Who cares if Murdoch lobbied?

April 25, 2012

Pummel Rupert Murdoch and his minions all you want for News Corp.’s phone-hacking of celebrities and crime victims, its computer-hacking, its blagging, its bribing of police, its payments of hush money, its obstruction of justice, and its operation of what former British Prime Minister Gordon Brown once called a “criminal-media nexus.”

But spare me the feigned outrage excited by this week’s interrogations of Murdoch and his son James Murdoch by the Leveson Inquiry into press ethics and practices. The Guardian, the Telegraph and the New York Times, among others, appear to be appalled by news that the media baron lobbied the UK government aggressively so that he could expand his holdings in the tightly regulated satellite broadcaster BSkyB from 39.1 percent to 100 percent. The Times cites subpoenaed News Corp. emails released by Leveson to show a Murdoch lobbyist working “hand-in-glove” with the office of a government regulator.

Isn’t climbing into the skins of regulators the very definition of lobbying? That’s how I understand it. Hate Murdoch all you want, but if you’re invested in highly regulated businesses like BSkyB and you need government approval to invest deeper in the regulated business, then working “hand-in-glove” with the regulators is exactly what the situation calls for. Should the Murdochs have ignored the regulators as they attempted to increase their holdings in BSkyB? Of course not.

Likewise, I fail to detect the scandal in James Murdoch meeting repeatedly with David Cameron while Cameron was still the leader of the opposition, as James confessed in Tuesday’s Leveson grilling (pdf), or of James’s admission of having raised the topic of News Corp.’s bid for BSkyB in a “tiny, side conversation” with Cameron at a social event in December 2010. If political judgments are being made over who can own and operate businesses, the Murdochs would be remiss if they hadn’t approached politicians for their support. For example, today’s Wall Street Journal reports that NetJets, the private-jet company owned by Warren Buffett’s Berkshire Hathaway has spent in excess of $1 million over the last three years to lobby Congress to reduce user fees charged to his wealthy customers. This is the same Warren Buffett behind the so-called Buffett Rule to soak the rich.

If the issue is that Rupert Murdoch is not a fit owner of BSkyB under the law because he buys and sells politicians, that his newspapers contrive investigations to punish politicians who stand in the way of his conquests and that his enterprises corrupt police forces, then let’s have that debate. But that’s not the accusation against Murdoch at the Leveson Inquiry this particular news cycle.

Remember, the UK media establishment has long felt threatened by Murdoch’s daring ways in the marketplace and has routinely urged regulators to save them from his predations. In October 2010, executives from the Daily Telegraph, the Daily Mail, the Guardian, the Daily Mirror, the BBC, Channel 4 and the BT Group signed a letter to government regulators protesting Murdoch’s proposed BSkyB takeover. The Financial Times, another Murdoch competitor, editorialized against the acquisition because Murdoch might use his newly expanded BSkyB power to subsidize and popularize his UK newspapers, including his money-losing Times and Sunday Times. Oh, and they made obligatory noises about how Murdoch’s purchase would damage democracy.

“We believe that the proposed takeover could have serious and far-reaching consequences for media plurality,” the 2010 letter from the executives lamented. As I observed at the time, this fretting about “media plurality” was a little rich coming from a consortium of bellyachers that included the BBC, a global enterprise that was then reaping $7.7 billion annually in revenues compared with BSkyB’s $9.4 billion. The BBC benefits from an arrangement in which all households that watch or record TV must purchase a compulsory $235 “license” (go ahead and call it a tax if you wish, because you’ll be fined up to $1,600 if you don’t pay) that funds the BBC. It takes some gall for the BBC, which automatically collects money from TV households, to protest what might happen if Murdoch gains greater control over a competing business that people voluntarily pay for.

My previously mentioned 2010 piece reviewed the historical heavy-handedness of UK media regulators. In 1920, when only three radio stations aired programming in the UK, the government declined applications for new licenses, claiming that “the ether is already full.” As Eli M. Noam reported in his 1991 book, Broadcasting in Europe, UK newspaper publishers encouraged the development of the “public” BBC so that no new commercial enterprise could take root, as happened in the United States, and attack their advertising base. UK regulators suppressed commercial TV and radio for decades and protected the BBC from the onslaught of cable TV. Parliament even regulated the VCR.

The campaign against Murdoch’s total ownership of BSkyB is only more of the same. UK protectionism and the state sanctioning of the BBC make Rupert Murdoch, a villain many times over in other arenas, an unlikely hero. Reading the latest Leveson transcripts, I have yet to find evidence of him seeking direct favors from the government (subsidies, bailouts, etc.), although I am made suspicious by his insistence today that, “I have never asked a prime minister for anything.”

