Seven months later, the Rupert Murdoch-led company finds itself heavily entrenched in a phone-hacking scandal from some of its U.K. news outlets, which has forced News Corp. to take its bid in front of the same commission it tried to side-step. Analysts said the development could effectively delay News Corp’s BSkyB acquisition until the first quarter of 2012 at the earliest.

   “It’s politically difficult for the final approval for the financial transaction to occur against a background of which the chairman of News International is connected with BSkyB and his name is Murdoch,” Enders Analysis Founder and CEO Claire Enders said in a statement. “It’s really a question of the political climate. Britain’s Competition Commission now must hold a full-scale inquiry into whether the takeover would break anti-monopoly laws. These inquiries usually take six months, but this could take longer. This is a scandal of seismic proportions and of immense political and financial impact on News Corp. — potentially extremely negative to the business as a whole.”

   James Murdoch has been overseeing News International since 2007 — the same year he became non-executive chairman at BSkyB after running the satellite television company for four years as CEO. Murdoch said July 9 that the U.K. publishing unit would shut down its News of the World tabloid after allegations that employees hacked into voicemails of murder victims and politicians became public.

    In a July 11 report, Charles Stanley Analyst Sam Hart said News Corp. would face harsh consequences from the scandal. “News Corp. shares have been dubbed ‘politically toxic.’ The BSkyB deal is all but dead.”

    Not all analysts’ projections were as gloomy. Lazard Capital Markets Media Analyst Barton Crockett said that News Corp.’s ability to execute the acquisition in the long-term shouldn’t be affected. “The News Corp. phone-hack fiasco is the strangest bad news we’ve ever seen hit a stock we covered. Despite this, we believe the scandal should have limited lasting impact, and we’d buy any dip tied to it.”

    BGC Partners Media Analyst Louise Cooper called Murdoch’s push forward to move the BSkyB acquisition into the hands of the U.K. Competition Commission a “smart move.”

   “It allows politicians some wiggle room, it takes all the political pressure off. [Murdoch] has done the government a favor by forcing a competition inquiry — a favor which the media mogul will hope to redeem in the future,” Cooper said in a July 11 report. “It will take between 24 and 32 weeks for the Competition Commission, if it decides to review the bid, to issue its recommendations. That could give News Corp. time to contain the fallout tied to the hacking scandal.”

    Cooper added that despite BSkyB’s shares also falling in the wake of the hacking scandal news, investors shouldn’t worry. “This tells us that, en masse, the [investor community] thinks this deal is dead in the water for at least the foreseeable future. What is interesting is that we at BGC are starting to see some bottom fishing from institutions that think that even without a deal, BSkyB is looking good value,” she said.