Murdoch Forced to Close UK Paper as Scandal Rages

By James Robinson, Kirsty Scott and Mark Sweney, Guardian UK

07 July 11

News of the World axed by News International. Sunday edition of Murdoch's tabloid to be last in the aftermath of political and commercial fallout from phone-hacking scandal.

ews International announced on Thursday that it is closing the News of the World after this Sunday's edition, with no end in sight to the political and commercial fallout from the phone-hacking scandal after 72 hours of mounting crisis.

Sunday's edition of the paper will be the last, News International chairman James Murdoch told News of the World staff on Thursday afternoon.

Murdoch told employees at the 167-year-old title: "The News of the World is in the business of holding others to account. But it failed to when it came to itself."

Murdoch said in a statement: "Wrongdoers turned a good newsroom bad and this was not fully understood or adequately pursued."

Murdoch also conceded the company had "made statements to parliament without being in full possession of the facts. This was wrong."

He said "the News of the World and News International wrongly maintained that these issues were confined to one reporter" and that the company had passed information to the police which would demonstrate this.

"Those who acted wrongly will have to face the consequences," he said.

Murdoch also said in his statement to staff that he had authorised out-of-court payments to victims of hacking: "I now know that I did not have a complete picture when I did so."

He added: "That was wrong and is a matter of serious regret."

It is the first national newspaper to close since Rupert Murdoch shut News International mid-market tabloid Today in 1995.

The News of the World was Rupert Murdoch's first UK newspaper acquisition in 1968 and its profits helped him build his publishing and broadcasting empire in this country and the US.

The title remains the UK's biggest-selling Sunday paper, with a circulation of 2.66m in May this year. In 1962, when the Audit Bureau of Circulations began publishing regular newspaper sales figures, the News of the World was selling 6.66m.

A spokesman for the company would not comment on whether News International will continue to publish a tabloid title on a Sunday.

The News of the World has been NI's most profitable title for many years.

There are already industry rumours that the News of the World's stablemate the Sun could be turned into a seven-day operation. News International has already announced plans to move to seven-day working across its four titles - the Sun, News of the World, the Times and Sunday Times - and the internet domain name thesunonsunday.co.uk was registered two days ago, although the purchaser's identity is unclear.

Murdoch told staff some of them would be leaving the company and said that was a matter of regret. He paid tribute to their "good work."

There will be no adverts in Sunday's edition and any money already received will be donated to good causes.

The closure of the paper is a dramatic move designed to assuage public anger at shocking revelations about the behaviour of its journalists, but it is unlikely that NI's printing presses will be left idle on a Sunday.

Sky News reported that NI chief executive Rebekah Brooks was in tears as she told staff the title is to close.

Labour MP Tom Watson, who has been highlighting the phone-hacking scandal at the paper for two years, said: "Rupert Murdoch did not close the News of the World. It is the revulsion of families up and down the land as to what they got up to. It was going to lose all its readers and it had no advertisers left. They had no choice."

The News of the World, which has averaged about £660,000 in advertising income each weekend so far this year according to industry estimates, was already facing a widespread advertiser boycott on Sunday.

A revolt by advertisers gathered pace in the past 24 hours as Prime Minister David Cameron announced public inquiries into phone hacking and criticism of the paper's activities mounted from politicians and the general public.

There were also the first signs of a possible boycott by readers, with one independent convenience chain admitting on Thursday that it would not be stocking the title in its five stores across Essex and Cambridgeshire. The owner said he took the decision because one of his shops, at Ely station, is close to Soham where Holly Wells and Jessica Chapman were murdered.

Earlier this week it was alleged that Glenn Mulcaire, the private detective formerly employed by the paper, may have hacked into the phones of Wells and Chapman's parents.

The number of alleged phone-hacking incidents perpetrated by the paper in years gone by had also continued to grow, with the latest involving families of members of the armed forces killed in Iraq and Afghanistan. More details were also emerging about alleged payments by News of the World journalists to Metropolitan police officers.

Most NoW advertisers, including Sainsbury's, Asda, Dixons, Boots, Specsavers, Ford, Halifax, Co-op and Npower had already pulled their campaigns. It is understood News International only had four left - BSkyB, British Gas, Mars and Tesco.

The decision to close the paper is understood to have come following a meeting on Thursday between executives including Murdoch, who is also the deputy chief operating officer of NI-owner News Corp and oversees the UK business, Brooks, and the publisher's commercial managing director, Paul Hayes.