As best as I can judge, he seems to be seeking the liberty to invest his billions the way he sees fit to compete against the established interests. Don’t damn Murdoch for learning the rules of the regulatory game and then playing them as aggressively as he can.

* * * * * *

In the old days, I tried to work into every Murdoch column a reference to his 2007 denial that he was a “genocidal tyrant.” I tried and failed in this column. Upbraid me via email, Shafer.Reuters@gmail.com, or unfollow my Twitter feed. Sign up for email notifications of new Shafer columns (and other occasional announcements). Subscribe to this RSS feed for new Shafer columns, and subscribe to this hand-built RSS feed for corrections to my column.

PHOTO: A combination of still images from broadcast footage shows News Corporation Chief Executive and Chairman Rupert Murdoch speaking at the Leveson Inquiry into the culture, practices and ethics of the media, at the High Court in London April 25, 2012. REUTERS/POOL via Reuters TV


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/

Jack Shafer….what a predictable neocon tool… at least he doesn’t pretend to be a journalist

Posted by maltadefender | Report as abusive

The outrage is primarily directed at the UK government’s apparent willingness to influence policy and bend rules, to the detriment of Murdoch’s competitors and the general health of the nation’s media, in exchange for favours. The deal seems to be something like this: push through whatever major media acquisition we’re interested in and we’ll promote you in our media. Unfortunately the corollary appears to be: turn your backs on us and we’ll bring down the government…

Posted by emberglance | Report as abusive

No one cares if Murdoch lobbied. They care HOW Murdoch lobbied.

Posted by ARJTurgot2 | Report as abusive

Sad to say that the rule of law only applies if you cannot afford a lawyer. If any of the cited allegations were applied against the common man or woman, they would be in jail already. Not so with those who have the government in their pocket.

Posted by TIREDINPHILLY | Report as abusive

Sure, we all KNEW that the Murdochs lobbied. Except that they kind of always denied it. Now we have proof.

Oh and spare the bullshit about threatening the establishment, he owns the times FFS. Murdoch IS establishment.

He is also chairman of an organisation that has been criminally corrupting public officals on a grand scale.

Do you think the worlds greatest media tycoon is so incompetent that he didn’t know? Or is he culpable?

That is the question.

Posted by Dafydd | Report as abusive

The outrage, surely, is that information was leaked by an adviser ahead of a ministerial announcement to the Commons, which is a breach of the ministerial code. Further, the leak contained market sensitive information and was made at a time when the markets were open, which is a breach of all sorts of things.

If the same had happened in the US, the SEC would already be getting the handcuffs out.

Please don’t lecture us or feign ennui simply because it’s the only way you can think of to generate advertising clicks on your blog.

Posted by Ian_Kemmish | Report as abusive

Is anyone going to seriously suggest that phone and e mail hacking has not been a widespread practice by ALL newspaper journalists? I recall one of them commenting that he would have been left behind in the race for a ‘scoop’ if he didn’t do the same. Clean up the media by all means but let’s not just have a Murdoch witch hunt.

Posted by pavlaki | Report as abusive

Is anyone going to seriously suggest that phone and e mail hacking has not been a widespread practice by ALL newspaper journalists? I recall one of them commenting that he would have been left behind in the race for a ‘scoop’ if he didn’t do the same. Clean up the media by all means but let’s not just have a Murdoch witch hunt.

Posted by pavlaki | Report as abusive

I am tired of these hearings. It is an embarrassment for the Congress or the Parliament. It is useless, pandering big waste of time and money; nothing ever happens. These representatives milk the neighbor’s cow and when they get caught they blame the cow.

Posted by ofilha | Report as abusive

I think it ought to have behooved you, Jack, to note what the Columbia Journalism Review posted on the matter yesterday, that is a bit more than “lobbying”, no?
“The Murdoch scandal heated (hotted?) up yet again today with James Murdoch’s testimony to the Leveson Inquiry, and it now threatens to bring down a key member of the prime minister’s cabinet—or more.

Emails detail an awfully close relationship and perhaps an illegal back-and-forth, sometimes twelve messages a day, between James Murdoch and Jeremy Hunt. The problem is Hunt was acting as a sort of regulator/judge overseeing News Corporation’s bid to consolidate its grip on British by buying the rest of the BSkyB satellite network.

