Scandal at News Corp.

Did Murdoch Over-react by Shutting Down News of the World?

News Corp. Paper's Problems Became 'Cancerous' Years Ago, Crisis Experts Say

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Rupert Murdoch has had his hands full with a journalism crisis that makes typical scandals look like kids stuff.

But News Corp.'s decision to completely close down the News of the World after a final edition on Sunday is the most extreme damage-control measure some crisis communications experts say they've seen.

"It's highly unusual to shut down a publication because of a scandal," said Gene Grabowski, senior VP at crisis PR firm Levick Communications.

News brands under siege more often sack a reporter or editor, perhaps pledge a commitment to better journalistic practices, and watch advertisers and readers quickly move on. That's more or less how The New York Post, a News of the World sibling within News Corp., handily survived a scandal of its own in 2006, when video appeared to capture a writer for its Page Six gossip column demanding money from billionaire Ron Burkle in exchange for positive coverage. The New York Times similarly emerged from the Jayson Blair plagiarism and fabrication scandal in 2003, albeit throwing its top two editors overboard in the process.

Although those cases differed from the current situation -- they didn't involve criminal charges, for one thing, and The Times broke the Blair story itself -- shutting down the News of the World still stands out.

Lost ad dollars and the risk of damaging News Corp.'s reputation wouldn't necessarily have been serious enough on their own to shutter a 168-year-old institution, Mr. Grabowski said. "I don't think advertisers are scared away from the World," he said. "A few might have gone away for a while, but as long as circulation holds I think advertising is there."

There is likely "more to this story than meets the eye," he added. "Murdoch is willing to make a sacrificial lamb out of the World to achieve something greater."

That something greater is likely News Corp.'s effort to increase its stake and buy the rest of British Sky Broadcasting, which some oppose on the grounds that the company already controls too much of the media in Britain. The government had seemed close to approving the deal, but reportedly delayed its decision until the fall as the News of the World scandal worsened this week. News Corp. may have decided that closing the newspaper would alleviate pressure on the government -- and that saving the paper wasn't worth its ambitions in satellite TV.

"When I saw the breaking news on Twitter and CNBC earlier today I was very surprised that the company made a full-stop move so fast," Mike Huckman, senior VP-director of media strategy at MSLGroup, told Ad Age in an e-mail. "But with the gathering global storm over the voicemail hackings and the huge BSkyB deal reportedly hanging in the balance, I also don't see that Murdoch and News Corp. had any other choice."

More than one PR pro said the News of the World's scandal became "cancerous" years ago, when a strong response might have prevented the pressure for an even more draconian response today.

"They didn't really deal with it properly in the beginning," said a person who has worked on News Corp. properties. The newspaper's ultimate destruction shows that the slightest hint of scandal can "metastasize out of control."

"Crisis management in situations such as this involves definitive action that communicates a sincere sense of wrongdoing and willingness to repair the wrongdoing," DKC CEO Sean Cassidy said. "This situation qualifies as the most extreme end of that that I've ever seen."

What was most at stake here, he said, was an infectious and sure-to-be ongoing story that wouldn't go away without "cutting off a cancerous limb."

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