Rival publishers were said by media buying agency sources to be descending on advertisers like "ambulance chasers" looking to snap up potentially millions in ad revenue from the "toxic" News of the World, with companies responsible for more than £8m in annual spend pulling campaigns in the past 24 hours.

A number of media buying agency executives said they had been inundated with calls from rival publishers querying what the advertisers they represent might be looking to do with their budget.

"It is like ambulance chasing, calls are coming from rivals [newspapers], smaller publishers, radio and outdoor - you name it," said one senior industry source. "The NoW brand is now so toxic that by association clients definitely want out this weekend at least."

News Corporation Deputy Chief Operating Officer and News International Chairman James Murdoch's statement to staff announcing the closure of the 168-year-old Sunday paper:

"I have important things to say about the News of the World and the steps we are taking to address the very serious problems that have occurred.

It is only right that you as colleagues at News International are first to hear what I have to say and that you hear it directly from me. So thank you very much for coming here and listening.

You do not need to be told that The News of the World is 168 years old. That it is read by more people than any other English language newspaper. That it has enjoyed support from Britain's largest advertisers. And that it has a proud history of fighting crime, exposing wrong-doing and regularly setting the news agenda for the nation.

When I tell people why I am proud to be part of News Corporation, I say that our commitment to journalism and a free press is one of the things that sets us apart. Your work is a credit to this.

The good things the News of the World does, however, have been sullied by behaviour that was wrong. Indeed, if recent allegations are true, it was inhuman and has no place in our Company.

The News of the World is in the business of holding others to account. But it failed when it came to itself.

In 2006, the police focused their investigations on two men. Both went to jail. But the News of the World and News International failed to get to the bottom of repeated wrongdoing that occurred without conscience or legitimate purpose.

Wrongdoers turned a good newsroom bad and this was not fully understood or adequately pursued.

As a result, the News of the World and News International wrongly maintained that these issues were confined to one reporter. We now have voluntarily given evidence to the police that I believe will prove that this was untrue and those who acted wrongly will have to face the consequences.

This was not the only fault.

The paper made statements to Parliament without being in the full possession of the facts.

The Company paid out-of-court settlements approved by me. I now know that I did not have a complete picture when I did so. This was wrong and is a matter of serious regret.

Currently, there are two major and ongoing police investigations. We are cooperating fully and actively with both. You know that it was News International who voluntarily brought evidence that led to opening Operation Weeting and Operation Elveden. This full cooperation will continue until the Police's work is done.

We have also admitted liability in civil cases. Already, we have settled a number of prominent cases and set up a Compensation Scheme, with cases to be adjudicated by former High Court judge Sir Charles Gray. Apologising and making amends is the right thing to do.

Inside the Company, we set up a Management and Standards Committee that is working on these issues and that has hired Olswang to examine past failings and recommend systems and practices that over time should become standards for the industry. We have committed to publishing Olswang's terms of reference and eventual recommendations in a way that is open and transparent.

We have welcomed broad public inquiries into press standards and police practices and will cooperate with them fully.

So, just as I acknowledge we have made mistakes, I hope you and everyone inside and outside the Company will acknowledge that we are doing our utmost to fix them, atone for them, and make sure they never happen again.

Having consulted senior colleagues, I have decided that we must take further decisive action with respect to the paper.

This Sunday will be the last issue of the News of the World.

Colin Myler will edit the final edition of the paper.

In addition, I have decided that all of the News of the World's revenue this weekend will go to good causes.

While we may never be able to make up for distress that has been caused, the right thing to do is for every penny of the circulation revenue we receive this weekend to go to organisations – many of whom are long-term friends and partners – that improve life in Britain and are devoted to treating others with dignity.

We will run no commercial advertisements this weekend. Any advertising space in this last edition will be donated to causes and charities that wish to expose their good works to our millions of readers.

These are strong measures. They are made humbly and out of respect. I am convinced they are the right thing to do.

Many of you, if not the vast majority of you, are either new to the Company or have had no connection to the News of the World during the years when egregious behaviour occurred.

I can understand how unfair these decisions may feel. Particularly, for colleagues who will leave the Company. Of course, we will communicate next steps in detail and begin appropriate consultations.

You may see these changes as a price loyal staff at the News of the World are paying for the transgressions of others. So please hear me when I say that your good work is a credit to journalism. I do not want the legitimacy of what you do to be compromised by acts of others. I want all journalism at News International to be beyond reproach. I insist that this organisation lives up to the standard of behaviour we expect of others. And, finally, I want you all to know that it is critical that the integrity of every journalist who has played fairly is restored.

Thank you for listening."