Newly released transcripts of secretly recorded comments by a News Corp. executive reveal that the phone hacking scandal that has engulfed the company over the past few years could cost the firm $1.6 billion, much more than has previously been disclosed.
The reputation of News Corp. and its founder and head, Rupert Murdoch, have taken a hit from the now-acknowledged illegal practices of the company's News of the World and The Sun newspapers, which include generating stories by paying off law enforcement officials and hacking into the cellphones of celebrities, crime victims, politicians and others. Numerous News Corp. employees are currently on trial on charges relating to those crimes.
Today investigative website Exaro released the transcript of a November 22 private meeting Tom Mockridge, at the time the chief executive of News Corp.'s British subsidiary News International, held with arrested journalists at The Sun newspaper to discuss the impact of the ongoing criminal investigation. Mockridge told them that "The hacking probably, by the time it's all over, is going to cost News Corp minimum of £500 million, if not a billion."
In the recording Mockridge also explained that News International could not have survived the scandal without the financial support of its parent company, News Corp. : "There's no way this company, as a stand-alone operation, could afford to financially sustain the exposure it's taken." In December 2012 Mockridge left the company.
Exaro previously released secret audio of Murdoch describing the practice of his newspapers bribing public officials in exchange for news tips as "part of the culture of Fleet Street."
David Folkenflik's recently released book Murdoch's World alleges that executives at the News Corp.-owned Wall Street Journal attempted to hobble that paper's reporting on the hacking scandal.
It's not surprising that the legal costs of the scandal continue to rise. An SEC filing in August disclosed that 21st Century Fox has already set aside $150 million for its sister company News Corp. to pay out as a result of the scandal.
This is not the first time News Corp. has had to pay a heavy price for ethical misdeeds. In 2009 the News Corp. subsidiary News America Marketing had to pay out nearly $650 million as a result of that firm's unethical behavior in the newspaper marketing industry.