James Murdoch's Week Ahead

By DANA CIMILLUCA, PAUL SONNE and RUSSELL ADAMS Having faced a public grilling before a U.K. parliamentary committee last week, News Corp. Deputy Chief Operating Officer James Murdoch will confront a series of behind-the-scenes battles this week as he seeks to stabilize his status at the media giant. Mr. Murdoch faces pressure over his handling of the phone-hacking scandal at the company's News of the World U.K. tabloid, an epic saga that has thrown into question the company's future, as well as Mr. Murdoch's status as the potential successor to his father, 80-year-old News Corp. Chairman and Chief Executive Officer Rupert Murdoch. Especially troublesome for James Murdoch was last week's public accusation by two former News of the World executives that he misled Parliament about when he learned that illegal reporting practices at the tabloid were more widespread. On Thursday, the board of British Sky Broadcasting Group PLC will meet two weeks after the scandal prompted News Corp. to withdraw its bid for the 60.9% of the satellite-TV broadcaster it doesn't already own. The meeting is expected to provide the strongest signal yet of whether the BSkyB board will continue to support James Murdoch as the company's <a href="http://www.salehandbagsbags.com/"><strong>cheap Chanel handbags for sale</strong></a> chairman. Meanwhile, even with the BSkyB bid dead, U.K. communications regulator Ofcom is still studying whether, after the hacking revelations, News Corp. remains "fit and proper" to hold a broadcasting license for BSkyB. And then there is the question of what will come next from former executives of News International, the company's U.K. newspaper unit. Last Thursday, the paper's most recent editor, Colin Myler, and its longtime top lawyer, Tom Crone, said they told James Murdoch in early 2008 of a crucial email suggesting phone hacking went beyond a single journalist, contradicting the company line, put forward by Mr. Murdoch as recently as last week's hearing, that it didn't become aware that hacking was more widespread until much later. A third man—Jon Chapman, former director of legal affairs at News International—has also indicated he wants to correct "serious inaccuracies" he claims were aired at the hearing. It's a far cry from the sigh of relief some at News Corp. breathed after last week's parliamentary hearing, when the initial feeling was that nothing had transpired to make matters worse for either Murdoch. The News Corp. board is expected to meet in person in early August, according to people familiar with the matter, and it isn't expected to make any major decisions related to the scandal at least until then. But the people said the situation could change depending on events. News Corp. owns The Wall Street Journal. On the BSkyB front, people close to the situation said last week that Mr. Murdoch's future as the chairman largely depends on how the phone-hacking story unfolds in coming days. More damaging accusations from his former colleagues—or information that substantiates those already made—could weaken his position further. There are other matters beyond James's role in the scandal that could play a role in <a href="http://www.salehandbagsbags.com/"><strong>cheap Coach handbags for sale</strong></a> determining his future at BSkyB. Now that News Corp. has been forced to shelve its effort to buy the rest of BSkyB, the satellite company is expected to take steps such as returning cash to shareholders that would effectively compensate them for the premium they were expected to get from News Corp. in the buyout deal. But it's not clear how eager News Corp. would be for the cash windfall that such a move could send its way given the media giant's big existing BSkyB holding. A person familiar with the matter said last week that if the interests of News Corp. and other <a href="http://www.salehandbagsbags.com"><strong>cheap dior handbags for sale</strong></a> BSkyB shareholders diverge further, that could ultimately also play a role in determining Mr. Murdoch's future with the broadcaster. Working in Mr. Murdoch's favor is the fact that the scandal has had no measurable impact on BSkyB's business. Furthermore, Mr. Murdoch is credited by a number of BSkyB investors with laying the groundwork for the success the company has enjoyed since his tenure as CEO there. But that could all change rapidly depending on further revelations. Though Thursday's BSkyB board meeting is regularly scheduled, the subject of the phone-hacking scandal is expected to be discussed, people familiar with the matter say. BSkyB directors, representing the company's shareholders, could be seen as a proxy for News Corp. shareholders, since the companies have many top shareholders in common. That means that any move or signal from BSkyB's board on Mr. Murdoch's status in light of recent events could be an indication of his standing at News Corp. too. Meanwhile, Ofcom officials met with police as recently as last week to learn of any developments in the phone-hacking investigation. The regulator has a standing duty to ensure that holders of broadcasting licenses are "fit and proper." In a letter to lawmakers Friday, Ofcom Chief Executive Ed Richards said the body will consider any "relevant conduct" by News Corp. or BSkyB, but he warned it would not rely on "unsubstantiated allegations" to reach a judgment. On Friday, News Corp. said Mr. Murdoch had no plans to step down from the BSkyB board. A spokesman for BSkyB said the company stood by its statement earlier this month that it was satisfied with the current board arrangements. The U.K. parliamentary committee that has been investigating what senior News Corp. executives knew about phone hacking and when they knew it are also due to meet this Friday. While the Culture, Media and Sport committee is meeting for an unrelated matter, it is expected to also consider developments related to phone hacking. That is likely to include written responses from James Murdoch, who will supply additional information following evidence given by him and his father last week. In addition, the committee has asked him to clarify parts of the testimony that he gave following the comments by his former News International colleagues. This week, News Corp. is also preparing for increased scrutiny from the U.S. Department of Justice, which has been preparing to issue subpoenas as part of preliminary investigations relating to alleged foreign bribery and alleged hacking of voicemail of Sept. 11 victims, according to a government official. A person close to News Corp. said last week that the preparation of subpoenas is "a fishing expedition with no evidence to support it." A News Corp. spokeswoman has said that the company has "not seen any evidence to suggest there was any hacking of 9/11 victim's phones, nor has anybody corroborated what are clearly very serious allegations." &mdash;Cassell <a href="http://www.jkzhe.com/plus/guestbook.php"><strong>Yao phenomenon nfl jerseys authentic</strong></a> Bryan-Low and Jessica E. Vascellaro contributed to this article. Write to Dana Cimilluca at dana.cimilluca@wsj.com, Paul Sonne at paul.sonne@wsj.com and Russell Adams at russell.adams@wsj.com