Class action lawyers had earlier demanded that Isaacson provide evidence, based on his interviews with Steve Jobs, about why Jobs asked publishers to sell books on Apple’s iPad device. Isaacson refused to hand over his notes and invoked a New York law that allows journalists to shield their sources in many situations.

The lawyers, who want Apple to pay for allegedly fixing book prices, had subpoenaed Isaacson and said the reporters’ shield did not apply. Last week, however, court documents show the parties agreed to drop Isaacson from the case.

The Isaacson dispute comes at a time when Apple’s antitrust showdown with the Department of Justice and class action lawyers is coming to a head. While the five publishers who were also named as defendants decided to settle, Apple is rejecting the accusations that it acted as the hub for an illegal conspiracy to raise book prices and thwart Amazon. Meanwhile, Amazon executives are poised to testify against Apple.

Even though the Isaacson biography is no longer part of the case, a court transcript shows Steve Jobs will remain a central figure. In response to a question about who decided to sign contracts with book publishers, Apple executive Keith Moerer said, “Ultimately, I would say it was — Steve. But working closely with — with Eddy, Mr. Cue.”

Meanwhile, other recently filed court documents identify one recipient of a highly publicized Jobs email about Amazon and pricing — the recipient was James Murdoch, a senior executive at News Corp, parent company of HarperCollins. The other recipient(s) are still redacted. You can see the email below:

Steve Jobs Emails by

Succession

Lachlan Murdoch may yet end up running one of the companies some day but his father smacked down speculation that he will be the publishing CEO post-spin. FBN’s Neil Cavuto, did the house interview but also asked some of the same questions many of us would. Cavuto inquired about the fate of sons Lachlan, who left the company but is not on the board, and James, the deputy COO who was hit hard by the hacking scandal. Murdoch quickly reminded him (as he did another interviewer later) that he also has a daughter involved with the company. Cavuto shrugged that off and asked again about expanded roles for Lachlan and James. Murdoch’s reply:

“Well, they have to earn it, and they have to want it.”

He added, “Lachlan is very happy running his own businesses in Australia. And he loves living there. So we’ll see.”

Pushed on Lachlan as publishing CEO, Murdoch replied: “I think that is highly unlikely.” Cavuto didn’t ask the same question about James, and he seems to have forgotten about Elisabeth, who came back to News Corp. when it acquired her Shine production company. She has yet to join the News Corp. board as planned.

Murdoch’s succession plans have long been a concern and a matter of great interest, especially for investors. During an interview on CNBC, Murdoch, 81, passed up a chance to talk up Chase Carey as his successor, opting first for a flippant “you’ll have to talk to my board after they bury me” — before admitting there probably would come a time when he shouldn’t run the company. Carey, deputy chairman and COO of News Corp., is slated to be president and COO of the media and entertainment company; Murdoch touted him as his successor last year. But now he’ll need two.

What about James? Faber asked if James Murdoch, who has been under fire for his management of UK publishing unit News Int. as part of the hacking scandal that broke last July, has a damaged reputation now that would keep him from following his father. Murdoch defended his son, saying that if anyone’s reputation had been damaged, it was his own.

Publishing

And what about a CEO for publishing? (Someone not involved suggested to me this week that the best punishment for James, whose greatest success has been with BSkyB and other pay TV, would be to give him that job.) Murdoch said repeatedly that the expected length of the process, about a year, provides “plenty of time to make up our mind who actually will be CEO at my right hand.” He told Bloomberg News, ” We’ll be working exactly as we are today for approximately 12 months, and within that time, I will make my choice. … Unless there’s something very extraordinary I think it would be internal.”

That would seem to make Lex Fenwick, the new CEO of Dow Jones, a leading contender. Murdoch called Dow Jones the “center” of the new company, stressing its global expansion plans and paying digital subs. He also told CNBC he was considering a name change for the Wall Street Journal to WSJ.

