empire. this is "piers morgan tonight." good evening. a little later, i'll speak with nancy grace, the woman that put the casey anthony trial on the map and became a lightning rod for her opinion on the woman she dubbed tot mom. first, the phone hacking scandal. i was editor of two major british tabloid newspapers. i was editor "nufz the world" from 1994 to 1995. and i was also editor from "daily mirror" from 1995 to 2004. for the record, i don't think any article we published was ever obtained through illegal means. b i readwrote a detailed book on experiences. i want to bring in jessica reef cohen, porter bibbing managing partner of medical tech capital partners and john coffey and kendall lesser, author of google, end of the world as we know it. this is a quiet, unprecedented, extraordinary situation. two of rupert murdoch's ceos resigns, two top police officers, gone, resigned. a whistleblower has been found dead. police have been stressing, they don't think it's suspicious. have you seen anything like quite like this? and as rupert murdoch prepares to address members of parliament in britain tomorrow, how serious is this moment for him and his company? >> it's dreadfully serious for rupert murdoch, his family and his company. the company itself i don't think is in jeopardy. it's the second or third largest media company in the world, but murdoch's aura of invincibility is gone. his lieutenants are apples falling from the tree. his argument it was a few rotten apples is discredited. it's really a barrel problem. he has to deal with that, and he knows in coming days, not just in his testimony tomorrow, but in coming days, there will be more apples that will be revealed to have been rotten. he has a lot to answer for. >> i can say from my experience, editing a newspaper for him and this was, five, six years before any of this phone hacking began, but certainly when i worked for him, he wanted his editors toagl of the things would you expect from a tabloid newspaper, but always to operate within the law. and i find it impossible, personally knowing the man, to think he would have known about law breaking on his newspapers, let alone condone it. >> it's not just a question of what you knew, but what you should have known. they were turning up the most unbelievable stuff from lady diana or others? how did his top people ask the question, how did you get this? you know as an editor if your reporter comes into you with a story and says i got this, i think it's a page one story. and oh, my god, it's a great story, it is a page one story. the first question, who were your sources? why weren't they asking those questions? >> i'm sure the editors would be asking the question. i don't know the man, and i think tomorrow when he gets in front of parliament, he'll probably argue, look, i'm in charge of a $32 billion corporation. i cannot be expected to mic micromanage the methodology of every part of his company. do you? >> no. but when he sees these salacious stories on page one, i expect him -- when i profiled murdoch at 95, i lived with him for ten days. he was calling editors every day. every newspaper from his around the world, 130 at the time, were lined up. he would leaf through many of those papers. i would expect he might have asked the question, how -- how are we getting all of this wonderful stuff? >> turn to porter bibb here. there's been lots of speculation and denial from the murdoches that the newspaper division may simply be sold off in britain. again, i find that hard to believe because of the deep-rooted love he has for those papers, and as former editor of "news of the world," i was pretty shocked after seeing the "news of the world" shot down. first newspaper he bought in britain and i think he huge respect and personal admiration for. did it become too hot? is the newspaper division for him now in britain simply not making enough money to make it worth saving in a crisis like this? >> he has got to address several constituencies. one is news corp investors, and print is a losing proposition, and news corp has not made a transition to the digital domain with any of their newspapers, starting with "the sunday times" of london. even "the wall street journal" is still margin allally profita venture, which he way overpaid by several million dollars. in the uk he is seenpy politicians and regulators by dominating the media with his heavy, de facto control interest in sky news and bskyb, and the major national dailies. so it's a matter of public record, piers, that eight weeks before this whole shakespearean drama hit the headlines, rupert and senior managers were meeting with advisers and financial managers to explore the possibility of selling the entire conglomeration of newspapers. that is probably going to be inevitable now, and who knows whether "the wall street journal" and "new york post" will be included. >> jessica reef cohen, your firm was involved with the purchase of bskyb. was your reading that murdoch was going to sell his newspaper division? >> we have no idea. we really don't know. but from an investor perspective, i think everybody would be thrilled if news corp spun out the newspaper division or sold it, but somehow separated it from the entertainment assets. >> let me ask you. obviously, the bskyb, a huge deal for news corporation. 9 billion, 10 billion pounds, $16 billion dollars. it looks like it's in serious jeopardy. it used to be a financial cash cow. when i was at news of the world it made $100 million profit at least. do you see a time coming as newspapers diminish in importance, when murdoch's corporation, news corporation, with or without the murdoches, views newspapers as disposable assets to let them focus on television and movies, which make more money? >> well, i mean, there's clearly an affinity for newspapers by murdoch. it's less than 10% of the total company. and uk properties are less than 10 cents of share of value. so they are really not that significant. all of the growth has been in newer media cable networks now over 50% of the company's operating income, and there is tremendous growth in satellite assets like star tv in india and sky tire, sky deutscheland, bskyb. it's still relatively underpenetrated, a growth engine and a free cash flow machine. >> the price of news corp crashing the past two weeks, is it now cheap? are the shares now undervalued, given the scale of this crisis? >> yes, news corp has lost over $8 billion of value since the crisis erupted in the last few weeks. and we can account with the decline in bskyb share price, and even just saying they give away the uk newspapers