Thursday, July 7, 2011

The phone hacking case: When is a scandal not really a "scandal"? When it ends up changing nothing.

If a company engages in illegal activities, immoral ones that the public finds repulsive, one might think that the company in question might find itself in a bit of trouble. But over in the U.K., talk that News Corp.'s take over of the British Sky Broadcasting Group, known as BSkyB, might be held up over the ever growing phone hacking scandal have been quickly squashed by the Tory government. News Corp. will add BSkyB to its portfolio, be assured of that.

The Guardian this morning reported that Jeremy Hunt, the British Secretary of State for Culture, Olympics, Media and Sport, has received over 100,000 "submissions", most opposed to the take over of BSkyB. But rest assured, "the secretary of state will not be rushed, he will be fair," a Tory said in the House of Lords today.
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Meanwhile, the number of major advertisers who have now said they would suspend advertising in the News International owned tabloid the News of the World continues to increase. Sainsbury, Proctor & Gamble, O2, Butlins, Virgin Holidays, Halifax, Vauxhall and Mitsubishi are all said by The Guardian to be ending any advertising with the newspaper.

Normally this would be a major blow to a media entity. But all this is not just about ad revenues. After years of building up its ties to the Tories, News Corp. is about to cash in its chips. If News of the World, or News International's CEO Rebekah Brooks has to be sacrificed so that the BSkyB deal can proceed, so be it. In the end, owning a major media distribution channel will be worth far more to News Corp. than one slimy tabloid, or one loyal employee.

With over 10 million subscribers, BSkyB is the largest pay-TV entity in the U.K. It is the prize, and until the scandal grows to the point where the government seriously considers pulling the plug on the deal then it is kind of hard to really call the phone hacking episode really a "scandal". Instead consider it merely "good copy".

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