News Corp.'s BSkyB Deal Appears 'Dead in the Water' (Report)

9:17 PM PST 07/10/2011 by THR staff
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The news comes on the heels of a report revealing additional phone-hacking incidents at the company as well as payments made to police officers.

Just days after British Prime Minister David Cameron said Rupert Murdoch's bid to take full control of BSkyB would face a delay or even total derailment, the U.K.'s Independent is reporting that the deal "appeared to be dead in the water" on Sunday night.

Sources told the paper that attorneys for the government are "drawing up a strategy to halt the £9 billion deal, which looked a certainty only a week ago."

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"We are working on a plan to suspend the deal while the police investigation is taking place," an unidentified senior government source told the newspaper. "But we have to ensure it doesn't get thrown out by judicial review."

On Wednesday, Cameron told the House of Commons that News Corp. would have to face a test of its "fit and proper" eligibility to hold a broadcast license before the deal could be cleared, a process that would have to wait an unspecified time until a series of police and public inquiries conclude.

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But the Independent is now reporting the deal is all but dead in light of a news report in a News International-run paper revealing more incidences of illegal phone hacking as well as payments made to police officers.

The phone-hacking scandal has rocked News Corp., leading to the closure of Murdoch's News of the World on Sunday after 168 years.

Many have called for the resignation of News International CEO Rebekah Brooks, claiming the former NOTW editor had to have known about the illegal activities.

STORY: Rebekah Brooks Tells NOTW Staff She Won't Resign: 'You May Be Angry With Me' 

But Murdoch and son James, who serves as deputy COO and chairman and CEO, international, at News Corp., have stood behind her. The three, in fact, were seen heading to dinner "all smiles" in London on Sunday night, Sky News reported.

"I am satisfied that Rebecca's leadership and standard of ethics and standard of conduct throughout her career are very good," James Murdoch told Sky News last week.


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He and Brooks are expected to face police questioning over the illegal phone-hacking activities.

Former NOTW editor Andy Coulson was arrested Friday in relation to the incident.

STORY: News of the World Staff Takes Shots at Rebekah Brooks in Final Paper, Reports Suggest

Earlier Sunday, Murdoch was seen being driven to News International's headquarters in Wapping reading the final edition of NOTW.

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