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Dummies and puppets representing Prime Minister David Cameron (L) and Culture Secretary Jeremy Hunt (R) are held aloft by Rupert Murdoch at the launch of the campaign group Hacked off near Parliament on July 6, 2011 in London, England. The Prime Minister has promised that there will be a public inquiry into phone hacking carried out by journalists at The News of the World newspaper. (Peter Macdiarmid/Getty Images/Peter Macdiarmid/Getty Images)
Dummies and puppets representing Prime Minister David Cameron (L) and Culture Secretary Jeremy Hunt (R) are held aloft by Rupert Murdoch at the launch of the campaign group Hacked off near Parliament on July 6, 2011 in London, England. The Prime Minister has promised that there will be a public inquiry into phone hacking carried out by journalists at The News of the World newspaper. (Peter Macdiarmid/Getty Images/Peter Macdiarmid/Getty Images)

Phone-hacking scandal likely marks end of media baron's control of British politics Add to ...

For decades, the tabloid newspapers of Britain have determined the political fates of governments left and right and held politicians hostage by threatening to expose their personal lives. It is an awkward and needy relationship, probably the last of its kind in the Western world, that seemed to come crashing to a halt as the House of Commons turned for the first time against the country's most powerful media mogul.

It was as if a generation of political shame and anxiety exploded in a great catharsis of outrage and vengeance, with MP after MP rising on Wednesday to denounce magnate Rupert Murdoch and his control over their destinies. Tory MP Zac Goldsmith said that the Australian media baron "has systematically corrupted the police and in my view has gelded this Parliament, to our shame."

It began as an emergency debate, called by the opposition Labour Party after it was revealed this week that the News of the World, a Sunday tabloid, had repeatedly broken into the mobile phone voicemail accounts of a teenage murder victim to glean material for front-page headlines about her private life, in the process destroying evidence.

The paper's voicemail eavesdropping on the private messages of hundreds of actors, athletes, politicians, members of the Royal Family and crime victims had been the subject of numerous parliamentary probes since 2006. It resulted in the imprisonment of two journalists, but police and editors had repeatedly said that the scope was limited and the practice had ended.

This time it was different. Perhaps because a dead teen was involved. Perhaps because even grislier claims were made, that News of the World had stolen the final voicemail messages of numerous terror-attack victims and dead soldiers, and had paid huge sums to police for their silence, giving some officers jobs on the paper. Or because Prime Minister David Cameron's ties to the paper's executives had become an embarrassment that threatened to tie his government directly to the actions of the tabloids, this turned into a far larger denunciation of the political power of the press. It ended with Mr. Cameron agreeing to hold an official inquiry (but only after a police inquiry has run its course).

It seemed to expose a raw nerve of political dependency. Mr. Cameron's first spokesman, Andy Coulson, had been the paper's editor through much of the phone-hacking period, and he resigned in January as the revelations mounted (it was revealed this week that he had overseen payments to police officers, which are illegal). The head of Mr. Murdoch's British operation, Rebekah Brooks, is a friend of Mr. Cameron's; she was the paper's editor-in-chief when it tapped the voicemail of teen murder victim Milly Dowler.

And Mr. Cameron owed a good part of his political victory last year to his successful courting of Mr. Murdoch, whose right-wing newspapers the Sun, the News of the World and the Times - with a combined circulation of almost 7 million - had used their front pages for the previous 15 years to support the leaders and policies of the centre-left Labour Party. Many analysts believe the Tories gained their electoral edge when Labour prime minister Gordon Brown lost the backing of the "red top" tabloids in 2009.

That was the culmination of a long tradition. After Mr. Murdoch bought the News of the World in 1969, British elections increasingly became races to court his support - usually in exchange for political favours. Margaret Thatcher's staff credited much of her victory to her winning the Australian's support - in exchange for which he was allowed to buy the Times of London and establish a satellite-TV empire.

The tables turned in 1995, when upstart opposition leader Tony Blair flew to Australia to court Mr. Murdoch, successfully winning the permanent support of the Sun and the Times, in exchange for more favours. Insiders felt, by this point, that politics had become a full-time matter of avoiding the wrath of the Murdoch press.

