Tables turn on Murdoch as scandal rocks his empire

By MICHAEL LIEDTKE and RYAN NAKASHIMA, AP Business Writers

SAN FRANCISCO (AP) - To his many enemies, Rupert Murdoch is getting his comeuppance.

Murdoch's tabloid newspapers long have reveled in the misdeeds of others with salacious photos and pun-packed headlines. Now, one of the world's most powerful media executives is learning what it's like to be enveloped in his own scandal.

"There is a feeling that Murdoch has been king of the world for too long and it's about time that somebody brought him back to Earth," says Mungo MacCallum, a political journalist and commentator who once worked for a Murdoch-owned newspaper, The Australian.

But no one is calling press conferences to gloat about Murdoch's troubles. Even his bitterest media rivals are keeping quiet.

Liberty Media chief John Malone, who engaged in media-mogul head butting with Murdoch over his stake in Murdoch's News Corp and other issues, did not return a message seeking comment that was left with a spokeswoman.

CNN founder Ted Turner, who once challenged Murdoch to a boxing match in Las Vegas, was unavailable, according to a spokesman.

New York Daily News Publisher Mort Zuckerman, whose newspaper fights every day for front page dominance with the Post for New York's tabloid audience also did not return a message seeking comment.

It's hardly surprising, of course. Despite a scandal that has claimed two of his top executives and led him to close one of his British tabloids, Murdoch still runs News Corp., one of the world's most imposing media empires. There's no percentage in gloating publicly about the scandal if you still have to compete - and perhaps do business - with the 80-year-old Murdoch.

But others aren't as charitable. In recent days, Murdoch has drawn comparisons to a cruel monarch, Richard Nixon, even the devil.

The scandal centers on revelations that journalists at his top-selling British tabloid, News of the World, gathered information through a variety of possibly illegal endeavors that included phone hacking and bribery of police officers.

Last week, he closed the 168-year-old tabloid and withdrew a hard-fought bid for 100 percent ownership of prized satellite TV carrier British Sky Broadcasting. He even met with and apologized to the family of a missing, murdered girl whose phone was hacked by News Corp. journalists.

On Friday, he accepted resignations from two top News Corp. executives, Rebekah Brooks, who ran News International, which controlled News of the World and the company's other British newspapers, and Dow Jones & Co. CEO Les Hinton, who used to run the same unit.

The unfolding saga threatens to expose Murdoch and his company to further scorn and legal troubles. News Corp. stock has shed billions of dollars in value. And criminal investigations are under way in Britain, while the FBI has begun a preliminary inquiry in the U.S., where the company's holdings include the nation's largest newspaper, The Wall Street Journal, the New York Post, the Fox TV network and the 20th Century Fox movie studio.

"There is a feeling that Murdoch has been king of the world for too long and it's about time that somebody brought him back to Earth."

For now, Murdoch's job as News Corp.'s CEO is secure because he controls 40 percent of the company's voting stock through a family trust and the board is stacked with directors that shareholder activists have long criticized as his cronies. He also remains one of the world's richest people, although a fortune pegged at $7.6 billion in March by Forbes magazine has been clipped by a 13 percent decline in News Corp.'s stock during the past two weeks.

But the British lawmakers who have traditionally supported Murdoch rather than risk being pilloried in the pages of his newspapers no longer seem to be in his corner because their fear of retaliation is fading. He will surely face tough questions Tuesday when he appears before a Parliament committee eager to grill him about the phone hacking and bribery allegations.

"All the powerful allies that used to help him, either publicly or behind the scenes, have faded to the sidelines," says Eric Boehlert, a senior fellow at Media Matters, a liberal group that frequently criticizes Fox News for what it says is biased and inaccurate reporting. "He is on his own, and he is in over his head."

Boehlert likens the crisis and widespread antipathy surrounding Murdoch to the unraveling of Richard Nixon's presidency in 1974 as details of the Watergate cover-up were revealed. Like Nixon then, Murdoch is in "free-fall mode. There is nothing he can do to stop this story," Boehlert says.

The lack of control over the situation seemingly bothers the notoriously autocratic Murdoch, who told The Wall Street Journal on Thursday that he was "getting annoyed" with the media's unrelenting coverage of the scandal.

