Amid scandal, Murdoch kills off News of the World

A security officer stands at the gates outside the publisher of News of the World, News International's headquarters in London, Thursday, July 7, 2011.  Sunday newspaper News of the World is accused of hacking into the mobile phones of crime victims, celebrities and politicians, prompting News International to announce Thursday that the papers is to cease publication after publication upcoming Sunday.
Sang Tan | AP
A security officer stands at the gates outside the publisher of News of the World, News International's headquarters in London, Thursday, July 7, 2011. Sunday newspaper News of the World is accused of hacking into the mobile phones of crime victims, celebrities and politicians, prompting News International to announce Thursday that the papers is to cease publication after publication upcoming Sunday.
Posted July 07, 2011, at 6:35 p.m.
Last modified July 07, 2011, at 7:47 p.m.

LONDON — The Murdoch media empire unexpectedly jettisoned the News of the World Thursday after a public backlash over the illegal guerrilla tactics it used to expose the rich, the famous and the royal and remain Britain’s best-selling Sunday newspaper.

The abrupt decision stunned the paper’s staff of 200, shocked the world’s most competitive news town and ignited speculation that Rupert Murdoch’s News Corp. plans to rebrand the tabloid under a new name in a bid to prevent a phone-hacking scandal from wrecking its bid for a far more lucrative television deal.

“This Sunday will be the last issue of the News of the World,” James Murdoch, son of the media magnate, announced in a memo to staff.

Mushrooming allegations of immoral and criminal behavior at the paper — including bribing police officers for information, hacking into the voice mail of murdered schoolgirls’ families and targeting the phones of the relatives of soldiers killed in Afghanistan and the victims of the London transit attacks — cast a dark cloud over News Corp.’s multibillion-dollar plan to take full ownership of British Sky Broadcasting, an operation far more valuable than all of Murdoch’s British newspapers.

Faced with growing public outrage, political condemnation and fleeing advertisers, Murdoch stopped the presses on the 168-year-old newspaper, whose lurid scoops have ranged from Sarah Ferguson’s claims she could provide access to ex-husband Prince Andrew to motor racing chief Max Mosley’s penchant for sadomasochism.

James Murdoch said all revenue from the final issue, which will carry no ads, would go to “good causes.” The paper has been hemorrhaging advertisers since the phone hacking scandal escalated this week, with companies including automakers Ford and Vauxhall, grocery chain J. Sainsbury and pharmacy chain Boots pulling ads from the paper.

Police say they are examining 4,000 names of people who may have been targeted by the tabloid, which sells about 2.7 million copies a week.

The paper has acknowledged hacking into the messages of politicians, celebrities and royal aides, but maintained for years the transgressions were confined to a few rogue staff. A reporter and a private investigator working for the paper were jailed for hacking in 2007.

But in recent days the allegations have expanded to take in the phone messages of 13-year-old Milly Dowler, who disappeared in 2002 and was later found murdered, as well as the families of two other missing schoolgirls.

James Murdoch said if the allegations were true, “it was inhuman and has no place in our company.”

“Wrongdoers turned a good newsroom bad,” he said, “and this was not fully understood or adequately pursued.”

“While we may never be able to make up for distress that has been caused, the right thing to do is for every penny of the circulation revenue we receive this weekend to go to organizations — many of whom are long-term friends and partners — that improve life in Britain and are devoted to treating others with dignity,” he said.

The announcement sent shock waves across the British media establishment, and among News of the World staff. Features editor Jules Stenson said the news was met with gasps and some tears.

“No one had any inkling,” he told reporters outside the company’s London headquarters. “There was no lynch mob mentality, there was just a very shocked acceptance of the decision.”

Some suspected shutting the paper was a ploy to salvage Murdoch’s British media empire as well as the job of Rebekah Brooks, the trusted chief executive of his British news operation.

“News Corp. has taken a bold decision to stop printing the News of the World and close the title. Mr. Murdoch was clearly not willing to jeopardize his bid for BSkyB,” said markets analyst Louise Cooper of BGC Partners in London. “Murdoch has shown what a brilliant operator he really is.”

Graham Foulkes, whose 22-year-old son David was one of the 52 people killed in the 2005 London transit bombings — and who suspects his phone may have been hacked — said the paper’s closure was “a cynical decision” by Murdoch.

“The only language [Rupert] Murdoch speaks is the dollar and this must have hit him hard,” Foulkes said.

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