"No big decision could ever be made inside Number 10 [Downing St.]without taking account of the likely reaction of three men - Gordon Brown, [deputy PM]John Prescott and Rupert Murdoch," Lance Price, who was Tony Blair's media guru in those years, recently wrote. "On all the really big decisions, anybody else could safely be ignored"

Mr. Prescott conceded on Wednesday night that the media baron had become a bigger figure than many cabinet ministers. "I think there's been a lot of cozying up by all the political parties to Murdoch," he told BBC's Newsnight. "I used to complain about it all the time."

The News of the World's excesses - which seemingly included listening to the private mobile phone messages of the police officers responsible for investigating the paper, and paying very large cash sums to other police in exchange for access to phones of the famous - are largely non-political, although they did involve phone-hacking acts that exposed the fine details of the sex lives of a dozen cabinet ministers, including Mr. Prescott.

And the effect will surely be political. In the past, the party in power always took great care to avoid angering the Murdoch papers, and the opposition tended to walk gently, too. Now Labour is outraged, and many Tories - including, reluctantly, Mr. Cameron himself - have joined the chorus. Mr. Murdoch's ongoing application to buy up the remaining 60-per-cent share of his SkyTV empire could be jeopardized. His newspapers are likely to face far tighter monitoring and possibly regulation, and the ties between parties and the tabloids cannot but weaken.

Guardian parliamentary sketch writer Simon Hoggart wrote that Mr. Murdoch "has crossed a line and MPs feel, like political prisoners after a tyrant has been condemned to death by a people's tribunal, that they are at last free." That tribunal hasn't happened yet, and nobody knows how many more victims will be found. But there is a real sense that the era of printing-press politics is rolling to an end.

Bad news for News of the World

The business behind the tabloid

The British public's outrage at the current phone-hacking scandal is perhaps matched by its historical appetite for tabloid journalism. News of the World is a (chipped and scratched) jewel in the crown of News Corp.'s British publisher, News International. According to the most recent stats for the month of May, it is the largest-circulation Sunday newspaper in the Britain, with a circulation of 2.66 million. But its circulation is falling - having dipped below three million in 2009, for the first time in almost 47 years. And parent company News Corp. reported in May that declining ad sales in Britain - along with litigation costs, of course - were a major factor in pushing down profits in its publishing business for the first three months of this year. Earlier this year, News International kicked off a three-year internal review that includes considering how to cut costs. Last week, the company announced that it would pool its editorial resources for News of the World and its weekday sister publication, the Sun, and chief executive Rebekah Brooks told all New International employees that there are job cuts to come.

The advertising backlash

Compounding the pain at News International, the phone hacking scandal has led to an inevitable backlash among advertisers. Marketers often flee scandal to avoid tarnishing their own brand image. The first to cut ties in this case was Ford Motor Co., followed on Wednesday by Lloyds Banking Group PLC, Cadbury PLC and a host of others. The largest advertiser to back away so far is the Vauxhall car brand owned by General Motors Co. It spent £534,000, or $825,000, in advertising with News of the World in the first five months of this year. The scandal also caused some investors to pull back. News Corp.'s shares slid 3.6 per cent on Wednesday amid the news, closing at $17.47 (U.S.) - making it the fourth-worst performing stock on the S&P 500 Index.

The business deal in jeopardy

But it wasn't just advertising troubles that had investors spooked. As with most media companies around the world, TV is far bigger business than newspapers, and the possibility that this scandal could scuttle News Corp.'s planned takeover of British satellite broadcaster BSkyB was a source of concern. BSkyB's shares also fell on Wednesday. News Corp. already owns 39 per cent of BSkyB and launched a bid for a full takeover a year ago. The deal, which values the broadcaster at £12.3-billion (roughly $19-billion), has undergone a prolonged regulatory review. The phone hacking scandal has now led to calls in the British parliament for the deal to be delayed even further and referred to the Competition Commission.

Susan Krashinsky

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