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Rupert watch - Apocalypse when?

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Rupert Murdoch is in big trouble.  It is not a perfect storm but we're getting there.

British attorney Mark Lewis is in New York to take legal action in behalf of clients who may have had their phones hacked in the United States.

More significantly, News Corp withdrew its bid to buy the remaining 61% of BSkyB, the highly profitable British cable TV franchise (1.1 billion pounds 2011, News Corp owns 39% now). (Murdoch images: left, right)

Last week, James Murdoch stepped down as chairman of BSkyB after surviving a challenge to his position just weeks ago.

BBC reports:

"The News of the World had thousands of people they hacked. Some of them were in America at the time, either traveling or resident there," he said. [Mark Lewis, British attorney representing phone hacking victims in claims in the U.S.]

News Corporation also withdrew its bid to buy the remaining 61% stake in satellite broadcaster BSkyB saying it had become "too difficult to progress in this climate".

Mr Lewis told the BBC News Channel that it was significant that legal action over phone hacking had moved outside the United Kingdom for the first time. BBC April 12

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In addition, News Corp subsidiary NDS has credible charges of cable pay TV piracy to deal with.  (Cisco announced its intention purchase NDS last month just as the cable piracy charges were raised.)

BSkyB played a big role in future News Corp profits, net new revenue in a locked in British cable market.  Instead of purchasing the remaining 61%, News Corp has its  39%, ownership under review by British authorities to determine if Murdoch is "fit and proper" as an owner of any interest in the company.

The lost opportunity to buy the remaining 61% of BSkyB and risk to the current 39% will, no doubt, fuel the shareholder suit claiming that Murdoch harms News Corp income because of his skewed judgement, nepotism, and legally challenged activities.  That suit now has real legs with the 6.6 billion pounds ($10.0 bil U.S.) per year company slipping away from News Corp.


  • what happens with BSkyB.  The approval of ownership is a huge issue.  If Murdoch is deemed not "fit and proper" and has to surrender the 39% ownership, he's out period.  That's a huge loss.
  • what happens to once News Corp heir apparent James Murdoch.  He took the heat at the Parliament hearings on phone hacking.  He's out as heir apparent.  He is also out as chairman at BSkyB (James once worked for alleged cable pirate, NDS (in 2002);
  • watch what ITV does with BSkyB and the pay TV piracy charges.  ITV's cable pay TV offering collapsed while trying to compete with BSkyB.  Was this due to alleged Murdoch sponsored hacking and piracy by NDS?  If ITV goes to court, that could produce a flood of damaging information.  This is another scandal that could spell the end of Murdoch.

Finally, watch any action against Murdoch in New York state courts for phone hacking.

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We may be approaching the time for Murdoch to make a deal and flee the scene.


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