which obviously wouldn't happen. they could sell it or spin it, but that's maybe $2 billion of the whole decline. so $6 billion is more emotional, more worry about the unknowns, but i think at some point when we get through this, as long as u.s. assets aren't touched and pulled down with the scandal. uk-contained, then this is an amazing entry point to news corp stock. >> let me bring in professor coffey here. professor coffey, huge anger on both sides of the atlantic to the murdoches personally. he has been a talisman figure in the media a long time. you don't get to be the most dominant media delayer in the world without attracting a fair share of snipers. how much of that is justified? looking at him dispassionately? do you think he's primarily a force for good or not so good in the media? >> i think he's probably led a race to the bottom. the tabloid world has to respond to whoever is getting the most headlines and circulation. i really am only an expert on criminal liability. d i do not suggest that he faces a high level of criminal liability, unless it can be shown that he personally authorized either the payment of a bribe to a foreign governmental official, like a scotland yard office, or news corp hid bribes by falsifying books and records and that latter possibility is really the more likely one, because almost no company has disclosed they are paying bribes. somewhere in news corp there will be liability if you hid bribes that, were, in fact, paid. >> in terms of exposure to the american part of the company, am i right in thinking that if that is proven if there were bribes being paid, either anonymously or in fake names, whatever it may be, if it were paid by news international, a british company, does that still impact on the american part of the business? >> there are two distinctions here, if the bribes are paid by news international, i think it is unlikely that u.s. prosecutors would want to go after bribery to british governmental officials. i think they would still be interested in the books and records of news corp. news international is conso consolidated with news corp. and those records fail to disclosed there were bribes paid. and $8 million in stock value has disappeared over the last couple of weeks. there will be securities class actions that you never disclosed business practices and when they were disclosed, the value fell like a stone. >> reporting this scandal, and i don't think any journalist can possibly defend some of the stuff going on in terms of phone hacking missing girls who turn out to be murdered and so on, but in terms of longer-term benefit for journalism, you can see this could be a watershed moment that actually the perils of new technology and so on, in investigative journalism, dealt with in such a high-profile manner, and journalism itself may be better? do you worry conversely all of this attention on this means there may be further attacks on freedom of the press? >> i think you have to separate the questions. and it's a good question. one, there is no question it will make the press even less popular than we are today. in that sense, it's not good for journalism. we're all hit by the broad brush that we probably in many cases don't deserve, on the other hands, you can argue -- the press is a very insular institution, and not used to criticism mu criticism. and when it breaks out to the open this way and criticized, it tends to raise the consciousness of reporters and all journalists to say hey, wait a second, there but for the grace of god go i and i don't want to go there. maybe it forces us to re-think about what lines we'll draw and what is permissible in the world of journalism and that's a good thing if that happens. >> thank you, all, very much for your time. ken, jessica, porter, and john coffey. rupert murdoch will defend himself and his business in front of the world's television cameras to british members of parliament. it will be an extraordinary spectacle and we'll know more by the end of it. thank you, all, for your time. >> thank you. coming up, i want to bring in a woman know whos the murdoches very well personally and what it will mean for the family business and the family itself. just one phillips' colon health probiotic cap a day helps defends against occasional constipation, diarrhea, gas and bloating. with three strains of good bacteria to help balance your colon. you had me at "probiotic." [ female announcer ] phillips' colon health. we want to bring in a woman that knows the murdoches very well. she is a contributing editor although "vanity fair." thank you for joining me. obviously a hell of a mess for the murdoches. >> piers, i just got a call an hour ago, and ricco wanted to tell me personally, you know, he's not okay. ever since he met with millie dowler, the murdered girl's parents, he hasn't felt the same. his voice has been cracking, people around him are very concerned, his children are very concerned. this is a man who is more devastated than he has ever been in his entire 80 years, and you know, he is appalled at what's gone on on his watch, and his anxious to get to the bottom of it as we all are. >> as i said earlier during the panel, being one the editors, when we tripped up on by what on these standard are relatively minor indiscretions, he was always -- always incredibly quick to be publicly sensourous of me or whatever editor he was offending. i just cannot accept, although there is this huge witch hunt going on to bring him down personally, i don't accept that he himself would be party to a leg illegal activity. >> being features editor at "the new york post" and working for him at "the times" and the now defunct "today" newspaper, i completely agree with you, piers. he became a friend to me when i was at the "new york post," he would stop by my office and talk to me. he wanted to know what tomorrow's headlines were. he would not in any way want to interfere with a story. this is a man who cares so much about his legacy. he once said to me, all i want is for my kids to be decent people. and what i enjoy more than anything else in the morning is getting up and looking at all my newspapers and then looking at the competition and seeing who has done better. and, you know, it was like -- he would -- and i loved the sort of image of him in his pajamas. >> vicky, i wouldn't want this to become a kind of valedictory, perfect kind of segment. because, of course, he's not. he is a ruthless businessman who built this empire. he played hard and fast and aggressively to win. he's not the first guy who has done that that wants power and so on. i can only