The Guardian:

What made this busy back channel particularly remarkable was that the culture secretary was constantly claiming no such relationship existed. Hunt told the Commons on 30 June: “I am deciding this deal on a quasi-judicial basis, but I have not met Rupert Murdoch or James Murdoch in recent weeks, and all the meetings I have had with them have been minuted and done through official channels.”
Here’s one of the most damning emails:

The following day, an email sent at 3.21pm shows Murdoch being supplied with the wording of Hunt’s crucial, and market-sensitive, official statement, due to be delivered the next day.
“Confidential: managed to get some infos [sic] on the plans for tomorrow (although absolutely illegal!). Press statement at 7.30am … Lots of legal issues around the statement so he has tried to get a version which helps us … JH will announce … that he wishes to look at any undertakings that have the potential to prevent the potential threats of media plurality.”

Tomorrow Rupert Murdoch is going to testify. Pass the popcorn, but leave your foam pies at home.

— The Guardian’s Nick Davies, who broke this scandal, writes about what the news means, and what it could come to mean:

Now we come to the dark heart of this strange affair.

Critics of the Murdochs have often suspected that they have exploited their position as newspaper owners to win secret favours from governments – and the Murdochs and the politicians alike have denied it. Now, for the first time, courtesy of the volatile chain-reaction of the phone-hacking scandal, we have compelling evidence…
At a time when Hunt was required to act in the legal role of a judge overseeing Ofcom’s inquiry into the bid, this evidence suggests he was secretly supplying News Corp with information about his confidential dealings with Ofcom, advising them on how to pick holes in Ofcom’s arguments, allowing their adviser to help him prepare a public statement, offering to “share the political heat” with them, and repeatedly pledging his support for their position.

If proved, this pushes Hunt’s political career to the edge of destruction. It cannot help him that his website currently displays an interview describing him as a cheerleader for Rupert Murdoch. But the pressure may not stop there. The question now is whether Lord Justice Leveson will order the disclosure of more emails or other evidence that could conceivably see the prime minister and his government pushed out to the edge as well.

— Simon Kelner, the former editor of The Independent, recalls the bizarre episode when James Murdoch and Rebekah Brooks stormed into the paper’s newsrooms to scream at him for an ad campaign that said, “Rupert Murdoch won’t decide this election. You Will”. Kelman writes that it showed how the Murdochs do business:

Brooks said very little, but, when her boss’s rage blew itself out, chipped in with: “We thought you were our friend”. Their use of language and the threatening nature of their approach came straight from the “Mafioso for Beginners” handbook.

Murdoch referred to “my family” constantly, something he echoed in his Leveson evidence today. Referring to this exchange, he said that I had been the beneficiary “of my family’s hospitality for a number of years”. Set in the context of his many dissemblings and obfuscations over recent months, the fact that this is a bald-faced lie is neither here nor there, just a casual slur despatched with little regard for the facts. (For the record, I went to Elisabeth Murdoch’s 40th birthday party in September 2008, the only time I can be accused of “availing myself” of Murdoch hospitality.)

His statement does, however, reveal a much wider and more significant truth: the Murdoch way of doing business. If you come to our parties, if you join us on our yachts, if you are at our cosily-arranged dinner table, we might expect something in return, but we certainly don’t expect you act in a way contrary to our interests. And if our largest-selling newspaper supports your political party … well, it’s not difficult to guess the rest.

http://www.cjr.org/the_audit/audit_notes _murdoch_minister_e.php

Posted by MIKEROL | Report as abusive

Had the author watched the hearing with Rupert Murdoch, it would have been evident that truth was not pouring out of his mouth. As for the who cares question, remember that Murdoch controls the news and hence truth, and lobbying serves to expand influence.

Posted by SanPa | Report as abusive

So, if Murdock met privately with the President of the United States as he did with Margaret Thatcher, you’d feel the same way?

What’s the opposite of a cynic? Would that be a naive person?

Posted by ptiffany | Report as abusive

Jack, Jack, Jack…

As hard as it is for me to admit publicly (or even secretly!) but I agree with you that no one should be surprised by Murdoch’s actions…nor should anyone display feigned outrage at mundane and routine lobbying at stratospheric levels as he did/does/will do.

But just as much…no one should give a rat’s ham about your being spared from the petty annoyance of reporting on hearings addressing Murdoch’s shananigans. Spare your own readers (the few that may still endure) your feigned outrage about “who cares?”.

Jack…that’s what I have been saying about your blog.

Posted by OlivesDad | Report as abusive