Phone hacking scandal costs Murdoch family $1bn

The News of the World phone hacking scandal isn’t about money is it? It’s about rights and ethics and the Murdoch family’s desire to retain control of News Corporation surely.

Maybe it is but sleuths at the Financial Times have worked out that, so far, the scandal (which erupted as a global story just over a week ago when it emerged that the NoW had hacked into the phone of murdered schoolgirl Milly Dowler) has cost the Murdoch family $1bn.

The Murdochs own about 13 per cent of News Corporation stock (and nearly 40 per cent of the voting rights) which has fallen by 17.4 per cent in the past week, wiping $8.3bn of the value of the company.

And, as if that isn’t bad enough, yesterday hacker group LuizSec (which invaded the websites of the CIA and Sony recently) claimed to have hacked into the Sun’s website with a fake story about Rupert Murdoch’s death in the opening encounter of a planned cyber assault on the Murdochs.

Later today Rupert Murdoch, James Murdoch and Rebekah Brooks (who was arrested on Sunday then bailed) are due to face the irate Parliamentary committee which is investigating the scandal.

The temper of the MPs won’t have been improved by Metropolitan Police assistant commissioner John Yates (the top cop charged with investigating the scandal in 2009) resigning yesterday or by the sudden death yesterday of Sean Hoare, a former NoW reporter who claimed to the New York Times that former editor Andy Coulson knew all about phone hacking.

But an even bigger threat to the Murdoch is News Corporation’s stock going into freefall. The sooner Rupert Murdoch parks James Murdoch somewhere and resigns as CEO in favour of COO Chase Carey the better as far as News Cop investors are concerned.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.