Video: Murdoch’s News Corp. drops BskyB bid

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    >>> so does the anger surrounding the media empire of rupert murdock . the phone hacking scandal has already taken a big prize away from him. his company news corporation badly wanted to buy the big satellite network bskyb. today they dropped their bid. there's no telling where this ends, but this is all new territory for this huge media figure and for great britain. nbc's stephanie gosk is in london for us tonight. stephanie , good evening.

    >> reporter: news corps got beat up all day today both before and after they dropped out of the bid. one of their fiercest critics, former prime minister gordon brown who accused murdock 's papers of law breaking on what he calls an industrial scale.

    >> order! order!

    >> reporter: in parliament today politicians for once found something they could agree on. rupert murdock 's news corporation, they said should drop their bid for news network bskybuy.

    >> they've got to stop talking about mergers until they sort out the mess they created.

    >> reporter: but even before they voted, news corps beat them to it.

    >> they have decided in the last few moments they would withdraw.

    >> reporter: states they would walk away from a deal potentially worth billions. in a statement, the company said it has become clear that it is too difficult to progress in this climate. the climate turned hostile just ten days ago after news of a 14-year-old's cell phone had been hacked by news corps's reporters. news corp shut that paper down perhaps hoping to save the bskyb deal. but it didn't work.

    >> rupert murdock has rarely been thwarted in his ambitions. for the most part he has umt matd ultimately achieved what he has wanted to.

    >> reporter: and he has achieved a lot. starting with a single newspaper inherited from his father, rupert murdock has amassed some of the world's best known, most watched brands. movie studios , television networks , cable companies , internet properties, magazine and book publishing , all part of the murdock empire. if you're watching " american idol ," "the simpsons" or "glee" you're watching news corps. "the wall street journal ," the "new york post," fox news and 20th century fox movie blockbusters like avatar or x-men. and it's all made a fortune for murdock and given him enormous business and political clout. now really for the first time, that power is in jeopardy. tonight there's signs that murdock 's troubles could spill out of the uk and across the atlantic. there are three u.s. senators and one congressman calling for separate, u.s.-led investigations of news corp. brian?

    >> stephanie gosk in london tonight . staff and news service reports
updated 7/13/2011 7:05:39 PM ET 2011-07-13T23:05:39

British Prime Minister David Cameron on Wednesday pledged that his government would look into whether American 9/11 victims were targeted by News Corp. journalists in the phone-hacking scandal.

"I am confident the Metropolitan Police will get to the bottom of this," Cameron told fellow lawmakers.

Image: Prime Minister David Cameron
Prime Minister David Cameron speaking during Prime Minister's questions in the House of Commons, London, Britain, on Wednesday.
Reacting to public anger over the crisis, Cameron has ordered a police investigation and a public inquiry.

Under scrutiny are British press practices, and some observers say this could shed light on dubious procedures at other media outlets.

Police have been criticized for failing to follow up inquiries into phone hacking by the News of the World after the paper's royal correspondent was jailed in 2007 for conspiring to listen in to the voicemails of court officials.

Cameron's comments followed calls for an investigation of media baron Rupert Murdoch's News Corp. by a U.S. senator, signaling the crisis could spread to the United States.

Story: Legal head of Murdoch’s News International leaves company

Senator John Rockefeller, chairman of the committee on commerce, science and transportation, said phone hacking at the News of the World raised "serious questions" about whether the newspaper's parent company had broken any U.S. laws.

"I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans," he said in a statement Tuesday. "If they did, the consequences will be severe."

Money offered to NYPD officer?
Britain's Daily Mirror newspaper, citing an unidentified source, claimed Monday that News of the World journalists had offered to pay a New York police officer to retrieve the private phone records of victims of the September 11, 2001, attacks.

The newspaper said journalists had wanted the phone numbers of the dead as well as details of the calls they had made and received in the days leading to the attacks.

Powerwall: Who else was hacked by U.K. tabloids?

The police officer, who now works as a private investigator, said at the time that he would turn down the request because of "how bad it would look," the source was quoted as saying.

Prime minister Cameron also said on Wednesday that his former communications chief Andy Coulson should be prosecuted if he lied in the newspaper phone hacking scandal.

He told lawmakers that a "firestorm" was engulfing parts of the media and British police, and those who had committed offenses must be prosecuted. He said the media also needs to be more transparent.

On Wednesday, News International, News Corp.'s British arm, said its legal manager, Tom Crone, had left the company amid the growing scandal.

Video: Hugh Grant: I was phone-hacking victim (on this page)

Spokeswoman Daisy Dunlop declined to say Wednesday if Crone had resigned or had been asked to leave.

So far, the scandal has largely been contained to the British business of Murdoch's News Corp.

But the company is based in New York, and owns a clutch of prominent media properties in the United States, including the Wall Street Journal, New York Post, and Fox Broadcasting.

In London, Murdoch and two top lieutenants have been summoned to parliament to answer questions next week as popular anger has spread over allegations that reporters spied on thousands of people, from the rich and powerful to vulnerable victims of crime. As a U.S. citizen, Murdoch need not attend.

News Corp. drops bid for TV channel
On Wednesday, News Corp. announced that it has withdrawn its bid for British Sky Broadcasting PLC.

The British parliament was due to pass a non-binding vote on Wednesday afternoon to tell Murdoch to drop his plan to make the $12 billion bid after UK arm News International was enveloped in the scandal.

The decision by the two ruling coalition parties to support the vote — a level of unity generally only shown at times of conflict — broke what had been strong ties between Murdoch and successive British governments and shows the dramatic fall from grace endured by one of the world's most powerful men.

Earlier this week, News Corp. withdrew a promise to spin off Sky News, which had been a condition for buying the 61 percent of the satellite broadcaster that it doesn't already own.

Shares slump
Murdoch, his son James and Rebekah Brooks, the former News of the World editor who is now chief executive at News International — News Corp's British newspaper arm — have been summoned to answer questions by a legislative parliamentary committee next week.

News International has said it is cooperating with inquiries relaunched by police in January. It did not comment on Cameron's decision to vote for the Labour motion on Wednesday.

Story: Hollywood is silently gloating over News Corp. scandal

Others suggested the heavy political fallout meant that even a favorable outcome of that review would not necessarily clear the way for the takeover, just weeks after Murdoch had seemed close to securing final approval.

Labour has sought to capitalize on Cameron's friendship with Brooks, 43, and his hiring of her successor as News of the World editor to be his spokesman just months after a journalist at the paper was jailed for phone hacking in 2007.

Advisor Coulson quit as spokesman in January and was arrested on Friday on suspicion of conspiring to intercept communications and to corrupt officials.

"This is an unprecedented crisis because it has involved the media, the politicians and the police, three of the most powerful groups in society," Ivor Gaber, professor of political journalism at City University London, told Reuters.

Video: Hacking scandal spreads to more papers (on this page)

In Australia, Murdoch's media company, News Limited, said Wednesday it will conduct a "thorough review" of all editorial expenditures over the past three years to confirm that payments were made for legitimate services.

News Limited owns a string of newspapers and websites. In an open letter to staff, News Limited's Chief Executive John Hartigan said the company's conduct has been above board.

"I have absolutely no reason to suspect any wrongdoing at News Limited," he said in the letter, addressed to "All News Limited staff in Australia."

"We will be conducting a thorough review of all editorial expenditure over the past three years to confirm that payments to contributors and other third parties were for legitimate services," he wrote.

Reuters and The Associated Press contributed to this report.

Timeline: Tabloid stir: Phone-hacking scandal intensifies


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