Murdoch insists the publishing company not only can survive on its own, but can grow, telling Bloomberg’s Liu: “It will have a positive cash flow from day one with the assets going into it and it will have no debt. It will also have cash reserves. We have as a company very large reserves of cash in the bank earning next to nothing.”

Some of those billions are being used for the share buyback that helped the stock price improve following the hit from hacking and the loss of the deal to buy the rest of BSkyB.

He told CNBC: “We throw off plenty of cash in Australia but we reorganizing so we’ll throw off more. We’re making cash in Britain, not as much as before because News of the World is gone and we started the Sunday Sun. Dow Jones is very cash positive.”

Although revenue has been shrinking, the publishing division is firmly in the black without assets like investments in Australian pay TV being added. What about cost cutting? That’s already been going on at various properties. Murdoch told Liu, “We are going through a reorganization in Australia, which will result in cuts; we have some reorganizing starting in Britain. Here at the Wall Street Journal, we’re going to be as efficient as we can, of course. I would say net net around the world, we’ll be increasing our numbers and increasing our costs — and hopefully increasing our revenues.”

The new company will have enough to keep investing and experimenting but Murdoch told the Financial Times each paper ultimately will be expected to stand on ts own:

“You’re not going to see any print losses tolerated anywhere. We may start something that’ll take three years to turn a profit, or we’ll have maybe a bad time.”

The patron saint of paywalls

Murdoch wants to be viewed as the patron saint of paying for content, claiming that he was the first to say people should pay for digital news. It’s a dubious claim, even within his own company given that the WSJ’s subscription plans far predate News Corp.’s ownership — and that he initially promised to make WSJ.com completely free.

But he is passionate about it and about experimenting with it, investing $30 million in The Daily, the digital-only tabloid that launched on the iPad, implementing paywalls at the Times of London and Sunday Times, charging for apps, and earlier, selling Kindle subscriptions.

Why now?

Murdoch freely admits that he was the roadblock all along but it doesn’t sound like there was an “a ha moment” that changed his mind the split. His COO Chase Carey and CFO Dave DeVoe were among those internally who have pushed for the change, long urged by some investors and analysts. He told Cavuto, “They (Carey and DeVoe) look at the markets and I don’t — to the same extent. What brought me to it was after resisting … I’ve been 58 years building a company, gradually. …I realize the logic of it and how all the companies would be managed better, would be a lot better in every way.”

At CNBC, he added, “Frankly, I finally considered it, pros and cons. A couple of months, several weeks ago, I finally reached the conclusion I was right about it.”

It was time to change. The performance of other companies post-split helped sway him. “I think we’ve seen it at IAC … there’s now a Diller premium,” he joked with Faber. That’s a reference to a term — “Diller discount” or, in this case, a “Murdoch discount” — where the value of a company is depressed because of the majority shareholder’s control.

No, Britannia

Murdoch continues to resist linking the decision to the situation in England, when the uproar over phone hacking at the newspaper subsidiary dovetailed with efforts to buy the stake in BSkyB — and derailed it. News Corp. pulled the bid rather than face a regulatory decision on whether a company led by Rupert and James Murdoch was morally fit to own the pay TV operator, even after public apologies and the closing of the lucrative but damaged News of the World. Both were called to testify in various British proceedings and the fallout continues. Numerous ex-employees have been arrested.

But the events of the past year clearly soured him on investing much more in Britain. He first let loose with Cavuto (see the video clip at the top), telling him about BSkyB: “No, I think we have moved on in our own thinking from that. There were billions and billions of dollars and if Britain didn’t want them we have good places to put them here. I am much more bullish on America than I am about England.”

