper—sustained by circulation and advertising, rather than the largesse of a politically motivated proprietor. Once called “the Thunderer” because of the potency of its political commentary, Abraham Lincoln described the papers as “more powerful than the Mississippi.” However, The Times has been a loss making venture for most of the last 50 years.

The Sunday Times and The Times were entirely separate newspapers until united in the same newspaper group in 1966—a move which had to be approved by government competition authorities even though it only represented 6 percent of the British newspaper market.

When Rupert Murdoch made a bid for Times Newspapers in 1981, the takeover escaped referral even though Murdoch already owned the Sun and the News of the World, and the merger gave him 40 percent of Britain’s national newspaper readership. During the Leveson Inquiry into press ethics the Thatcher archive revealed a hitherto secret meeting between Murdoch and the British Prime Minister Margaret Thatcher to discuss the takeover of the Times group.

While Harding’s severance package is reported to be around $2 million, this is ten times less than that revealed on Wednesday to have been paid to Rebekah Brooks, who faces trial next year on multiple charges of phone hacking, bribing public officials, and conspiracy to pervert the course of justice.

Financial reports from the holding company for the Sun and News of the World revealed the group had lost $300 million in the year to July 2012, compared to a $120 million profit the previous year. Most of these losses are due to the closing down of the News of the World and the legal costs around the hacking scandal.

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Hidden in the report was the news that Brooks, a former editor of both the News of the World and the Sun, ++received a complete severance package worth £10.8 million++ [] when her legal fees are taken into account. This is almost a third of the entire redundancy costs of the hundred or more staff sacked when News of the World closed. And this is five times the amount paid to the family of Milly Dowler and their nominated charity when Murdoch tried to make amends for the hacking of the murdered teenager’s phone.