Posted at 04:38 PM ET, 07/06/2011

Is Rupert Murdoch’s News of the World revealing the dark arts of tabloid business?


News Corp Chief Executive Rupert Murdoch. (Reuters)

It’s the stuff of tabloid fodder:

Murder, dirty cops, political corruption, movie starlets.

Only this time, one tabloid isn’t covering the salacious stories. It’s creating them.

In a story that’s stretched over five years, the News of the World phone hacking scandal has kicked into high gear over the past few days with new allegations of gross misdeeds. The British tabloid, owned by Rupert Murdoch’s News Corp., has gotten heat for reportedly breaking into the phones of celebrities in an attempt to pierce the inner world of politicians, the royal family and sports figures, among others. But the story took a much more sinister turn this week when the Guardian reported that private investigators working for the tabloid hacked into the phones of victims of high-profile crimes.

It has created a political uproar in England, where Conservative Prime Minister David Cameron continues to support Murdoch’s bid to take over satellite broadcaster BSkyB. Opposition Labor Party leaders have called for the sale to be halted in the wake of the revelations.

The fallout has spread around the world, with critics in other countries connecting the scandal to the performance of Murdoch-owned papers closer to home. Alex Pareene writes at Salon, “The practices of News of the World are an outlier, but not an anomaly, for News Corp.” He points to the bribery case defamation suit filed against the New York Post by the woman accusing Dominique Strauss-Kahn of rape. The Post dubbed her a “hooker” “in huge, screaming, million-point text,” Pareene writes.

The motivation for the sensationalism? Circulation numbers. In 2008, the Post’s Karla Adams wrote that since the 1970s circulation had fallen 34 percent for U.K. tabloids, sometimes called red tops for their bright red banners at the top of the page.

Even so, “the tabloids have plenty of swagger left in their step. The circulation of the four national red tops — The Sun, Mirror, Daily Star and Daily Sport — was more than double that of the five serious papers — Telegraph, Times of London, the Guardian, the Independent and Financial Times — and by and large, red tops are much more profitable.”

The News of the World may be finding out that being on the other side of the scandal is not very profitable. Stock of News Corp. dropped four percent in the U.S during afternoon trading, CNN reports. And a number of companies, including Virgin and Ford, have cancelled their advertising contracts with the tabloid.

But as the tabloids have taught us: With a story this juicy, it likely won’t be leaving the headlines any time soon.

By  |  04:38 PM ET, 07/06/2011

 
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