* James Murdoch resignation unlikely to stop scandal
* Rupert Murdoch to appear at judge-led inquiry this month
* U.S. reaction will be crucial
By Georgina Prodhan and Kate Holton
April 4 James Murdoch's exit from the
chairmanship of BSkyB moves his father Rupert into the
firing line in Britain, just as an inquiry into a phone-hacking
scandal turns its focus on his peculiar influence in the
Rupert Murdoch, News Corp's chief executive, is due
to appear this month before a judge-led inquiry into ethics and
standards in the British press, which will be turning its
attention to newspaper proprietors and politicians.
So far, James has taken most of the heat for a scandal over
phone hacking at the Murdochs' best-selling Sunday tabloid, the
News of the World. Rupert's youngest son ran the family's UK
newspaper publisher News International when the scandal erupted
last year, and has faced hard questions about how much he knew
about illegal activity.
But media experts say the inquiry, which has a broad brief
to examine the British press, is now turning to the fundamental
problem of the sway media barons hold over UK politicians.
"If we are talking about influencing politicians from
Margaret Thatcher onwards, then it is Rupert, not James, who
was, is and will be 'in the frame'," says Ivor Gaber, political
journalism professor at London's City University.
Chris Bryant, an opposition member of parliament who has
received compensation from News Corp after his phone was hacked,
says Murdoch's extensive media ownership in Britain may be to
blame for the liberties the News of the World felt able to take.
The Murdoch newspapers in Britain - the Times, the Sunday
Times, the Sun and the new Sunday Sun which replaced the
shuttered News of the World - make up around 40 percent of the
national newspaper market. News Corp also owns 39 percent of
BSkyB, the country's dominant pay-TV broadcaster.
"It was the News of the World behaving egregiously compared
with all the other newspapers that started this," Bryant says.
Since the phone-hacking scandal blew up last July, Prime
Minister David Cameron, linked to Murdoch's newspaper executives
both socially and through his ex-spokesman, former News of the
World editor Andy Coulson, has taken steps to distance himself.
Cameron bowed to public outrage - and limited the political
damage - by setting up judge Brian Leveson's inquiry into the
press and urging Murdoch to call off News Corp's intended $15
billion takeover of the rest of BSkyB.
The Murdoch press, under fire, became less aggressive for a
while, but in recent weeks has gone on the offensive against
"There's a widespread view that it is revenge, pure and
simple, that Murdoch thinks the British establishment, led by
David Cameron, is out to destroy him, so he is out to
destroy Cameron," says publisher and broadcaster Andrew Neil, a
former editor of the Sunday Times.
When James and Rupert Murdoch appeared in a double bill
before a parliamentary committee last year, audiences were
gripped. Rupert's demeanour was strange from the outset,
blurting out an introductory statement that it was the humblest
day of his life. His wife Wendi made headlines around the world
by launching herself at an activist who threw a foam pie at him.
Rupert's appearance at the Leveson inquiry could match that
spectacle, even if this time no pies or punches are thrown.
"It will be another one of those amazing moments, when you
get a glimpse of the real Rupert. He won't be able to slam the
table and have his wife Wendi sitting behind him," says Roy
Greenslade, media commentator and former Murdoch editor.
"On the other hand, he may not get a pie in the face."
His performance will be watched closely, not just in Britain
but in the United States, where News Corp shareholders concerned
about corporate governance are becoming more vocal. Christian
Brothers Investment Services are the latest to call for an
independent board chairman to replace Murdoch.
Having already endured a lengthy grilling from politicians
last year, the elder Murdoch, 81, will face harder examination
from the formidable Leveson and his team of expert lawyers.
While the parliamentary committee that questioned the two
Murdochs last July was then just getting into its stride, and
perhaps put off by the elder Murdoch's uncharacteristically
subdued manner, the Leveson Inquiry is a far tougher arena. And
this time, Murdoch will be under oath.
The inquiry has succeeded in generating gripping headlines
for months on end. Already, Leveson's lawyers have torn apart
arguments of hard-bitten figures - from Daily Mirror editor
turned U.S. chat show host Piers Morgan to Express Newspapers
owner Richard Desmond - with systematic, forensic questioning.
The timing of the court hearing means that yet again, News
Corp may also fail in its attempt to prevent the phone-hacking
fallout from spreading, the motive for James Murdoch's
resignation from BSkyB on Tuesday.
Even without James in the chairmanship, BSkyB must prove to
Britain's TV regulator Ofcom that it is fit to hold a broadcast
licence. News Corp's corporate culture under the elder Murdoch
is ripe for scrutiny.
"One resignation doesn't stem the poison of media moguls. We
need regulation," says Emma Ruby-Sachs, campaign manager for
global activist organisation Avaaz, which has gathered hundreds
of thousands of signatures for a petition to stop Murdoch from
expanding his media ownership in Britain.