His repeated negative comments about investing in England plus his decision to be CEO of the larger company rather than the newspapers quickly led to conclusions that he was giving up on the papers there, too:

following @sdkstl on Murdoch. Unless I am reading it wrong it looks like the beginning of the end of the UK papers as Murdoch’s property

— emily bell (@emilybell) June 28, 2012

After listening to a few Murdoch variations, I think the message was aimed primarily at shutting down talk of a renewed BSkyB bid post split. But his attitude could come back to haunt. I also wouldn’t read Murdoch being chairman but not CEO of publishing as a sign that he’s pulling away.

But it is the pending end of an era.

@RupertMurdoch

One media outlet Murdoch has skipped so far: Twitter. The last time he tweeted out to his nearly 259,000 followers was June 24 and it was to scold Mitt Romney for his failures as a campaigner.

News Corp. spent $63 million on hacking-related costs in the quarter ending March 31; overall in the first nine months of fiscal 2012, costs related to the ongoing investigations dating back to the closure of The News of the World last summer have run to $167 million. In addition, the NotW closure plus some currency changes in Australia contributed to a $31 million drop in publishing revenue last quarter.

Compared with $8.4 billion in revenues for the quarter, up 2 percent over last year, and total operating income of $1.31 billion, up 23 percent over the same quarter in 2011, $200 million or so is enough to take earnings per share down a couple of cents but it’s not the kind of hit you might expect on a company being bombarded with negative publicity in a very public way.

Rupert Murdoch skipped the earnings call but COO Chase Carey took strong exception to some last week’s findings by the select Parliamentary committee exploring News International’s role in hacking. Carey said he and the board agree with some of the “hard truths” but not the “partisan” claim that Rupert Murdoch is unfit to lead a media company:

“He’s one of the smartest, more forward thinking executives of his time and the board and I reject any notion that he is unfit.”

Full earnings details in the release.

–

The report stopped short of accusing Rupert or James Murdoch of mis-leading the committee but accused the father of “turning a blind eye” to News Of The World’s phone hacking and the son of “astonishing” lack of curiosity in investigating it.

Here are the key players and what the report concluded about each:

Les Hinton

Ex-News International executive chairman. Ex-Dow Jones CEO (resigned, July 2011). Friend of Rupert Murdoch for 50+ years.

• “Les Hinton misled the Committee in 2009 regarding the extent of the pay-off to Clive Goodman and his own role in making it happen.”
• “Les Hinton was complicit in the cover-up at News International, which included making misleading statements and giving a misleading picture to this Committee.”
• “Les Hinton’s unwillingness to be explicit over the payment of legal fees was a deliberate effort to mislead the Committee over News International’s payments to Clive Goodman after he was charged and convicted.”

Tom Crone & Colin Myler

Crone: News Of The World’s ex-legal manager

Myler: News Of The World’s ex-editor (currently New York Daily News editor)

• “Both Tom Crone and Colin Myler deliberately avoided disclosing crucial information to the Committee and, when asked to do, answered questions falsely.”
• “Both Tom Crone and Colin Myler attempted to downplay the significance of the ‘for Neville’ e-mail and made no mention of the legal opinion that they had obtained (which suggested hacking was wider-spread). In itself this amounts to an attempt to mislead the Committee about the import of a crucial piece of evidence and the failure of the company to act upon it.
• “In 2009, Tom Crone and Colin Myler asserted that they had investigated the ‘for Neville’ e-mail and that there was no concrete evidence to support the allegation that journalists other than Clive Goodman had been involved in phone-hacking … They clearly did not tell truth to us then.”

James Murdoch

Ex-News International executive chairman

• “Surprising as it may seem that James Murdoch did not ask to see this crucial piece of evidence, nor the independent Counsel’s opinion, his lack of curiosity—but wilful ignorance even—subsequently is more astonishing.”
• “We are astonished that James Murdoch did not seek more information or ask to see the evidence and counsel’s opinion when he was briefed by Tom Crone and Colin Myler on the Gordon Taylor case. Even for a large company, £700,000 is a not inconsequential sum of money, and it is extraordinary that the Chief Executive should authorise its payment on the basis of such scant information. If he did, indeed, not ask to see either document, particularly the counsel’s opinion, this clearly raises questions of competence on the part of News International’s then Chairman and Chief Executive.”
• “If he did not read the e-mail chain, there is no good excuse for this and it betrays an astonishing lack of curiosity on the part of a Chief Executive.”
• “It was as late as December 2010 that James Murdoch—and Rupert Murdoch—realised that the one ‘rogue reporter’ line was untrue. This, we consider, to be simply astonishing.”

