Middle East offers Rupert Murdoch hope

As Rupert Murdoch struggles to defend his empire in the wake of the phone hacking scandal, one man has stood firm in his support for the media mogul.Accusations that celebrities, politicians and families of the victims of the September 11 attacks in the US - and even a murdered British schoolgirl - had their voicemail messages illegally intercepted by journalists have led to widespread criticism of Mr Murdoch's News Corp.But during the unfolding scandal, the Saudi billionaire Prince Al Waleed bin Talal, who is the second-biggest shareholder in the company, has been unwavering in support for his long-standing friend.In a difficult period for the global media and entertainment group, Mr Murdoch has witnessed the arrest of several former staff members and suffered a physical attack in the British parliament by a protester.This week it emerged thatClive Goodman, the former royal editor of the News of the World, had warned that illegal eavesdropping was rife at the newspaper. Mr Goodman, who was jailed in January 2007 for phone hacking, claimed in a letter sent to the human resources director at the newspaper's parent company that hacking was carried out with "the full knowledge and support" of the paper's leadership. Mr Murdoch's son, James, who runs News Corp's operations in Europe and Asia, may be recalled by Britain's parliament to answer further questions about the affair.Yet despite these upheavals, Prince Alwaleed, who owns 7 per cent of News Corp's voting shares, said he remained committed to the company as a "long-term investment". The prince publicly backed Rupert and James Murdoch's handling of the crisis, and said there was no need to change the dual-class share structure of the company that gives the Murdoch family disproportionate voting rights.Given the strong relationship between Rupert Murdoch and Prince Al Waleed, media commentators say the Middle East is likely to be of special interest to News Corp as it looks to recover from the phone hacking crisis."I think it is an opportunity for News Corp to expand in the Middle East," says Ali Jaber, the dean of the Mohammed bin Rashid School for Communication at the American University of Dubai.In the fall-out of the scandal, News Corp was forced to drop its proposed takeover of the British broadcaster BSkyB. But Mr Jaber believes the company will now have to look elsewhere for revenue growth."The Arab world is still the only area that has money in it, and the media is still thriving here," he says. "People are still investing in setting up new television channels and new newspapers, which is something that cannot be said in other markets in the western world."In an illustration of the close ties between Prince Al Waleed and Mr Murdoch, News Corp bought a stake in the Saudi tycoon's media company Rotana. In May, Mr Murdoch boosted this stake to 14.53 per cent and has until November next year to exercise an option to increase the company's holdings to 18.2 per cent.News Corps presence in the Gulf has been growing in the past few years. BSkyB, in which News Corp owns a 39.1 per cent stake, plans to launch an Arabic version of Sky News in Abu Dhabi next year. From / The National