Ofcom scrutiny raises stakes for investors Asked by Robert Jay, counsel to the Leveson inquiry, whether he ever told his newspaper editors to pursue stories which promoted his other business interests, Rupert Murdoch was quick with his reply: "I don't have any other business interests." The remark might have surprised investors in News Corp, a $48bn collection of television channels and satellite broadcasters in which newspapers now play a marginal financial role. Print went from 90 per cent of News Corp's operating income in 1980 to 11 per cent in 2010. It was one exchange in a morning of back-and-forth that left Mr Murdoch looking tired and testy. But behind the theatre lay serious questions about the impact of this week's revelations on far bigger business interests than Fleet Street's disgraced tabloids. Mr Murdoch budged little from News Corp's defence that he and senior executives had been kept in the dark by underlings within the News of the World when they maintained for years that corrupt practices in its UK newspapers went no further than a rogue reporter. Some lines still sounded like startling admissions for a company chairman to make. He shut the Sunday tabloid because he "panicked," he said. His son James had been "pretty inexperienced" when he signed a record settlement with one hacking victim. Mr Murdoch also admitted he had "failed" to get to the bottom of the scandal. The saga was a lasting blot on his reputation, he said, agreeing that reputation was a vital commercial asset. Within hours, however, the risk of damage far beyond a tarnished reputation was highlighted by news that Ofcom had escalated a probe into whether British Sky Broadcasting - and officers and owners including James Murdoch and News Corp - were "fit and proper" holders of UK broadcasting licences. At worst, the regulator could force News Corp to sell all or part of its 39.1 per cent stake in the satellite broadcaster, now worth more than $7bn. Yet News Corp's stock, perhaps helped by a $5bn buyback programme, barely moved. BSkyB, its share price down 8.4 per cent in the last six months, slipped only slightly. "Our view is that direct evidence of criminal culpability at News Corp is likely to be difficult to prove one way or another in terms of whether Sky is fit and proper," said Tom Singlehurst, a Citigroup analyst, describing it as somewhat insulated by James Murdoch stepping down as BSkyB chairman. Investors were likely to worry about a possible "overhang" of News Corp's BSkyB stock, he said, but "all this really tells you now is that Ofcom is being thorough. What is interesting is the indifference of the financial markets. Chris Goodall, an analyst at Enders Analysis, was also surprised the market seemed so "unfazed" by what could be "a threat to the Murdoch control of BSkyB." James Murdoch's testimony could also complicate any hope News Corp has of making another bid for full control of BSkyB, after the scandal killed its previous $12bn approach. After the heat he drew to Jeremy Hunt, culture secretary, ministers will be highly reluctant to handle any repeat bid. Asked whether he agreed that maintaining ethical standards in newspapers cost money, Mr Murdoch told the Leveson inquiry any cost was "peanuts" compared with the "hundreds of millions" News Corp has spent dealing with recent scandals. Should the phone-hacking fallout end up costing him BSkyB, shareholders would be left with a much bigger bill. Additional reporting by Salamander Davoudi