Rupert Murdoch

CEO and chairman, News Corp

• “Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications.”
• “This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.”
• “Rupert Murdoch told this Committee that his alleged lack of oversight of News International and the News of the World was due to it being “less than 1% of our company”. This self-portrayal, however, as a hands-off proprietor is entirely at odds with numerous other accounts, including those of previous editors and from Rebekah Brooks, who told us she spoke to Rupert Murdoch regularly and ‘on average, every other day’. It was, indeed, we consider, a misleading account of his involvement and influence with his newspapers.”

Rebekah Brooks

Ex-editor, The Sun & ex-CEO, News International

• “None of these scenarios casts Rebekah Brooks … in a positive light: either they should have been more frank or else they should have been better informed.”
• “For those actions, and the culture which permitted them, the Editor should accept responsibility.”

News International

• The company “wished to buy silence in this affair and to pay to make this problem go away”.
• “News International repeatedly made misleading and exaggerated claims regarding the ‘investigations’ it had purportedly commissioned following the arrests of Clive Goodman and Glenn Mulcaire.”
• “Senior executives at News International undoubtedly extolled the thoroughness of the reviews rather too fervently.”
• “Evidence given by News International executives (until August 2011) had been vague and at times incomplete.”

News Corporation

• “The whole affair demonstrates huge failings of corporate governance at the company and its parent, News Corporation.”

His interrogator Robert Jay was careful, almost ginger at times as he tried to get at News Corps.’ transgressions, perceived, real or accused, and the patriarch’s role. (As a viewer, I occasionally wanted to yell “just pull off the scab; don’t pick at it.”) Jay also has a penchant for assuming and assigning intent or feelings.

Murdoch, whose son James doesn’t have nearly the range, was alternately straightforward, passionate, defensive, assertive, irked, and a tad bemused. Expecting an octogenarian Darth Vader? Murdoch competitor the New York Times picked up last summer’s cartoon comparison: “engagingly modest, self-deprecating, charming and funny, a balding, bespectacled Mr. Magoo lookalike.”

Murdoch is a charming guy. He can be shy in a crowd and instantly authoritative. He’s clearly having fun with his direct-to-consumer Twitter feed — using it for jabs and comments he wants heard but then turning dismissive when people listen. Take this exchange with Jay to open the festivities Wednesday:

Q. Some recent tweets of yours betray a hostile approach to right wingers and toffs. Who were you referring to?

A. That was rather a load — don’t take my tweets too seriously. I think I was really saying that the extremists on both sides were piling in on me.

Twitter is public but it isn’t under oath. Everything Murdoch said on the stand, as well as any written statements, could be actionable if Lord Justice Leveson or others think he has lied. He quickly came under fire from outside the Inquiry, which was convened by Prime Minister David Cameron — with former Prime Minister Gordon Brown in the lead.

At the same time, Murdoch came off — to me, at least — as genuinely sincere in his regrets over phone hacking, particularly the hacking of young murder victim Milly Dowler’s cellphone — although he also took time to mention that some of the Dowler allegations were inaccurate and to try to shield his son James and protege Rebekah Brooks.

