Thu, Jul 14, 2011 - Page 1 News List

Under-fire News Corp withdraws BSkyB bid

AFP and Reuters, LONDON

Rupert Murdoch’s News Corp has withdrawn its bid for British satellite broadcaster BSkyB in the wake of the growing scandal over newspaper phone-hacking, the company announced yesterday.

The announcement came shortly before the British parliament was to debate a government-backed motion calling on Murdoch to halt his attempt to acquire the 61 percent of BSkyB his company does not already own.

“We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate,” said Chase Carey, deputy chairman, president and chief operating officer of News Corp in a statement.

Earlier, summoning a degree of national unity rarely seen outside times of war, parliament was set to tell Murdoch to drop an expansion plan for his media empire, while police probe possible crimes by his journalists.

In a watershed moment for British politics, a barrier of fear of the Murdoch press that affected all parties has collapsed under the weight of public outrage.

Setting the tone, Cameron told a stormy weekly questions session that Murdoch should drop the bid.

“What has happened at the company is disgraceful, it’s got to be addressed at every level and they should stop thinking about mergers when they’ve got to sort out the mess they’ve created,” he said.

Cameron faced questions about why he hired as his spokesman a former editor who has been arrested on suspicion of involvement in hacking voice mails and bribing police. Cameron has repeatedly said he had believed assurances of innocence, but warned his former aide, if he is found to have lied, that he “should, like others, face the full force of the law.”

While some analysts said it was too early to declare that the business was in serious retreat in Britain, many said that the sweeping political influence Murdoch had enjoyed has been curtailed.

“This is a vote of seismic significance,” said politics professor Jonathan Tonge of Liverpool University. “It could spell the beginning of the end for the Murdoch empire. For decades now, successive prime ministers have cozied up to Murdoch. Now it’s a new era. Political leaders will be falling over themselves to avoid close contact with media conglomerates. This is a turning of the tide — it’s parliament versus Murdoch at the moment.”

Others were more cautious.

“In the medium to longer term, the natural order will reassert itself,” said Steven Fielding, politics professor at Nottingham University. “People will forget what the News of the World did ... and that people’s desire for tittle tattle, regardless of how it is found, will remain.”

The fallout from the scandal also threatens to spread to the US, where Murdoch owns the Wall Street Journal, the New York Post and Fox television. John Rockefeller, chairman of Senate’s Commerce Committee, called for an investigation to determine if News Corp had broken any US laws.

Rockefeller said he was concerned by allegations that the hacking “may have extended to 9/11 victims or other Americans,” in which case he said “the consequences will be severe.”

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