The Two-Way
8:20 am
Wed February 29, 2012

James Murdoch Steps Down As Executive Chairman Of News International

Originally published on Wed February 29, 2012 7:34 pm

As the phone hacking scandal that roiled his father's international news company deepened, James Murdoch is stepping down as Executive Chairman of News International.

The AP reports that News Corp., owned by James' father Rupert Murdoch, said he was stepping down "to focus on the company's international TV business."

We'll have more on this story as it develops.

Update at 9:28 p.m. ET. Murdoch's Statement:

The AP says that in a statement, the 39-year-old thanked his colleagues for working "tirelessly to inform the public" and also praised the newly-launched British newspaper The Sun.

"With the successful launch of The Sun on Sunday and new business practices in place across all titles, News International is now in a strong position to build on its successes in the future," Murdoch said in a statement.

For a bit of background: News Corp. has been facing tough times lately because the British government has launched a full-scale investigation into the use of illegal phone hacking at some of the company's British tabloids.

Murdoch's resignation comes just as a British politician made claims that the cover-up of the operation "went as high as chairman and chief executive James Murdoch."

The Sydney Morning Herald reports on what MP Chris Bryant said:

"In a scathing attack, he said: 'There was a major cover-up at News International which stretched right up to the very highest levels of the company, as we know, even up to James Murdoch. And that, in the end, I suspect, will prove to have been the biggest crime.'

"Mr Bryant, a leading anti-hacking campaigner who received a £30,000 payout from News for the hacking of his own phone, also told a private member's debate on media regulation that his 'poor researcher' had counted 486 lies told to Parliament by News International."

For his part, Murdoch has testified that he was unaware of the phone hackings.

Update at 10:11 a.m. ET. James 'Made Lasting Contributions':

The Financial Times obtained this statement from Rupert Murdoch:

"We are all grateful for James' leadership at News International and across Europe and Asia, where he has made lasting contributions to the group's strategy in paid digital content and its efforts to improve and enhance governance programs."

Update at 11:19 a.m. ET. More From NPR's David Folkenflik:

NPR's David Folkenflik will have more on this story for tonight's All Things Considered.

But meanwhile he's providing some analysis through his Twitter feed. Among his observations:

-- "The announcement about the younger Murdoch represents a bitter blow to the presumed corporate heir to News Corp Chairman Rupert Murdoch"

-- "James Murdoch's resignation from News International comes amid expansion of scandal to heart of 2nd UK Murdoch tabloid, the Sun, for bribery"

-- "Worth noting: there had previously been plans for him to release these duties as he ascended at News Corp, where he is 3rd highest exec."

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

AUDIE CORNISH, HOST:

And I'm Audie Cornish.

There's been another shake-up in the world of British tabloids. After months of controversy and investigations over a phone-hacking scandal, media giant News Corp. announced earlier today that James Murdoch, son of Rupert Murdoch, will step down as executive chairman of its British newspaper arm. NPR media correspondent David Folkenflik has been following the story, and he joins us now to talk more about it. Welcome, David.

DAVID FOLKENFLIK, BYLINE: Hey, Audie.

CORNISH: So tell us about this announcement, how did it come down, what are the details?

FOLKENFLIK: There was a pretty brief announcement earlier this morning from News Corp. itself that it was issued with a statement under the name of Rupert Murdoch praising his son James - James Murdoch being the third highest executive at News Corp. but, interestingly for our listeners, also the head of the British newspaper arm, News International. It announced that he would be returning to oversee the outreach in global television for News Corp. and relinquishing his duties in the U.K. as far as the newspaper wing was concerned.

CORNISH: Now, this is such a huge company, and James Murdoch, as you said, was already planning to come to New York. He even bought an apartment.

FOLKENFLIK: That's right.

CORNISH: So why is this noteworthy him walking away from the paper specifically?

FOLKENFLIK: Well, it's noteworthy both for - in the last months of scandal, ever since last summer, enveloping first the News of the World, which James and Rupert Murdoch decided to close there because of the cell phone-voicemail hacking scandal and also more recently the scandal that has enveloped the second exceptionally popular tabloid The Sun. Rupert Murdoch, you may have heard in recent days, returned to the U.K. to announce the launch of The Sun on Sunday.

But, in fact, what's happened is that there have been 10 current and former Sun journalists arrested for suspicion of bribery. That is illegal payments to public officials. And just in the last day or two, the top investigator for Scotland Yard has accused The Sun newsroom of having a culture of illegal payments and of creating a network of paid informants throughout British government agencies - very strong statements from the person investigating the illegality at one of their most treasured titles.

CORNISH: James Murdoch, of course, has been a lightning rod for a lot of these criticisms. So does this really help the Murdochs to have him walk away from the British tabs?

FOLKENFLIK: Well, let's put it this way, it was hurting him to be the public face of the British newspaper arm, not only because of what occurred under his tenure in terms of handling the early waves of the scandal, but also in terms of his own credibility in recent months - questions of his own veracity in front of a number of investigative bodies. So having him there has hurt both the face of News Corp. in Britain and hurt the prospects of James Murdoch himself.

CORNISH: David, in the end, what does this announcement signal for the company and for Rupert Murdoch?

FOLKENFLIK: Well, there are several interpretations one can take, not all of them totally contradictory. This morning after the announcement, shares in News Corp. traded at a higher level than they had been. They jumped up. Now, that was in the face of some good positive economic news for the markets generally. But, you know, investors have always been a little wary of Rupert Murdoch's romance with newspapers. The profits and the future of this company are with television and with entertainment - things James Murdoch likes very much.

Investors have also sort of recognized that there's a discount attached to having the Murdoch family so completely control the destiny of what is, of course, a publicly traded company. There's some question about whether James Murdoch's prospects. In fact, there's great sense that James Murdoch's prospects of succeeding ultimately his father as chairman one day have been badly damaged. At the minimum, it shows that the chief operating officer, Chase Carey, somebody viewed as a grown-up by Wall Street investors, is in charge of the company as he now will be in charge of News International, that British newspaper wing of News Corp.

CORNISH: NPR's David Folkenflik. David, thanks so much for talking with us.

FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.