go on my experience. people always assume if you edit a paper for murdoch that he constantly interfered. that just did not happen. and i wrote a book of diaries, detailing my time there, and he just didn't do that. it wasn't his thing. what he would do is discuss them after you published them. but he assumed his line managers, editors, and so on, would have done all of the necessary checking to make sure these stories were publishable according to the law of the land and i think that's why this will hit him so hard. knowing the family, what do you think he will be coming over as tomorrow when he appears on mp? it's a very difficult situation. he's never had to do this before. how do you think he'll deal with this? >> the one thing about rupert is that -- yes, he can be ruthless, but actually we can just talk about this, he's ruthless, but also entrepreneurial. he built an empire, often at great personal risk. but tomorrow i expect to see a very, very sincerely con cite person. >> i need to wrap this up. and the problem is that the british press have always had a demonic reputation and unfortunately, this series of x expose's has merely reaffirmeded to people their worst fears. i think it's not as simple as that. >> i don't either. i agree with that. >> bad apples that have simply gone way too far. it's not indicative of my time on fleet street. most journalists be hayed. and most journalists in britain share a view that it's completely unacceptable. people may be being arrested here, but we saw one of the journalists arrested in june being cleared and no further action to be taken. i think we need to wait until we see who gets charged, what the evidence is. we see court cases and get to the bottom of this, rather than everybody jumping in with size nine boots and effectively convicting everybody. >> we have to wait. we just don't know. we don't know enough. >> vicky, i have to leave it there. thank you for your time. we will know a lot more when rupert murdoch meets the mps tomorrow it will be a dramatic time. > next, nancy grace speaks out on the case that gripped the nation. [ female announcer ] now at red lobster, a complete four-course seafood feast for $15. start with soup, then have salad and biscuits followed by 1 of 7 delicious entrees and finish with something sweet. all for just $15. you casey anthony is a free woman tonight, she walked out of a florida jail early yesterday morning, after a jury found her not guilty in the death of her 2-year-old daughter. no one is more outraged by that verdict than nancy grace. a new book is "death on the d list." nancy joins me now. you followed the story probably more closely than anybody else, and you were clearly outraged by the verdict. but you reiterated your faith in the american justice system. what do you think went wrong here? >> piers, number one, thank you for having me. i guess at this point, knowing that tot mom has walked free leaves more of a sense of extreme disappointment, a feeling of being let down. because those of us that have devoted i would say my entire adult life to public service, well, since the murder of my fiance back in 1979 to see a miscarriage of justice in a system we hold so dear, i mean, piers, the justice system is something that i've held onto and believed in since keith's murder many years ago, and to see it fail is deeply upsetting me. amidst claims she's fielding million-dollar offers and is considering plastic surgery and marriage proposals, it's very upsetting, piers. extremely upsetting. >> here is the thing, nancy, playing devil's advocate. i can feel the passions running high. >> of course, you will play devil's advocate. i know what that means. >> i mean, listen, have you an extraordinary run of success covering your trial. hln had fantastic ratings. >> whoa, wait, wait, wait, wait, wait. i didn't make anything my own. this story is not my story. this story is caylee's story. and i remember the night that we first heard about the case. every day, every morning around 5:00 a.m., between 5:00 and 7:00 a.m., i get a list of about 70 to 80 cases, i start reading them along with my executive producer, dean, we go through those and many, many others. we go to every website, every news outlet to find the case we're looking for to cover that night. and when i heard the tot mom's story. i heard about caylee. i said that's it. that's the case we need to do tonight. that one. and my ep agreed. that was a long time ago. but it's not my case. this is caylee's case. and it is every parent in america's case. as a warning. >> i suppose the question from me to you as a legal brain is the inconsistency really between continuing to support the system if you feel that it failed so much. what would you do differently in light of this trial, given that you believe it's such a miscarriage of justice? >> piers, piers, piers, come on. you're super smart. here's the deal. it's like saying i believe in god because i don't want to go to church because i hate organized relinl gioreligion. what a line. the justice system is made up of people. people have faults. it's not perfect. when i tried cases in intercity atlanta for a decade, i went to every jury trial, knowing it was a crapshoot. knowing it all depended on the jury that i put in the box, the 12 i put in the box. and oh, that's old. but it was a scary thing for me, because i was always convinced that i could lose the case and there would be a miscarriage of justice. and there was one here. does that mean i don't believe in our justice system? no. to believe in our justice system and hold it dear, you accept it warts and all. >> i've made it very, very clear in my coverage of this, that i just don't know anybody who would not report a missing child for 31 days. that alone is appalling negligence and i don't really buy into the post traumatic thing. some experts believe this has been done before. i don't believe that. i'm totally with you. the appalling negligence, the fact she went partying, didn't report it, all of that stuff. here is where i have a slight issue, and it's about the system itself. the jurors have taken a lot of slack. some of them have been flighted away from their homes. >> you mean one of them. let's get the facts straight. there's only one juror. >> the point i had make this. 90% of all of the legal experts i've had on, when i have really pushed them, all of them said there was not enough hard evidence to link her to the murder of her child. lots of circumstantial evidence, and the beyond a reasonable doubt element is the one that is clearly the debatable point. none of them would blame the juror