He channeled a little early Ali:

I should have gone there and thrown all the damn lawyers out of the place and seen Mr Goodman one-on-one — he’d been an employee for a long time — and cross-examined him myself and made up my mind, maybe rightly, maybe wrongly: was he telling the truth? And if I had come to the conclusion that he was telling the truth, I would have torn the place apart and we wouldn’t be here today. I’m talking 2007. But that’s hindsight, which, of course, is a lot easier than foresight …

And he channeled his inner conspiracist, claiming that unidentified people at now-defunct News of the World deliberately blocked senior News Intl. execs — most notably people named Brooks and Murdoch –from learning that hacking wasn’t the work of Clive Goodman alone:

… There’s no question in my mind that maybe even the editor, but certainly beyond that someone took charge of a cover-up, which we were victim to.

Jay parried, suggesting Murdoch and News Corp. were the ones covering up.

Q. Some might say that all this picture is consistent with one of a desire to cover up rather than a desire to expose. Would you agree with that?

A. Well, people with minds like yours, yes, perhaps.

That clever riposte almost got him into trouble and he quickly walked it back.

LORD JUSTICE LEVESON: Oh, oh.

A. I’m sorry, I take that back. Excuse me.

MR JAY: I’m very thick skinned, Mr Murdoch.

A. You seem to be.

Q. Do not worry one moment.

But Murdoch should be worried about it all.

He is unlikely to face any personal legal jeopardy — he was careful. Brooks already does and James Murdoch might yet. But the hits are going to keep coming. He can be called again, he may face inquiries in the U.S. and the Murdochs and News Corp. are likely to be singed by the Leveson report.

His reputation has taken a huge hit – over hacking and the fallout but also because of his machinations to deny being a powerbroker and the unveiling of the UK version of the smoke-filled room.

This round of testimony is over. The story is not. (The transcript is here.)

News Corp. Chief Digital Officer and Chairman/CEO, Digital Media Group Jon Miller will be appearing at paidContent 2012, May 23 in New York City.

Lord Justice Leveson was appointed by Prime Minister David Cameron to head the inquiry after last summer’s revelations of phone hacking led to News Corp.’s closure of News of the World, more allegations, and Parliamentary hearings that raised serious questions about interactions between the press and the government.

Since then, Scotland Yard has made numerous arrests, including Rebekah Brooks, the former News International head who was second only to James Murdoch in the company’s UK hierarchy — but the Murdochs have remained largely unscathed in terms of legal action. Not so on the economic side: News Corp. had to quit its bid for full ownership of BSkyB and James Murdoch has resigned from numerous boards, including his chairmanship of the satellite operator.

Cameron’s behavior — and his own cabinet, particularly Culture Secretary Jeremy Hunt — became a centerpiece of Tuesday’s hearing as the inquiry drilled into the controversial bid for BSkyB and struck oil. It was one of the most stunning behind-the-scenes views of government influence the UK has seen.

Quite the stage for Rupert Murdoch’s appearance.

Here’s a Storify to bring you up to speed:

James Murdoch faces the Leveson Inquiry (but will he remember it?)

James Murdoch kicked off Murdoch week at the Leveson Inquiry Tuesday — and managed to put someone else’s behavior in the spotlight,

Storified by Staci D Kramer · Wed, Apr 25 2012 01:13:26

Ahead of a parliamentary report on phone hacking that reportedly may accuse him of “lying”, now he is resigning his chairmanship of the UK’s largest pay-TV operator, BSkyB, saying:

“As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined.

“I am aware that my role as Chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organisation” (announcement).

Director Nicholas Ferguson will take his place, deputised by News International CEO Tom Mockridge. Murdoch remains a non-executive director.

In November, BSkyB’s board unanimously recommended Murdoch’s re-election, which was achieved with only a fifth of shareholders voting against him.

But that was before communications regulator Ofcom this year stepped up an inquiry in to whether News Corp, which owns 39 percent of BSkyB and which last year proposed buying the rest, is a “fit and proper” owner in light of the hacking episode. And it was before further hacking revelations came to light…

The House Of Commons’ Culture, Media & Sport select committee has been examining the phone hacking issue. Appearing before it, Murdoch repeatedly and strongly denied former News International executives’ testimony that they had made him aware of the full extent of allegations.

