Beyond Sexual Harassment, Lesser Known Scandals Could Cost The Murdochs A $14B Deal
In forcing out its top-rated star, Bill O'Reilly, the Fox News Channel sought to contain the damage inflicted by a spreading sexual harassment scandal less than a year after the network's chairman was ousted in the face of similar accusations.
For Rupert Murdoch and his sons, who together control Fox News as part of a larger media empire, getting rid of O'Reilly is part of an effort to shore up its longstanding drive to regain full control of the European broadcasting giant Sky in a $14.6 billion deal. The broadcaster has a major presence in the U.K., Germany, Italy, Ireland and Austria.
And yet, there is a quieter scandal hiding in plain sight — rife with allegations of computer hacking, accusations of fraud, questions of political interference and payouts totaling more than $900 million — all which centered on a relatively anonymous Murdoch enterprise called News America Marketing.
The episode that kicked off that controversy was a small one, involving a rival company that stuck advertising decals on the floor of supermarket aisles. Yet the case stirred members of Congress to demand investigations and cast an unwelcome glare on the actions of rising Republican star Chris Christie while he was a top prosecutor. The case also appears to have influenced former Fox News Chairman Roger Ailes' decision in fall 2011 to hire a Democratic strategist as an on-air commentator for Fox News.
Earlier this month, the commentator, Julie Roginsky, became the latest female employee to sue Ailes and the network itself for sexual harassment.
In London, the independent British media regulator Ofcom has delayed until June 20 its deadline to determine whether the Murdochs are "fit and proper" owners for Sky. The Murdoch's entertainment and television conglomerate, 21st Century Fox, already owns 39 percent of Sky.
The family's last bid to take over Sky imploded nearly six years ago as outrage built over revelations of widespread bribery and phone hacking by the Murdochs' London tabloids. Over time, that scandal caused a Parliamentary inquiry, the closing of their big Sunday tabloid, more than 100 civil lawsuits and the criminal convictions of several former Murdoch journalists, including an editor-in-chief.
This time, several consumer groups and anti-Murdoch politicians have pushed British regulators in official submissions to take the Fox scandals into account when gauging whether the Murdochs would be "fit and proper" owners of Sky.
News America Marketing is a division of News Corp,
