Opinion

Felix Salmon

Will the virus claim Rupert Murdoch himself?

By Felix Salmon
July 14, 2011

The News Corp hacking virus is proving both virulent and highly contagious. Rupert Murdoch tried to treat it with amputation, by closing down the News of the World, but the surgery came too late, and he couldn’t prevent the virus from spreading to the Sun and the Sunday Times. At that point, the virus was unstoppable: its next victim was Murdoch’s $12 billion bid to take control of BSkyB. Now, with the UK police investigation barely having started, the virus has managed to jump over the Atlantic: the FBI is getting involved, looking into allegations that Murdoch’s papers tried to hack the phones of 9/11 victims.

This isn’t the investigation under the Foreign Corrupt Practices Act that Eliot Spitzer was calling for, although that might well come next. Both of them would normally seem like a bit of a stretch — it’s far from clear that anybody at News ever successfully hacked into voicemails on US phones, and it’s hard to use the FCPA when there’s no clear financial benefit for the company doing the bribing. But these, of course, are not normal times, and the more the virus spreads the more harmful and powerful it becomes. On this side of the pond, Les Hinton in particular is looking vulnerable; he’s currently running the Wall Street Journal, and if he ends up falling victim to the virus, there’s a chance the WSJ could get infected by association.

This is not an existential crisis for News Corp, a $42 billion behemoth which will continue to exist in one form or another whatever happens. But it’s much more damaging to Rupert Murdoch personally, and to his son James. Both of them are now going testify in parliament on Tuesday, and there’s no way that the experience is going to be a pleasant experience for either of them. They can’t lie — the truth is going to come out sooner or later, and neither will want to risk a criminal perjury trial. But at the same time it will defy credulity if Murdoch claims to have had no knowledge of his newspapers’ techniques, or if James claims that he genuinely thought the illegal activities were confined to one royal reporter at the News of the World.

Amid all the talk, over the years, about who will succeed Rupert as head of News Corp, no one seriously considered the possibility that Rupert might be forced to step down and hand over control to a non-relation. But there’s no doubt that Rupert Murdoch is now a serious liability to News Corp, and that liability wouldn’t go away if he were replaced by James.

Murdoch has always been more interested in power than money, and so the fact that resigning would make his net worth soar means very little to him. (It’s not like he’ll ever spend his billions in any case.) But Tuesday’s grilling will only be the first of many very difficult situations: the UK and US investigations are going to go on for the foreseeable future, and the headlines will continue to come out in a damaging drip for a long time yet.

Rupert Murdoch turned his father’s small media company into a global empire; it has always been his dream to keep News Corp in the Murdoch family for generations to come. But that dream has never looked less likely than it does right now; the virus is closing in on the Murdochs, and their immunity to the virus, which was weak to begin with, is rapidly disappearing. It’s a story fit for the movies: even after huge triumphs like acquiring the WSJ and releasing Avatar, Murdoch could be doomed by his first love — the love of aggressive tabloid journalism. He’s tough: he’ll try to hold out for as long as he can. But he’s human, too. I wouldn’t be at all surprised if someone within News Corp weren’t working right now on a face-saving exit for one of the most successful media moguls of any era.

Comments
7 comments so far | RSS Comments RSS

They can’t lie? Erm, what they can’t do is tell the truth. They made it their business… literally.

Posted by hsvkitty | Report as abusive
 

The only reasonable action is to withdraw the corporate charter to those organizations that performed criminal acts. Once the charter is withdrawn, the only thing the “organization” can do is liquidate their assets and pay off their stockholders in proportion to their holdings. That would mean, essentially, that each of Murdoch holdings would be separated totally from each other and there would be no News Corp. existing. That’s the right thing to do. Murdoch’s billions would go to compensating his stockholders for their losses.

Posted by robert1234 | Report as abusive
 

Nasty man, that Rupert Murdoch. All this looks very good on him.

Posted by Elektrobahn | Report as abusive
 

POWER CORRUPTS AND AND ABSOLUTE POWER CORRUPTS ABSOLUTELY. MONOPOLIES HAVE A WAY OF PRODUCING PEOPLE SO DRUNK ON POWER & MONEY THAT THEY FAIL TO REALISE WHEN THEY CROSS THE LINE. Most of present day ills of the western nations are that their BANKS & MEDIA have grown into conglomerates controlled by a few Power & Money hungry people and most of the politicians are bit players who come and go on the stage as per the dictates of these people.
Monopolies and over grown conglomerates are going to be the self made weapons of the western capitalism, which will ultimately destroy it.

Posted by kvkschoudary | Report as abusive
 

Mt. Salmon,
You forget that it was the money that bought him the power and he will be the first to tell you that the more the money , the more the power.
Rupert Murdoch built his wealth by preying on the gullible and catering to their lowest instincts. He has made an enormous contribution to the debasement of discourse in public life and cared not a whit about the consequences so long as the money was coming in. He is, if you think about it, on the same moral level as a drug dealer.

Posted by Biscayne | Report as abusive
 

Mt. Salmon,
You forget that it was the money that bought him the power and he will be the first to tell you that the more the money , the more the power.
Rupert Murdoch built his wealth by preying on the gullible and catering to their lowest instincts. He has made an enormous contribution to the debasement of discourse in public life and cared not a whit about the consequences so long as the money was coming in. He is, if you think about it, on the same moral level as a drug dealer.

Posted by Biscayne | Report as abusive
 

There is a moment here when formal professional journalism can regain some credibility and relevance. News Corps’ pattern of behavior goes far beyond phone hacking. Can the news media report on the news media. Are there investigative reporters that are willing to report that their associates broke the law, and identify them by name. Not sure I buy the ‘I was only following orders’ defense that some of the News Corps types are pushing.

Posted by ARJTurgot2 | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •