Media mogul Rupert Murdoch and his family have lost $1 billion in paper wealth following the scandals and closure of his tabloid newspaper News of the World.

The closure of the 168-year-old tabloid--Britain's largest-circulation newspaper by Murdoch's media conglomerate, News Corporation--seemed to serve a dual purpose. The first was to limit damage from the scandal, while the second was to help protect the former editor in his proposed $12 billion takeover of the pay-television company British Sky Broadcasting (BSkyB). However, in the wake of the scandal, that takeover will not happen. 

The News of the World was accused of hacking into or intercepting cellphone messages and e-mails, and paying for news tips and other information. Therefore, the scandal also raised ethical questions concerning the closer relationship between the British tabloid media and police.

Two hundred people have lost their jobs as a result of the tabloid's closure. Murdoch and his son James are to appear before the select committee on culture, media and sport Friday as well as Rebekah Brooks, their close confidante who resigned as chief executive of News International last week. 

We spoke with USC journalism professor Bryce Nelson, who teaches a class on media ethics, to hear about the effects of the scandal on tabloid journalism and the news industry as a whole. 

Neon Tommy: What is your opinion on the scandals surrounding that newspaper right now? 

Bryce Nelson: Well it's not just the newspapers, it's the whole Murdoch communications empire. It's a very serious scandal. I don't remember in the last half century one that is so severe and so widespread. It's a real wake-up call not only to the Murdoch organization News Corporation but also the rest of the media. There's rarely been media scandals that have had such wide-ranging implications – and such powerful implications – to other institutions.

NT: Do you think that closing the newspaper was the right move for Murdoch considering all of the scandals?

BN: Well, I think he was trying to take away some of the attention and responsibility for it. I don't think that anybody, except employees, regret the death of the News of the World, the few readers. I think he had little other choice. At that point, he was hoping to get the deal for the British Sky Broadcasting through, but he's given up on that because there's so much opposition in the House of Commons. 

NT: How does the closing of this paper affect all of his other publications?

BN: It's [not only closing the paper but also] the accusations of scandal, of illegally tapping into people's phone messages, their cell phones. It's part of a larger complaint against the kind of ruthlessness of the Murdoch organization in covering news or covering sensational aspects of it.

NT: What do you think his move (of folding the paper) says about the future of tabloid journalism? 

BN: Well I think it'll give people a pause about tabloid journalism and at least for a while make people more careful. But it's really quite dramatic. I don't remember any newspaper being closed of that magnitude over ethical violations.

NT: Newspapers are called a dying industry, so what do you think is going to happen specifically to the future of tabloid journalism? Is there a difference in the futures of tabloid versus hard, straight news print journalism?

BN: I think there will always be a future for tabloid journalism. But people have to be more careful with what they do. I don't think that newspapers are necessarily a dying industry; they will be changed but I think we will see the organization, important news organizations, still represented on the stage in the United States for many years to come.

NT: Do you think any legal action is going to take place to prevent the illegal practices in tabloid or overall journalism?

BN: There are problems in trying to whisk away the illegal and improper activities. They have a dampening effect on the freedom of the press too. There's some concern if this will inhibit rightful kind of exercise of freedom of press.

NT: This incident is specific to the UK, but how does it affect American tabloids and other journalistic publications?

BN: I think it will have a chastening effect, especially on the Murdoch publications. And that includes the New York Post, and perhaps it might even affect Fox News which is one of the most criticized parts of the Murdoch empire in the United States.

Reach reporter Brianne Walker here. Follow her on Twitter.