News Corp. to Close 'News of the World' Amid Scandal
Facing enormous pressure from British politicians and media, News Corp. (NASDAQ:NWSA) revealed plans on Thursday to cease publication of the News of the World, the U.K. tabloid at the center of a firestorm over allegations it hacked into mobile phones of murder victims and celebrities.
Calling the allegations "inhuman," James Murdoch, the CEO of News Corp. International, said Sunday will be the last-ever issue of the News of the World, which was founded in 1843.
News Corp. is the parent of a slew of media properties, including FOX Business.
Murdoch said the tabloid, which has been accused of eavesdropping on voicemail for victims of child murders and suicide bombings, has been sullied by behavior that was wrong.
If the recent allegations are true, it was inhuman and has no place in our company, Murdoch said.
Further, News Corp. said it plans to run no advertisements in the final edition of the paper and any revenue generated will be donated to good causes and charities. Advertisers, including Ford (NYSE:F), had been pulling out of the paper amid the scandal.
The News of the World is in the business of holding others to account. But it failed when it came to itself, Murdoch said.
The outrage of the News of the World allegations presented a potential threat to News Corp. receiving approval from U.K. regulators for its takeover of BSkyB.
The decision to shut down the British tabloid comes a day after Rupert Murdoch, the CEO of News Corp., issued a statement saying his company will cooperate with investigators, calling the allegations deplorable and unacceptable.
However, Rupert Murdoch stood by Rebekah Brooks, the leader of the companys British newspaper business. Brooks led News of the World in 2002 when it allegedly eavesdropped on messages left for Milly Dowler, a then-missing 13-year-old girl who was later found murdered.
David Cameron, the British prime minister, had characterized the alleged acts by the paper as disgusting and he promised to order inquiries.
Shares of News Corp., which is also the parent of the New York Post and The Wall Street Journal, were recently up 1.49% to $17.73, leaving them up nearly 20% on the year.