Elisabeth Murdoch Faults Brother James and 'Profit Without Purpose'

Hacking Scandal Hurt Case for Press Freedom, Murdoch Says

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Elisabeth Murdoch said the hacking scandal at U.K. newspapers owned by father Rupert Murdoch's News Corp. hurt the case for press freedom and that her brother James had overstated the importance of profit when he called it "the only reliable, durable, and perpetual guarantor of independence."

Elisabeth Murdoch
Elisabeth Murdoch

About 60 people have been arrested in probes since bribery as well as phone and computer hacking were uncovered at the News International division. The scandal caused the company to close the News of the World newspaper in 2011 and led Prime Minister David Cameron to order an inquiry chaired by Judge Brian Leveson to look at press practices.

"It is very difficult to argue for the right outcome -- which must be the fierce protection of a free press and light-touch media regulation," Ms. Murdoch, chief of News Corp.'s Shine Group and Rupert's second daughter, said in a copy of a speech for the annual MacTaggart lecture in Edinburgh on Thursday. "Sadly the greatest threats to our free society are too often from enemies within."

Eight former journalists were charged in July with conspiring to intercept voice mails, including former News International Chief Executive Officer Rebekah Brooks and former News of the World Editor Andy Coulson. In the wake of the scandal, James Murdoch resigned first as chairman of News Group Newspapers and then as executive chairman of News Corp's newspaper arm.

"One of the biggest lessons of the past year has been the need for any organization to discuss, affirm and institutionalize a rigorous set of values based on an explicit statement of purpose," Ms. Murdoch said, a week after News Corp. revamped its ethics and compliance program.

Ms. Murdoch, whose Shine TV production company was acquired by News Corp. last year for about $214 million, said her brother James had overemphasized profit when he addressed the same media conference three years ago.

"James was right that if you remove profit, then independence is massively challenged," she said, according to the text of the speech, "but I think that he left something out: The reason his statement sat so uncomfortably is that profit without purpose is a recipe for disaster."

In his 2009 MacTaggart lecture, James Murdoch also criticized the dominance of the British Broadcasting Corp. with its "guaranteed and growing" income from the license fee paid by U.K. TV owners. He described the BBC's activities and ambitions as "chilling."

Ms. Murdoch instead defended the BBC. "Let me put it on record that I am a current supporter of the BBC's universal license fee," she said.

In a question and answer session Friday morning, Ms. Murdoch also confirmed that she had asked Rebekah Brooks to resign as CEO of News Corp.'s U.K. newspapers division and encouraged James to "take a step back."

"It is true," she said, according to the Guardian.

-- Bloomberg News --

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