[Nina Dos Santos, Cnn International:] Howling at the "Sun." A union leader tells me that Rupert Murdoch has thrown his staff to the wolves. Lone Wulff. Germany's president resigns, leaving Merkel in the lurch. And sheep's clothing? Not a chance. We're on the hunt for real growth potential at the London Fashion Week. Hi, there. I'm Nina Dos Santos in for Richard Quest, and this is QUEST MEANS BUSINESS. Good evening. Rupert Murdoch has told his staff at the "Sun," the boss is on your side. "Sun" journalists had feared a witch hunt against the paper or even plans to close it altogether after several members of staff were arrested. And now, Murdoch says that News Corp will do everything it can to try and help those being questioned over suspected illegal payments. That includes lifting their company suspensions and paying their legal fees, as well. And for those who feared that the "Sun" would go the same was as the "News of the World," well, Rupert Murdoch says that he'll actually be expanding his empire, launching a new "Sun on Sunday," quote, as you can see here, "very, very soon" to replace the tabloid that he cut during last year's phone-hacking scandal. Our senior international correspondent Dan Rivers is actually outside the News International headquarters in Wapping, East London right now. Dan, how palatable has the anger been throughout the course of the day?
[Dan Rivers, Cnn Senior International Correspondent:] Well, to be honest, I think there's probably a sense of relief, because the more dire speculation before he turned up was that there was a possibility he may just go, "Look, I'm going to get rid of all my UK newspaper holdings altogether," or possibly close the "Sun." He's not done that. In fact, he's done the exact reverse, which is expand the "Sun" into the Sunday market to replace the "News of the World." So, there will be relief that those jobs will effectively come back into the News International stable. Also, he announced that those journalists that had been arrested who had been suspended by the company pending the police investigation, that suspension is now lifted. He said they're innocent until proven guilty and they can come back to their jobs. And that will go a long way, I am sure, to help those members of staff who feel that they've been sort of hung out to dry by management and that they're not getting the backing they want. What hasn't been addressed, I suppose, in some sense, is the idea or the feeling that they have had their journalistic sources compromised, that sensitive contacts have been handed over to the police by the management at News International. But basically, Rupert Murdoch sets out very clearly in a letter and to staff that we've got to cooperate with the police, we've got to follow this through properly, and that's exactly what we're doing, and we cannot tolerate any kind of illegality at the paper. So, certainly we've been seeing a few of the "Sun" journalists in the pub around the corner, here. They look like they were a bit more relaxed, and we'll have to see how it plays out over the coming week, whether there are any more of these angry columns in the paper criticizing management of News International. But so far, I think everyone is now very firmly focused on a new Sunday edition of the "Sun," which they say will come out soon.
[Dos Santos:] Ah, now Dan, that brings me to our next question, because skeptics would say that he was planning on launching the "Sun on Sunday" anyway.
[Rivers:] Well, they had. I remember being here when the "News of the World" got shut down amid the phone-hacking scandal, and they were already speculating then that they had registered the domain name of the "Sun on Sunday," that they were already planning it. This was all part of a wider strategy that had been put in place by Rupert Murdoch. The key thing with all this, I think, Nina, is that the advertisers have not deserted the "Sun" in the same way that they had deserted the "News of the World." And ultimately what precipitated the decision to shut down the "News of the World" was that the advertisers were walking out in droves and that that brand had become totally toxic for advertisers and it wasn't a commercial proposition anymore. The same has not happened with the "Sun" so far, and they feel that the "Sun" has weathered this storm so far, despite nine journalists being arrested. Therefore, they feel, perhaps, that they can move into that Sunday market without advertisers leaving them in droves.
[Dos Santos:] Dan, even if the advertisers aren't leaving the "Sun" in droves, the sources may well be. It may be just a question of them having compromised their sources too much that they're not going to bring them stories anymore.
[Rivers:] Well, it certainly you certainly, if you were a potential source with a good story to tell, you're going to certainly think twice, aren't you, about talking to a journalist from News International, given what's going on at the moment? Given that the police are coming through three million e-mails looking for evidence of the "Sun" and other papers having paid public officials. The police are putting it like this. They're saying, off the record, this is not a question of buying police officers a lunch or buying them a few drinks. It's a question of systemic bribery involving tens of thousands of dollars, almost like the police and public officials were on retainers with the newspaper. And I think that's the kind of thing that they're trying to target. Of course they're not trying to discourage from going out and doing their job, talking to people and getting genuine stories. But from the police's point of view, what they're trying to do is to stop police officers supplementing their income in a major way from a newspaper and therefore, of course, compromising their position as public servants.
[Dos Santos:] All right, Dan Rivers, our man on then scene outside News International headquarters in East London. Many thanks for that. Now, the head of Britain's biggest journalist union says that Murdoch's announcement will do nothing to calm the staff at News International. Michelle Stanistreet has been speaking to me, and she's been saying that they've been thrown to the wolves by Murdoch to protect his favorites inside News Corp. I asked her earlier today if the situation was now beyond repair.
[Michelle Stanistreet, General Secretary, National Union Of Journalists:] It's hard to see where the company goes from here. I think if Rupert Murdoch had announced today that actually acknowledged that actually they'd made a mistake, that they're handling this situation wrongly, that they've let people down, that he was going to call off the management and standards committee and prevent them from carrying out their business in the manner in which they've been doing so, I think there could've been an opportunity to defuse the anger and the sense of betrayal felt at Wapping. He's deliberately chosen not to do that today. So whilst he's saying he shares their great pain, he's not doing anything about making them feel better, and I think that sends a very strong message in itself.
[Dos Santos:] From a business and employment perspective, though, how comforted are you by the fact that they're going to be opening up the "Sun on Sunday"? Presumably, that'll keep more people in jobs.
[Stanistreet:] Well, the announcement today is obviously, again, very deliberately times and is intended, no doubt, to act as a bit of a sop to journalists on the titles to ensure them that there is a future there for the titles and that there's forthcoming investment into a new edition. But of course, this is no surprise that the "Sun on Sunday" was going to launch. They were planning this in the run-up to the closure of the "News of the World" and even in the immediate days following the closure of that newspaper title. Yet, all of those workers, all of those journalists and members of staff who worked on the "News of the World" were cynically betrayed and offered up, again, another act of corporate and self-preservation. At that time and they lost their jobs and their livelihoods. It will be precious little comfort to them that there's now going to be a new edition of the "Sun" at Wapping.
[Dos Santos:] What's particularly interesting about the way how Rupert Murdoch and his family run his business is that number of the top executives there often treated like family. Is what we're seeing, to a certain extent, a breakdown of that Murdoch family-like management style? And also, where does it take us from here?
[Stanistreet:] Well, I think what we've seen over the last year or so, and certainly since the hacking scandal exploded, is Rupert's put his own immediate family, his son, and those executives who are like children to him foremost in everything that he's done since, and the future, the very future of that family's role with in News Corp and the future of the business. He's made it perfectly clear where is loyalty and his feelings lie, and every action and every step that's been taken in the months since then, he's thrown out thrown the journalists to the wolves. He sought to defend those at the top whatever the means and to try and assuage, whether it's the American investors or whether it's public opinion, with a few scalps of individual journalists. He's tried consistently to pin the blame on those lower down the tree within News International and to try and defend and sustain the reputation and the future of those right at the top. It's been a consistent corporate strategy, and we're seeing it again this week.
[Dos Santos:] Well, from arriving under a cloud of scandal to leaving under a cloud of scandal. We'll be taking a look at why the German president, Christian Wulff, says he can't go on. Stay with us.