Look to the Sky

UK hacking verdicts could embolden Murdoch

One of Rupert Murdoch's most trusted lieutenants at News Corp has been cleared of conspiracy to hack phones and of bribing public officials. In symbolic terms, Rebekah Brooks' acquittal counts for an awful lot for the media tycoon.

As the boss of Murdoch's UK newspapers, Brooks more than any other protagonist in the saga became the face of the voicemail interception scandal that exploded in 2011. The clearing of her name offsets some of the reputational damage done by the conviction of another former Murdoch editor, Andy Coulson, for conspiracy to hack phones.

A Brooks conviction would have had severe consequences for Murdoch's News Corp, especially on the charge of corrupting public officials. That would have increased the likelihood of enforcement action in the United States under the Foreign Corrupt Practices Act. The jury continues to deliberate on the charge in relation to Coulson.

While Brooks proved she did not know about phone hacking going on at the papers she supervised, she arguably ought to have known. So the verdicts still reflect poorly on News Corp's controls and the passage of critical information to senior management.

Right now, the big commercial question is whether the verdicts remove an obstacle to a fresh bid by Murdoch to buy out the shares in satellite broadcaster BSkyB that Murdoch's Twenty-First Century Fox - now split from News Corp - does not already own. British lawmakers killed the last attempt, amid public uproar at the phone hacking scandal.

Arguably, a fresh approach for BSkyB, while unlikely, now looks a little more possible than it did before the verdicts came through. The business logic of taking full control of the UK television business has not diminished since the scandal broke. The whole affair may still be too politically toxic for such an attempt to take place before the UK general election in May 2015. But it is hard to see a legal impediment to such a move, and the sight of Brooks walking free could embolden Murdoch if the air has cleared later next year.