If the scandal widens, newspaper analyst Ken Doctor believes Murdoch eventually will have to step down as CEO, though he could still retain the chairman's title.

Disgraced newspaper publisher Conrad Black, whose former ownership of The Daily Telegraph turned him into a bitter Murdoch rival, thinks his old foe is more like another polarizing historical figure - French emperor Napoleon Bonaparte.

Like Napoleon, Murdoch is a "great bad man," Black wrote in a column Wednesday for the Financial Times. "It is as wrong to dispute his greatness as his badness."

Black, who was convicted of fraud in 2007 and still has some prison time to serve, wrote that it would be "astonishing" if Murdoch's British newspapers didn't commit crimes while "reveling in the climate of immunity that has been the group's modus operandi for decades."

Although he stopped short of calling him a crook, Black lambasted Murdoch as an "an exploiter of the discomfort of others" and "a malicious myth-maker, an assassin of the dignity of others and of respected institutions, all in the guise of anti-elitism."

The criticism exemplifies Britain's widespread antipathy toward Murdoch, says Porter Bibb, a former media executive and now managing partner of advisory firm Mediatech Capital Partners.

"The people who are gloating now are much more in the U.K.," Bibb says. "He's really browbeaten the competition, most specifically the politicians."

Murdoch also is despised by union workers who still remember how he used a new printing plant to foil a printers' strike in the gritty London district of Wapping in 1986 and 1987. Nic Oatridge, who lived in the area, recalls seeing police regularly harass and arrest picketers while making sure delivery trucks got into and out of the printing plant. That fed his suspicions that the police were in Murdoch's pocket.

"I'm pleased he's been exposed," Oatridge, 55, says. "Something we've always believed was going on 25 years ago is finally going to be visible."

In the U.S., much of the ill will toward Murdoch has stemmed from the belief that he uses his media properties, especially the Fox News cable channel, to promote a conservative political agenda.

"There is essentially a partisan reaction against Murdoch and his use of right-wing politics," Doctor, the newspaper analyst, says.

Fox News isn't covering Murdoch's scandal as aggressively as other outlets. From July 4 through July 13, Fox aired 30 segments about the story, according to an analysis by Media Matters. Rival CNN showed 109 segments and MSNBC 71.

When Murdoch bought Dow Jones, parent company of the Wall Street Journal, for $5.7 billion in 2007, there were fears the Journal's quality would deteriorate. But Paul Steiger, who left as the Journal's top editor shortly after the acquisition was completed and started a non-profit journalism service called ProPublica, credits News Corp. for investing in the newspaper to maintain its quality and increase its circulation.

"The hacking scandal in London makes me very sad, for the impact it may have on journalism in general," Steiger wrote in an email to The Associated Press. "But I see no evidence it has affected the Journal."

Even so, some members of the family in control of the company that sold the Journal to Murdoch seized on the scandal to express seller's remorse.

"We did a deal with the devil and it really saddens me," one of the family members, Bill Cox III, wrote in an email excerpt published by ProPublica on July 13.

Hinton, 67, became the first of Murdoch's U.S. executives swept out in the scandal. He resigned Friday from his post as CEO of Dow Jones & Co. and publisher of The Wall Street Journal, ending a 52-year career working for Murdoch.

Hinton was executive chairman of the division that included News of the World during some of the years in which the phone hacking occurred. He had assured British parliament in 2007 and 2009 that the hacking had been limited to a rogue reporter, an assertion that proved to be untrue. Hinton joined The Associated Press' board of directors in April.

In his resignation statement, Hinton said he never knew about the rampant hacking at the British tabloid.

MacCallum, the former reporter for The Australian newspaper, finds it hard to believe News Corp. executives weren't aware of what was going on at News of the World. "In the Murdoch organization, everybody knew what was going on," he says.

Yet he doubts Murdoch himself would condone something as underhanded as phone hacking. "Murdoch's never been a devious back-stabbing operator," MacCallum says. "If he came after you, you knew he was coming after you."

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Nakashima reported from Los Angeles. Associated Press writer Kristen Gelineau in Sydney contributed to this report.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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