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James Murdoch to Shutter News of the World Tabloid

In a lengthy three-page statement, Murdoch said Sunday’s edition of NoW, the main U.K. subsidiary of News Corp., would be the last.

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James Murdoch issued a corporate mea culpa on Thursday evening, revealing plans to shut the 168-year-old News of the World Sunday tabloid in the wake of Britain’s snowballing phone hacking and bribery-for-scoops scandal. The problem is that few observers believe he was telling the whole truth.

“These are strong measures. They are made humbly and out of respect. I am convinced they are the right thing to do,” said Murdoch, the chairman of News International, the main U.K. subsidiary of News Corp. overseen by his father, Rupert. In a lengthy three-page statement, Murdoch said Sunday’s edition of NoW would be the last, and all revenue from the day will go to charitable causes.

NoW employs some 200 staff, and a spokeswoman for News International said that consultations about potential layoffs had yet to begin. She confirmed that staff would be able to apply for other jobs at News International and declined to comment on the cost of the closure.

Following Murdoch’s announcement, shares in News Corp., which is listed on Nasdaq, were trading up 1.1 percent at $18.15 but finished the day down 1 cent at $17.93.

Moments after Murdoch’s apology — and promise of atonement — was released, London was buzzing with speculation that Rupert Murdoch had already been planning to shutter the title and fold it into its sister tabloid, The Sun, which is published Monday through Saturday.

“Shutting News of the World was a brilliant, commercial, self-serving survival strategy,” said Steven Barnett, professor of communications at London’s University of Westminster. “Murdoch planned to integrate the newsrooms anyway, and it’s no coincidence that he recently registered the domain names The Sun on Sunday.com and The Sun on Sunday.co.uk. I think by the end of the year, you’ll see the launch of the new Sun on Sunday,” he added.

Shortly after the closure of the NoW was revealed, Andrew Neil, former editor of the Murdoch-owned Sunday Times of London, tweeted: “Will the Sun go seven days? It makes economic sense in current newspaper climate.”

The News International spokeswoman declined to comment on speculation that a new Sun on Sunday publication would be launched.

Barnett said that closing NoW tidily gets rid of a “toxic brand,” one that could have endangered Murdoch’s takeover of broadcasting company BSkyB, which is set to bring in an operating profit of one billion pounds, or $1.6 billion, later this year. News Corp is seeking full control of BSkyB. It has already agreed to spin off Sky News as a concession to government regulators, and a decision about whether the deal can proceed to the next stage is expected later this month.

“I think it’s become inevitable in the past few days that the paper would close,” said media spin doctor Max Clifford, whose own phone was tapped. “Phone hacking has been a cancer for so long to News of the World that it was starting to damage News International as a brand and News Corp. worldwide. They’ve cut the arm off hoping that the cancer won’t spread to the rest of the body. It’s crisis management at its worst.

“Had they taken drastic measures years ago, this would never have happened. If they’d done a proper investigation themselves when the allegations first emerged, I do think it would have been different. It was starting to affect the BSkyB bid and the credibility of the Rupert Murdoch empire,” Clifford added.

Barnett said that closing NoW won’t make the scandal go away. “There is still going to be fallout, and it is astonishing and intolerable that Rebekah Brooks [chief executive officer of News International], on whose watch this was all happening, should be allowed to stay.” He added the scandal “cuts to the core of journalism. We are talking about hacking into the phones of dead children. It is huge, beyond shock, unspeakable.”