The unexpected resign of Rupert Murdoch from NI Group Ltd, NewsCorp Investments and Times Newspaper Holdings

Rupert_Murdoch

Rupert_Murdoch

After over a year  of the scandal with the Murdoch’s  media empire in United Kingdom, Rupert Murdoch, aged 81, has decided to  resign from a string of directorship controlling  News Corporation’ U.K. newspapers behind The Sun, The Times and The Sunday Times. The resign is considered unexpected as Rupert Murdoch himself repeatedly insisted that would be committed to his U.K. media empire.  Murdoch’s resign has raised speculation of a possible sale of the newspaper group.

The symbolic step?

Murdoch also resigned as a director of Newscorp Investments and Times Newspapers Holdings. Earlier this year James Murdoch, Rupert Murdoch’s son, also stepped down from the boards of News Corp.’s newspaper companies. The resignation also followed the well known scandal involving the U.K. newspaper operations.

Claire Enders, the media analyst, said: “It’s all part of a withdrawal from the U.K.” She added: “It’s a continued disassociation with the Murdochs as a family because, after all, James and Rupert Murdoch are not all that different in the playout of the scandal. They’ve both been heavily implicated in different ways. So this is a response.”

Both of Murdochs, Rupert and James, had appeared before the British Parliament. They were required to give information on the reporters’ and editors’ operations regarding illegal hacking into mobile phones as well as bribing public official for news.

However News Corporation is constantly trying to minimize the significance of Murdochs’ resignations by constantly repeating that resignations are: “nothing more than a corporate housecleaning exercise prior to the company split”.

Yet it is remembered that Rupert Murdoch had frequently informed that he had no plans of stepping down from the U.K. newspaper business. At the same time he insisted to remain a “very active chairman” of the publishing business. All of his former statements and his unexpected resignation have raised the issue of possible cutting his all ties with the company.

Although his resignation from the boards is considered a good step toward the reconstructing the good name of the company, but it is not enough. Probably the decision about dividing News Corp would put some essential distance between its film and television assets and the newspaper business. News Corp’s reputation is here on stake and the biggest threat is the newspaper business.

Although Murdochs’ resignations are seen as attempts to retrieve their media empire, Claire Enders said that Murdochs’ resignations should be regarded as a part of the “slow fade of Rupert and James from the U.K.” that began over one year ago and most likely will be “complete and permanent”. Claire Enders added: “The grip of the Murdochs, finger by finger, has been loosened and it’s not in order to return triumphantly.”

The fear of the unsteady future

To calm down employees at the UK papers, top executives decided to send an e-mail to them. The e-mail confirmed Murdoch’s moves and ensured that he had no plans of cutting his ties with the company. However, according to some sources, the company’s executives had discussed the possible situation of a split and selling of stakes just to fund a leveraged buyout of the film and entertainment division. It has not been confirmed yet whether Rupert Murdoch still plans to do it, but it is clear that if he does, it will allow him not only to distance himself from the shareholders but also appoint James Murdoch as his successor.

Jay Raol

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