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Scepticism over shutdown of NOTW

There are already indications that The News of the World may be reconstituted in some form.

Written by Agencies | New York |
July 9, 2011 1:04:03 am

The News Corporation’s decision to shut down the British tabloid The News of the World on Thursday did little to silence the growing uproar over revelations that the newspaper had hacked into the voice mails of private citizens. In fact,it may have only fuelled the outrage.

An outpouring of suspicion and condemnation came from all directions late Thursday,and was directed chiefly at the News Corporation’s chairman,Rupert Murdoch,a figure as powerful as he is polarizing.

The British media establishment,Facebook and Twitter users and even Murdoch’s own employees questioned his move. Some said it was a ploy to salvage government approval of the News Corporation’s potentially lucrative controlling stake in the satellite company British Sky Broadcasting,or BSkyB. Others saw it as merely a rebranding.

There are already indications that The News of the World may be reconstituted in some form. People with ties to the company said that the News Corporation had for some time been examining whether to start a Sunday edition for its other British tabloid,The Sun. The demise of The News of the World,which publishes only on Sundays,would seem to create the opportunity for that,these people said,speaking anonymously.

“Their significant share of the newspaper market is a very important part of their power base in this country — it is essential to their force and clout,” said Claire Enders of Enders Analysis,a media research firm. The News Corporation is unlikely to walk away from that much power.

But others questioned whether The News of the World’s success could be replicated so easily. “I think they would be very hard pressed to get the Sunday Sun circulation to that level,” said George Brock,head of journalism at City University in London. A Sunday Sun,he said,“is not likely to be a complete offset.”

Murdoch’s decision to close the 168-year-old weekly British tabloid some feel is an example of what the controlling shareholder of News Corp. does best,seize the news agenda,and when necessary,cut his losses. He’s also got his eye on a much bigger prize.

The bold move to shutter the tabloid,a financial pipsqueak,is the best way to stem the flow of damaging headlines and clear regulatory hurdles that stand in way of News Corp.’s pending multi-billion-dollar acquisition of British Sky Broadcasting,a cash cow that will boost earnings of the media giant. “This is,to me,Murdoch taking back control,’’ said Louise Cooper,a markets analyst at London-based BGC Partners.

Murdoch,80,has a long history of daring business decisions. He was born in Australia,the son of a newspaper magnate,and started his own newspaper empire there. He’s purchased assets,like Wall Street Journal owner Dow Jones & Co.,and created others from scratch,like the Star tabloid and Fox broadcast network.

News of the World’s value as an enterprise is “a drop in the bucket’’ compared to News Corp.’s $46 billion market,said Collins Stewart analyst Thomas Eagan. Closing the paper is a small sacrifice to try to save News Corp.’s $12 billion proposal to takeover BSkyB,which needs government approval. Shutting a newspaper amid an industry-wide decline in print advertising and increasing its stake in a profitable pay TV company will actually improve News Corp.’s profitability.

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