The Coming Downfall of News Corp.

News Corporation, which owns the likes of Fox News, the Wall Street Journal, New York Post, and British Papers such as the Sun and now-shuttered News of the World, and film and publishing companies is on the ropes following disturbing revelations about its improper conduct at several of its British papers over the past decade including hacking of voice mail accounts, bribing public officials, and a whole laundry list of other malfeasance.

As a result, Rupert Murdoch has abandoned his efforts to take over the British BSkyB television network.

A company statement quoted Chase Carey, News Corporation’s Deputy Chairman, President and Chief Operating Officer, as saying “We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate.”

“News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it,” the statement said.

The development also seemed to end what, for years, had been a close, cozy and influential relationship with the British establishment.

Only hours before the announcement, Prime Minister David Cameron had sought to distance himself from Mr. Murdoch and had urged him to drop the bid for BSkyB. The announcement came just before Parliament was set to approve a cross-party call for Mr. Murdoch to abandon his long-cherished desire to take full control of the lucrative satellite broadcaster.

The scandal has also convulsed the British politicians, press and police, forcing them to contemplate unheard-of scrutiny of their ties with each other.

On Wednesday, Mr. Cameron offered details for the first time of a broad inquiry into those relationships to be led by a senior judge, Lord Justice Leveson. Mr. Cameron told Parliament that it would have the power to summon witnesses to testify under oath. The announcement came as Mr. Cameron fought to recover the initiative in a scandal that has turned into potentially the most damaging crisis of his time in office.

That was after the British parliament united in its call for him to drop the takeover bid. News Corp's got to fight a rearguard action to keep the mess from spreading, but because so many within the organization have switched jobs within the company - going from one of the British papers to a US outlet, or vice versa (including those at the heart of the scandal in the UK), trying to contain this is like a wildfire that is splitting out in hundreds of different directions at once and can't be controlled.

If it turns out that Americans, including 9/11 victims, were among the victims of a hacking effort by News Corporation affiliates, the company and Murdoch would be finished. The FCPA (Foreign Corrupt Practices Act) is just the tip of the iceberg, and considering that there are inklings that they may have tapped phones, hacked accounts of 9/11 victims families, or otherwise engaged in illegal activities you're going to see prosecutors opening up cases in New York City and elsewhere.