But, in an embarrassing further submission, Murdoch told the committee he now recalled that he had indeed been made aware, via a weekend email that he did not fully act upon when he returned to the office later that week. Newspapers have since reported how company executives had commissioned a cover-up involving the deletion of emails.

The parliamentary committee appears to have two options for conclusion – either that Murdoch executed his corporate responsibilities sloppily or that he wilfully misled parliament. The first option has serious repercussions for Murdoch’s corporate career; the second could lead to a criminal investigation.

Which way will MPs go? ”There are some on the committee who want to use the word ‘lie’,” Adam Boulton, the well-connected politics editor of BSkyB’s own Sky News, reported on Tuesday, explaining that there is disagreement amongst committee MPs.

What happens next? The parliamentary committee did not publish its report in to phone hacking as it hoped to ahead of parliament’s Easter recess, which started March 27. Now the MPs, who may be deciding Murdoch’s fate during their Easter holidays, will likely publish after parliament’s April 16 return.

In a March letter to the committee that may have been his final opportunity to convince it, Murdoch conceded he should have asked more questions of his News International executives but again blamed “false assurances” given by them.

• Rupert and James were re-elected at News Corp in October’s AGM.
• BSkyB’s board re-elected James Murdoch as chair in November, though a fifth of shareholders voted against him.
• But he resigned from the boards of News International’s Sun and Times papers.
• Then he quit GlaxkoSmithKline’s board.
• In February he resigned his chairmanship of News International itself.
• He also quit the boards of Newscorp Investments and News International Publishers Ltd, two more UK units.
• And he resigned from auction house Sotheby’s board in March.

Upon being severed from News International, Murdoch was also distanced geographically from the epicenter. He was moved to New York full-time, where News Corp said he would remain News Corp group deputy COO and CEO of News Corp’s international activities to focus on its international TV business.

But BSkyB, which Murdoch once led as CEO, is one of the most significant parts of that business.

The whole issue is now so toxic that even lancing this boil is unlikely to make the prospect of News Corp returning to a successful buy-out of BSkyB any more likely. Perhaps in place of that opportunity, BSkyB on Tuesday confirmed an earlier plan to buy back a big tranche of shares.

But Murdoch’s exit from yet another News Corp property should soothe concerns that he may even have brought BSkyB down. BSkyB shares fell immediately following the announcement, however.

For two weeks, the British newspaper The Guardian (disclosure: until a month ago, we were owned by Guardian News & Media) has been beating the drum about the Foreign Corrupt Practices Act, a 1977 law that makes it illegal for U.S.-based companies and executives to obtain business by bribing foreign officials.

Earlier this month, Reuters (NYSE: TRI) reported that U.S. officials had opened an investigation into whether the News Corp scandal involves FCPA violations. Even though the story noted there is no evidence of U.S. phone-hacking, the Guardian has raised the spectre of its rival being paraded before American justice.

Media pundit Michael Wolff, for instance, yesterday opened a piece by noting the obvious — that the FCPA is not designed for events like the UK hacking scandal. But Wolff nonetheless embarked on a speculative tour de force of how the FCPA could technically apply and how Team Murdoch is rejigging its legal strategy to fight off the Americans. He concludes by egging on the U.S. feds.

Give me a break. Attempting to prosecute part of the UK media establishment would be a bridge too far, even for a Justice Department that has acquired a reputation for over-zealous and politicized FCPA investigations.

Consider that the FCPA exists because some countries are unwilling or unable to stop corruption themselves. The UK, whose rule of law principles inform America’s own legal system, is not one of those countries.

There are also the diplomatic implications of usurping the UK’s legal powers at a time when many Brits are outraged over a one-sided extradition treaty that the country signed with U.S. after 9/11. While the Obama administration would no doubt love to put the screws to the owner of Fox (NSDQ: NWS) News, it’s hard to see how a full-blown FCPA prosection would not be perceived as a humiliating suggestion that the UK can’t handle its own affairs.

