Scandal and Scrutiny Hem In Murdoch’s Empire

For months, News Corporation’s buoyant stock price and solid financial performance, driven by the strength of its United States television assets, had allowed executives based in New York to paint the scandal in the UK as an unfortunate but isolated series of events at the British tabloids, a tiny part of the overall business. But the events in Britain and the resulting scrutiny have begun to take a toll on the broader empire, according to at least a dozen people familiar with the company, including several former News Corporation executives. On May 1, the Culture, Media and Sport Committee of the British Parliament is expected to release a report that could further damage the company’s reputation. Inside the company, one of the biggest concerns is that News Corporation now sits under a magnifying glass, making any potentially suspect business dealings, even from years ago, vulnerable to scrutiny by the United States government.