News Corp. Plans Sunday Edition of Sun Tabloid

News Corp.’s Rupert Murdoch, whose U.K. papers have been beset with police and government investigations into phone hacking and bribery, will start a new tabloid to replace the disgraced News of the World.

Murdoch announced the plans for a Sunday edition of the Sun tabloid at a meeting with journalists in London today. The staff had requested an audience with the 80-year-old after a second round of arrests a week ago into bribery sparked outrage among journalists at Britain’s best-selling daily newspaper.

“We will build on The Sun’s proud heritage by launching The Sun on Sunday very soon,” Murdoch said today in a memo, obtained by Bloomberg News. “ Having a winning paper is the best answer to our critics. I am even more determined to see The Sun continue to fight for its readers and its beliefs.”

The plan for a new Sunday tabloid was unveiled before legislators publish a report about why News Corp. (NWSA) executives didn’t stop illegal activities at the British tabloids. The News of the World was shut in July after reporters were found to have hacked into the voicemails of politicians, celebrities and murdered teenager Milly Dowler to get information for tabloid stories.

The company’s Management and Standards Committee, formed by New York-based News Corp. to assist police in their investigations of phone-hacking and bribery, has said it handed over information to aid three police inquiries into bribery, phone hacking and computer hacking. Trevor Kavanagh, associate Sun editor, had called the arrests of journalists a “witch hunt.”

News Corp. shares rose 2.1 percent to $19.40 as of 11:59 a.m. in New York trading.

‘Just Cynical’

The closing of the News of the World was “just cynical,” Chris Bryant, a lawmaker from the opposition Labour Party, who had sued the News or the World over phone-tapping, said in a comment on the Twitter microblogging service.

Tom Watson, the lawmaker in the British Parliament who is helping prepare the report that is expected to be critical of News Corp. executives, said “this will not draw a line under the crisis faced by News Corp. in the U.K.”

Marc Mendoza, chief executive officer of the Media Planning Group, which places ads in U.K. newspapers, says Murdoch’s plans show he’s defying conventional rules.

‘Bring It On’

“It would be a brave move,” Mendoza said. Murdoch is saying, “OK you’ve arrested these journalists, now we’re going to print seven days a week instead of six. Bring it on.”

Murdoch said today that while the company would continue to aid investigations into the newsroom, he would work to protect reporters. The ten Sun journalists suspended from their jobs following their arrests tied to the police investigation into bribery will be allowed to return and can continue to work unless they are charged with a crime, he said. News Corp. will also cover legal expenses for accused reporters until they are convicted.

“Everyone is innocent unless proven otherwise,” Murdoch said in the memo sent to reporters. “We will continue to ensure that all appropriate steps are taken to protect legitimate journalistic privilege and sources, which I know are essential for all of you to do your jobs.”

Murdoch told employees that he will stay in London for the next several weeks to give staff his “unwavering support.” The MSC estimates that at least 100,000 pounds ($158,000) was paid to public officials in the last several years, according to a person with knowledge of the investigation.

His allegiance to the tabloid, which Murdoch has run for more than 40 years, may alienate other parts of the company, which see the newspapers as a source of unnecessary controversy, author Michael Wolff said in an interview on Bloomberg Television.

‘Off The Reservation’

“Rupert is off the reservation,” said Wolff, an editor at Vanity Fair and the author of a book on Murdoch. “The company is both defending the newspaper and prosecuting a newspaper in a real way.”

Murdoch formed the MSC to begin digging through his employees’ pasts after the 168-year-old News of the World was shut down. The investigation ultimately widened beyond the News of the World to News Corp.’s other U.K. titles including the Sun and the Times. The Times is being investigated by police over possible computer hacking by a reporter.

‘Evidence’

Following the News of the World closing, Murdoch and his son James, the former chairman of the U.K. News International publishing unit and now deputy chief operating officer of News Corp., had to appear before Parliament to explain how much they knew. U.K. Prime Minister David Cameron sponsored another inquisition, led by Judge Brian Leveson, into press ethics that is ongoing and may lead to new rules to discipline the media.

James Murdoch didn’t fly to London this week with his father as he had other commitments, said a person familiar with the matter.

Sun journalists were treated like members of an “organized crime gang,” Kavanagh said this week. The National Union of Journalists has spoken to lawyers about challenging the MSC’s activities. The committee has interviewed employees and searched through e-mails and the use of private detectives, looking for signs of corruption, two people familiar with the investigation said in October.

“We cannot protect people who have paid public officials. We will turn over every piece of evidence we find -- not just because we are obligated to but because it is the right thing to do,” Murdoch said today. At the same time, “we are doing everything we can to assist those who were arrested.”

To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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