News Corp Moves Quick to Close News of the World Over Hacking Scandal

In a crisis management move to separate itself from scandal, “Tabloid to Close Amid Scandal” by Paul Sonne, Cassell Bryan-Low and Russell Adams of WSJ.com reports News Corp. is shutting down News of the World, a U.K. Sunday tabloid. Recently, the tabloid has been accused of hacking into phone records and voicemails of murder victims.

The paper has always had an aura of controversy for its speculated “use of private detectives to break into the mobile-phone voice mail of celebrities and political leaders”. The recent scandal exposed this week:

“…in 2002, the paper accessed the voice mail of an abducted 13-year-old girl who, it turned out, had been murdered. Other allegations then surfaced of hacking into phones tied to other child-murder victims, as well as the families of war dead and of victims of 2005 terrorist attacks in London”

While the investigation has just started, Chief Operating Officer of News Corp., James Murdoch, announced yesterday the paper would be closed.  The article quoted Murdoch as stating,  “The News of the World is in the business of holding others to account but it failed when it came to itself”. The article states from “a person familiar with the matter” that James Murdoch suggested the closing; as the expected successor to run the company after his father Rupert Murdoch, this move might have been a means to prove his crisis management skills.

News of the World has a circulation of 2.7 million, a staff of 200, and represents News Corp U.K. newspaper division. According to the article, “The paper accounts for significantly less than half of News Corp.’s U.K. publishing operations, which are valued at about $1.3 billion, or 2.8% of News Corp.’s current market cap.” Circulating on Sundays, as U.K.’s controversial media, this Sunday is reported as the last issue.

Closing the 168-year-old paper seems like an exaggerated move unless News Corp is aware of many privacy violations from the company, that the allegations are true, and/or maybe the company is just over trying to defend the tabloid. Closing the paper leaves the company with a to-do list of what to do with a 200 person staff, and how to prepare for government and criminal investigations, and lawsuits. While News Corp. was quick to get rid of the paper, they are, however, standing by Rebekah Brooks, chief executive of News International, the U.K. newspaper unit and former editor of the paper during some of the alleged hacking.

And please note that the source of this post is an article from the Wall Street Journal, which is owned by News Corp.