The Sky bid is dead – and the expectation is that Rupert Murdoch won't be able to come back and bid for 100% of the satellite broadcaster for several years, if at all. The billions sitting on News Corp's balance sheet will most likely be spent abroad, and the summer of 2011 may well turn out to be the high water mark of Murdoch's influence over the British media.
His advisers were quick to indicate that the media mogul's company would now seek other commercial opportunities – "we're likely to deploy our capital elsewhere" - one source said, and while the media giant may not be the most transparent group to outsiders it is all too aware that it is now so unpopular that expansion in Britain can no longer be on the agenda.
Chase Carey, Murdoch's No 2, made a diversion from a planned trip to Germany on Wednesday morning and flew into Britain, where the final decision to walk away was taken before David Cameron and Ed Miliband jousted at prime minister's questions. Murdoch, his eldest children and other board members knew broadly what the prime minister would say – as company insiders recognised, News Corp has to sort out "its own mess" first.
Nor can Murdoch come back for another Sky bid easily. Any new approach would restart the regulatory clock, advisers to the culture secretary, Jeremy Hunt, indicated on Wednesday, and it took a year to fail to get a decision this time around. Meanwhile, it will take several years for criminal, judicial and parliamentary enquiries into phone hacking and media standards to conclude – during which time political and public opinion is unlikely to favour a deal.
There are signs too that Murdoch may be willing to go further in retreating from the UK. News Corp's Wall Street Journal noted on Wednesday that Murdoch's company had "informally explored" whether there could be any buyers for the Times, the Sunday Times and the Sun – but the problem with selling the newspapers is that it won't rid him or the company of the criminal inquiries, which look set to be far more exhaustive than ever thought.
Murdoch has long said he is "too sentimental" to sell any newspapers, but the report in the Wall Street Journal will be enough to excite interest for a set of newspapers that nobody believed would ever come on the market. In the current climate, if he were to receive another £1bn offer for the Sun – as he did from Richard Desmond in 2009 – there is a genuine possibility it would be accepted. Any price for the loss-making Times titles could actually be attractive, a point not lost on concerned staff.
At the same time, the heir apparent James Murdoch is in the process of relocating from London to New York. In the light of the hacking claims, there are already signs that UK institutional shareholders are questioning whether he can remain as chairman of BSkyB, the company he led for four years until the end of 2007. He may also consider a dignified retreat, rather than face yet another British battle that could create an unwelcome precedent if he were ever nominated to become chief executive of News Corp.
London was the first place Murdoch came after building an Australian media group, buying the News of the World in 1969 and relaunching the Sun a year later. Later, as he developed his US interests in the 1980s, first buying the Fox film studio and subsequently creating the Fox broadcast network and cable channels, the UK reduced in importance at a company that grew rapidly in the 1990s and 2000s, despite his ongoing interest in the newspapers.
The arrival of James Murdoch as chief executive Europe and Asia, tipped the balance of power back towards the UK. Over the past four years, helped by the presence of James and sister Elisabeth in this country, a parallel court developed, based around business meetings in Wapping and Westminster, and weekends in west Oxfordshire. It was a court that had Rebekah Brooks at its heart, David Cameron up the road, and extra colour provided by the likes of Top Gear presenter and Sunday Times columnist Jeremy Clarkson.
For all the networking, though, News Corp failed to build up reserves of friends, and not just because of the failure to contend with the hacking scandal, but the terrifying way the business exercised power. James Murdoch, charming and combative in equal measure, gave an uncompromising address to the MediaGuardian Edinburgh International Television Festival in 2009, attacking the BBC, and announcing that "the only guarantee of independence is profit". The Murdochs chose the Labour party conference a year later to announce via the pages of the Sun that "Labour's lost it" – a legitimate political switch underpinned by ruthless timing.
There was talk, even, that James Murdoch might one day run News Corp from the British capital, because that would have forced the mostly American company to have a global orientation. The younger Murdoch sees opportunities in Germany, where News Corp is trying to replicate its BSkyB success; in developing markets, most notably, India; and in other countries – such as Italy – where News Corp is the challenger brand, seen as a provider of impartial news in a media economy dominated by Silvio Berlusconi.
However, any possibility of London-based leadership looks less likely now at a company in full retreat. Two weeks ago, it looked inevitable that Hunt would approve a merger that would fuse the biggest broadcaster, Sky, with more than £6bn of turnover, with the company that accounted for 37% of all newspapers sold in the UK; in less than a fortnight Murdoch has had to close one of his four newspapers, and walk away from a bid for BSkyB, for years, if not forever. The days of the Murdochs in Britain are not over, but their influence is today far from its peak.
