Monday, September 16, 2019

EX-NEWS CORP EXEC: SCANDAL COULD COST $1.6 BILLION

October 25, 2013 by · Leave a Comment 

If the British newspapers owned by Rupert Murdoch’s News Corp had not had the resources of their parent corporation behind them, they would have been forced to shut down because of the legal costs associated with the telephone hacking and bribery scandal in which they have been embroiled, the former head of News International said during a meeting with journalists working for one of the newspapers, The Sun, last November. A transcript of the secretly recorded meeting held last Nov. 22 and released by the British website ExaroNews.com today (Friday) quotes CEO Tom Mockridge as saying, “If NI wasn’t [sic] a subsidiary to News Corporation, this company would be bankrupt now. There wouldn’t be a Sun, a Times, a Sunday Times. There’s no way this company, as a stand-alone operation, could afford to financially sustain the exposure it’s taken.” Mockridge then went on to estimate that by the time the scandal runs its course, it “is going to cost News Corp minimum of £500 million ($800 million) if not a billion ($1.6 billion). While News Corp split in June into two companies, 21st Century Fox, composed of the company’s entertainment assets, and a new News Corp, composed of its newspaper and publishing holdings, the company said that the legal costs of concluding the hacking and bribery cases brought against itself and its employees will be borne by 21st Century Fox, the richer of the two entities. Meanwhile, the phone-hacking trial of Rebekah Brooks, Mockridge’s predecessor at News International, Andy Coulson, the former editor of the now-defunct News of the World and former spokesman for Prime Minister David Cameron, and five others is due to begin in London on Monday. The outcome could have tsunami-like repercussions in the U.S. If any of Murdoch’s top executives are convicted, 21st Century Fox, under FCC rules, could face the loss of all its broadcast licenses. In the 1980s, the FCC yanked the licenses of stations owned by RKO General after it determined that the parent company had engaged in “anticompetitive and possibly illegal” reciprocal trade practices. The commission noted that while “this misconduct was not directly related to RKO’s broadcasting activities … such non-broadcast misconduct called into question the character qualifications of the licensee and its ability to serve the public interest.”