Recently, Rupert Murdoch raised the curtain on what is, in a bit of hyperbole, being billed as the trial of the century.
"Big media trials in London in 2 weeks," the News Corp. topper wrote on Twitter. "Remember, everyone innocent until proven guilty, entitled to fair trial in most countries."
News of the World, with two of Murdoch's former editors, Rebekah Brooks and Andy Coulson, centerstage. They and six others face charges in a trial scheduled to start at London's Old Bailey court Oct. 28. Though the fallout from the scandal has faded from the headlines in the U.S., the potential impact on the Murdoch media empire is still very much in play.
Even after the trial is over, the newly split News Corp. and 21st Century Fox still have to grapple with an ongoing investigation as to whether federal anti-bribery laws were violated in the U.S. Also on the docket: a civil suit brought by a group of shareholders, and the scrutiny of a top Democratic Senate committee chair.
It's no wonder Murdoch issued a pre-trial warning cautioning against a rush to judgment in a case that undoubtedly will be fodder for many of News Corp.'s Fleet Street rivals.
Many will be watching for revelations not only over what those on trial knew, but also when they knew it, in proceedings that could stretch into next year.
"There is a real possibility that journalists faced with the prospect of imprisonment will be more forthright than they've been before about what really happened," says Raymond Snoddy, a British journo who covers the U.K. media industry. "This could pose problems for senior executives at News Corp."
In the U.S., Wall Street's attention may be diverted only if there is a big bombshell. "The market keeps shrugging it off," says Tuna Amobi, equity analyst at Standard & Poor's, noting the feeling that the market, barring some major developments, has absorbed "the worst of the news." In its public disclosure, News Corp. has said it incurred legal expenses of $382 million over the scandal as of June 30, and that it may face an estimated $66 million more.
A bigger risk, Amobi notes, exists in a federal investigation as to whether News Corp. violated an anti-bribery law, the Foreign Corrupt Practices Act, which could mean substantial fines. Although the Securities and Exchange Commission and the Dept. of Justice won't comment on the matter, two years ago, Sen. Jay Rockefeller, D-W.Va., and other lawmakers asked for an investigation as to whether News of the World reporters' alleged payoff of British police officers for information amounted to a violation.
Rockefeller, chairman of the Senate Commerce Committee, last year sent out a query to the British authority leading an inquiry there, seeking evidence that unethical or illegal business practices occurred on U.S. soil.
Several watchdog groups have called on Murdoch's broadcast licenses to be revoked by the FCC, and as unlikely as that may sound, at the very least, Rockefeller's committee, which oversees the agency, can be a great headache for the conglom. But Rockefeller has not said whether he would launch such an investigation, and his spokeswoman says merely that his "concern still stands."
The scandal has led to a civil shareholder suit, with Avon Pension Fund as lead plaintiff, alleging that News Corp., Murdoch, his son James, Brooks and former Dow Jones & Co. CEO Les Hinton are liable for not coming forward with the full details of the breadth of a scandal that risked the company's "business and reputation." The defendants are seeking dismissal, including on grounds that the revelations were properly disclosed.
If the case were to go to trial -- and that is a big if -- Murdoch would be more than a 140-character bystander. It may not be the trial of the century, but Wall Street would certainly sit up and take notice.
Events leading up to the Oct. 28 trial in the phone-hacking scandal.
JAN. 14, 2011
News of the World suspends a senior assistant editor for voicemail interception, and News Intl. announces it will investigate.
APRIL 8, 2011
News Intl. issues an apology, confirming evidence of wider journalistic misconduct.
JULY 7, 2011
News Corp. announces News of the World will shutter.
JULY 8, 2011
Former News of the World editor Andy Coulson is arrested. Editor Rebekah Brooks is arrested 9 days later.
JULY 13, 2011
News Corp. ends its effort to take full control of BSkyB.
MAY 1, 2012
A Parliamentary committee report concludes three senior News Corp. execs gave misleading testimony, and that Murdoch is not fit to run the company.