Will Rupert Murdoch's woes cross the Atlantic?

Media mogul Rupert Murdoch, now at the center of an unfolding scandal in the United Kingdom, may soon find that the tremors threatening his life’s work extend far beyond Scotland Yard.

If angry shareholders have their way, the allegations of illegal phone hacking and corporate corruption that closed the 168-year-old News of the World, in London, will mark the beginning of a wide-reaching reckoning for the Australian business tycoon.

In a lawsuit filed Monday in Delaware, a coalition of institutional investors alleged, among numerous complaints, "These revelations show a culture run amuck within News Corp. and a board that provides no effective review or oversight."

Criminal charges are mounting overseas, and additional revelations were being issued from Scotland Yard throughout the day Monday. Major business deals, such as a proposed $14 billion satellite firm acquisition, are faltering. How much trouble does this mean for the powerful media empire?

“It’s maybe a bit too early to know if this is the first domino that will lead to the collapse of the whole structure,” says Robert Thompson, founder of the Bleier Center of Television and Popular Culture at Syracuse University in New York. But if it did play out that way, he says, “there would be a symbolic symmetry to it, because the News of the World was the first newspaper [Mr. Murdoch] bought when he began his media empire.”

How widespread is the damage?

Longtime News Corp. observer Richard Levick says the writing is on the global wall. “This is no Watergate,” says the president of Levick Strategic Communications, a firm that specializes in crisis management. “This is another Enron."

Mr. Levick notes the longevity and breadth of the charges to date, which he says permeate the entire company. “These span years and involve thousands of people,” he says, adding that Monday’s lawsuit in US court is just the beginning of a response on this side of the Atlantic.

Some speculate that the UK charges may spur a Department of Justice investigation under the Foreign Corrupt Practices Act.

In civil court, the lawsuit filed Monday alleges loss of company value due to mismanagement. In addition, the intangible damage to American journalism should not be overlooked, says Levick. Look no farther than the Murdoch-owned Wall Street Journal, he says. “On the Monday morning of this enormous scandal,” he notes, the paper had only a small notice about the closing of the News of the World.

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