UPDATED: Shareholders Beware: Financial Impact Of Murdoch Hacking Scandal Widens

Blog ››› ››› SARAH PAVLUS

An "influential website for parents" has canceled a contract with U.K. broadcaster Sky -- which Rupert Murdoch partially owns, and is seeking to fully acquire -- following allegations that Murdoch's News of the World tabloid hacked the voicemails of a slain teen girl, potentially impeding a police investigation and giving the girl's family false hope that she was still alive.

The Telegraph reported:

Mumsnet, the influential website for parents, announced that it had cancelled a contract with Sky, which is part of the Murdoch media empire. The group removed the broadcaster's advertisements from its website after an outcry from members of the discussion forum over the Milly Dowler allegations.

The contract was believed to have been worth about £30,000 to Mumsnet but Justine Roberts, co-founder of the group, said she did not think it was right to "take the Murdoch shilling" while investigations continued into phone hacking at the newspaper.

"Sky were running an ad campaign and our members have been very active in talking about the News of the World," she said. "I have rarely seen anything where they have been quite so unanimously appalled. We have taken the decision to remove that ad campaign from our website."

Brand Republic noted that Mumsnet's decision to cancel advertising promoting Sky's services "is the first example of contagion between News of the World and other Rupert Murdoch-controlled media organisations." The Guardian wrote that Mumsnet's actions are "one indication of the wider impact the phone hacking scandal is having on News International beyond the News of the World."

From the Brand Republic report:

[Mumsnet chief executive Justine Roberts] said even though Murdoch's News Corporation, which owns News International, publisher of the News of the World, is only a part owner of BSkyB, the community believed it should not be running advertising it felt was associated with the Milly Dowler phone-hacking allegations currently engulfing the paper.

She said Mumsnet's values were based on "helping mothers to have a better life", and promoting Sky at this time did not fit with its stance.

Roberts said: "The Milly Dowler allegations have been universally condemned on the thread. The story has really put phone hacking into perspective for everyone. It is not some nebulous media war any more."

Additionally, The Telegraph reported that the News of the World hacking allegations may be threatening subscriptions to another Murdoch-owned publication, The Times:

Highly critical messages were also posted on the website of the News of the World's sister paper, The Times, threatening to cancel their subscriptions.

One reader, David Thornton, posted a message saying: "The utterly morally bankrupt organisation that is News International will never get another penny from me. I am cancelling my Times and Sky subscriptions. Anyone who buys the News of the World ever again should feel thoroughly ashamed of themselves."

Yesterday, in response to the new hacking allegations, Ford Motor suspended all advertising with News of the World, and several other companies -- including T-Mobile -- are reportedly considering following suit.

A July 5 Financial Times editorial noted the hacking scandal "has inflicted great reputational damage on News Corp. This should be of concern not just to Mr Murdoch but also to the company's wider shareholder base. After all, the group is seeking to expand its UK interests massively with the acquisition of the broadcaster, BSkyB."

UPDATE: The AP reports today that investors "dumped shares in News Corp., causing them to slump 4.2 percent on the Nasdaq index in New York."

Reuters reports that in addition to Ford, car makers "Vauxhall and Mitsubishi Motors, along with Britain's biggest high street lender Lloyds and billionaire Richard Branson's Virgin Holidays, have dropped advertising in the News of the World due to allegations of hacking by the newspaper."

Reuters also reported the following comments "from major advertisers, many of them responding to a barrage of messages on Twitter from consumers calling for boycotts of News of the World and other UK titles belonging to Rupert Murdoch including The Sun and The Times":

Bourne Leisure (Butlins, Haven Holidays, Warner Leisure): "We review all our sources of advertising regularly and we will not be advertising in NoW (News of the World)."

Coca-Cola: "We have no advertising currently running with the News of the World and none scheduled for the future. We are shocked by the new allegations that have been made."

The Co-operative Group: "The Co-operative Group has taken the decision to suspend temporarily any further advertising and promotional activity with the News of the World until the outcome of the investigation is known. The Group is a consumer-owned business which adheres to strong ethical standards. These allegations have been met with revulsion by the vast majority of members who have contacted us."

EasyJet: "EasyJet understands the concerns raised by the public, including many of our own staff and passengers, about these serious and shocking claims. We will actively monitor the situation and await the outcome of any investigation."

Ford: "We are awaiting an outcome from the News of the World investigation and expect a speedy and decisive response. Pending this response we will be using alternative media within and outside News International Group instead of placing Ford advertising in the News of the World."

Halifax (Lloyds Banking Group): "In recognising and responding to consumer reaction,Halifax has cancelled an advertisement in this Sunday's News of the World. This was a tactical decision in the short term whilst we carefully consider our longer term position and its implications."

Marks & Spencer: Company says it advertises in The Sun, The Times and Sunday Times but not News of the World: "It's something that we'll keep a close eye on to see how things develop. We're watching what's happening and following the developments. At this stage we do continue to advertise with them."

McDonald's: Says it has not advertised in the News of the World since 2010 and has no plans to do so. It will continue to advertise in The Sun.

Mitsubishi Motors Corp: "Mitsubishi has now suspended its NotW (News of the World) media spend while the paper's being investigated regarding the Milly Dowler phone hacking allegations ... Based on a Facebook user suggestion, Mitsubishi is donating its NotW ad spend to the Childline charity."

Morrisons: "We won't be changing our advertising policy."

NPower: "We note the concerns which have arisen on the back of fresh allegations of phone hacking against the News of the World. We are currently reviewing our options."

Procter & Gamble: "We are very aware of the situation and share the growing concern amongst the public. We are monitoring it closely and will be reviewing our options. We will wait for the outcome of official investigations before commenting further."

Renault: "Renault acknowledges the concerns raised regarding the allegations of phone hacking by the News of the World. We can confirm that we have no media advertising planned with the News of the World."

J Sainsbury: "We advertise in hundreds of newspapers, magazines, and TV and radio stations. The views and practices of any of organisations that carry our advertising do not represent those of Sainsbury's. That said, it would be prudent to await the outcome of the investigation."

T-Mobile UK: "We are currently reviewing our advertising position with News of the World, following the recent allegations, and await the outcome of the ongoing police investigation."

Tesco: "These latest allegations will cause huge distress to a family which has suffered enough. It's now a matter for the police; like everyone, we await the outcome of their investigation."

Thomas Cook: Says it has no advertising planned with News of the World at the moment.

TUI Travel: "Thomson and First Choice advertise from time to time with News of the World depending on what campaigns we have. We have no plans to advertise this week. Without wishing to prejudice any investigations in progress, we are reviewing the options, as is reasonable in such unusual circumstances.'

Vauxhall: "Vauxhall has suspended advertising in the News of the World. It will reconsider its position pending the outcome of investigations into the allegations of phone hacking."

Virgin Holidays: "We have reviewed what we had booked for this Sunday (adverts in the News of the World) and have decided not to go ahead with those bookings. We will review what we have booked for the future at a later date."

Vodafone: Says it is reviewing the situation.

William Hill: "We are currently reviewing our commercial arrangements in light of the current situation."

Rupert Murdoch
News of the World
Phone Hacking Scandal
NewsCorp News
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