Americans too might be put off by a costly and unnecessary investigation. In a worthy overview of the law and politics of the FCPA, Reuters’ Alison Frankel nails it as follows:

As a journalist, I’m horrified that News Corp may have paid the police for tips. If I were a British taxpayer, I’d be irate that cops and Defense Ministry officials allegedly took the bribes. I’d be at the head of the line calling for a full investigation and harsh penalties for anyone who broke the law.

But as a U.S. taxpayer, I’d rather the Justice Department spent my money investigating, say, mortgage-backed securitization than whether British journalists bribed British police officials for tips on British news stories. In an age of limited resources, I’m not convinced that our government should be bending and twisting the FCPA to make a case against News Corp. however sexy and high-profile that case would be.

The situation would be very different if Wall Street Journal reporters in the U.S. used bribing and hacking to get their stories. But there isn’t a shred of evidence this happened.

As for Wolff’s claim that News Corp.’s legal strategy is being shaped by the FCPA, the company may indeed be wary of being forced to pay the Justice Department to go away (in a piece titled “Bribery Racket,” Forbes suggested FCPA officials launched prosecutions for personal gain). But for now, News Corp.’s lawyers are likely more preoccupied with the ongoing turmoil in the UK — like James Murdoch’s resignation and the Leveson Inquiry.

For now, no amount of media-induced smoke will light a FCPA fire under News Corp.

But, though Murdoch will no longer influence the operation, the issue of personnel may now be a side show to a more pertinent question: is anyone in control of the destinies of The Sun and The Times anyway?

Many will say any move which gives News Corp COO and president Chase Carey more direct auspice over News International suggests a possible winding down of the seeds Rupert sowed. Carey is a TV and movie advocate within the group, and Bloomberg quotes him as saying “there certainly is an awareness” News Corp.’s shares would trade higher without newspapers.

But no-one out there would buy News International assets until its toxic phone hacking and media ethics stink has passed. All that has more time to run and shows every sign of getting worse and worse, now perhaps unstoppably bad.

Rupert Murdoch’s arrival in London to launch Sun On Sunday may have filled the commercial gap left by News Of The World‘s absence, and the launch itself may have proved useful as a position statement on what News Corp says is a reformed News Group Newspapers; a scorched earth tactic.

But, thanks to the Metropolitan Police chief’s revelation last week that The Sun ran a network of corrupt police officers, it is now that very paper which is about to be dragged through the mud backward. Can a Sun which News International says is now clean and new survive prosecutions for practices that are dirty and old? Rupert may yet rue throwing his weight behind the title, one last roll of the dice, ahead of these investigations. This summer, who would bet against The Sun setting like it did on its deceased Sunday stablemate?

After The Sun, what’s left? The Times is a respected newspaper with a strong heritage, but is supported by Sun profits and cannot survive without adjacent supporting revenue or without getting ship-shape toward breakeven by itself. This may have been the logic behind charging for Times digital products. Only the likes of Russian or Middle Eastern oligarchs nowadays snap up loss-making newspapers as trophies.

What is left in consumer news publishing anymore for anyone anyway? That may be Carey’s mindset. With the old print business now fast drying up, it is no longer a great business to be in.

The Times‘ digital strategy, which has been executed well and produced quality products for a small, wealthy audience, appears defensive more than expansive for the wide-open web.

Online, The Sun makes plenty of money from its Sun Bingo gaming site, but, in content, it’s hard to draw a logical line by which its millions of daily print readers migrate to its digital manifestations.

While The Times‘ digital strategy is now mostly supported by iPad, whose owners are still self-selectingly attractive demographic for high-end advertisers, it may be some time before they filter out in to the mass market in a way that can support a Sun migration.

Former Scottish Sun editor Jack Irvine told Sky News: “it seems pretty clear to me that Rupert is now back in charge in Britain. Rupert is still in love with newsprint.”

Another former News Corp footsolder agrees News International is safe. “I’m sure the newspapers will survive,” ex BSkyB (NYSE: BSY) programmes head David Elstein told Sky News on Wednesday, adding that James Murdoch should also leave BSkyB’s board to distance the satcaster from the scandals.

“I’m confident that, at the end of this process, the newspapers will be fine, but there is a long process to be gone through.”

The announcement (below) comes from News Corp’s New York HQ (from where he will now work) and not News International’s in London, says Murdoch has “relinquished” his position, and leaves leadership of the unit to News International CEO Tom Mockridge, who, unlike Murdoch, was not in place during the scandal.

Murdoch remains News Corp group deputy COO. His father Rupert says James will now focus only on News Corp’s international pay-TV businesses, which he previously led before climbing the News Corp ranks. In fact, News Corp confirms to paidContent he retains his role as “CEO” of News Corp’s international business – a title the announcement does not refer to.

In essence, Murdoch is being distanced from News Corp’s most toxic asset. Through evidence to the UK parliament’s media select committee in to whether it was misled on phone hacking, as well as evidence heard at Lord Leveson’s public inquiry, he has looked increasingly vulnerable…

He had repeatedly told the committee his footsoldiers had not made him aware of the extent of phone hacking, before later recalling that he had indeed received a weekend email about it which he did not fully act upon. Last week, court documents revealed that News International deleted emails to cover up the scandal, emails which were later discovered.

The scandal has also now spread from just News Of The World to News International’s main Sun title, which London’s Metropolitan Police chief last week said ran a network of corrupt police officers.

The select committee is due to report before parliament’s easter recess (March 27 to April 26), committee member Therese Coffey told Sky News: “This wasn’t unexpected, the timing was a surprise. If James Murdoch had taken this a bit more seriously, he wouldn’t be having to make this move now.”

Committee chair John Whittingdale told Sky News: “He was running the company at the time when a lot of these payments (to phone hacking victims) were being made. If News Corp wanted to start afresh, his presence was always going to be a problem for them.”

If News Corp ever wants to return to its proposed, postponed buy-out of BSkyB, it may need to pass the regulator Ofcom’s “fit and proper persons” test. James Murdoch’s ongoing place atop News Corp’s international TV business means that test could still be applied to him.

Announcement follows…

JAMES MURDOCH STEPS *DOWN* AS EXECUTIVE CHAIRMAN, NEWS INTERNATIONAL TO FOCUS ON EXPANDING INTERNATIONAL TV BUSINESSES
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New York, NY February 29, 2012 – News Corporation today announced that, following his relocation to the Company’s headquarters in New York, James Murdoch, Deputy Chief Operating Officer, has relinquished his position as Executive Chairman of News International, its UK publishing unit. Tom Mockridge, Chief Executive Officer of News International, will continue in his post and will report to News Corporation President and COO Chase Carey.

“We are all grateful for James’ leadership at News International and across Europe and Asia, where he has made lasting contributions to the group’s strategy in paid digital content and its efforts to improve and enhance governance programs,” said Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation (NSDQ: NWS). “He has demonstrated leadership and continues to create great value at Star TV, Sky Deutschland, Sky Italia, and BSkyB (NYSE: BSY). Now that he has moved to New York, James will continue to assume a variety of essential corporate leadership mandates, with particular focus on important pay-TV businesses and broader international operations.”

“I deeply appreciate the dedication of my many talented colleagues at News International who work tirelessly to inform the public and am confident about the tremendous momentum we have achieved under the leadership of my father and Tom Mockridge,” said James Murdoch. “With the successful launch of The Sun on Sunday and new business practices in place across all titles, News International is now in a strong position to build on its successes in the future. As Deputy Chief Operating Officer, I look forward to expanding my commitment to News Corporation’s international television businesses and other key initiatives across the Company.”