Rupert Murdoch’s escape act

May 1, 2012

The publication today of Parliament’s 121-page report (pdf) on phone hacking has the British press all but publishing obituaries for Rupert Murdoch. The report damns him for turning “a blind eye” to the scandal of phone hacking at his companies, News Corporation and News International.

Murdoch is not “a fit person to exercise the stewardship of a major international company,” the report concludes, leveling a hammer to the media baron’s head. As the Telegraph interprets this finding, BSkyB, the UK satellite broadcaster that Murdoch owns 39.1 percent of, is “vulnerable” to a challenge from the regulators at Ofcom. If the regulators applied their “fit and proper” test to BSkyB, they could cancel its broadcasting license, order News Corp. to reduce its holdings in the broadcaster and oust Rupert’s son James Murdoch from its board of directors. The BBC seconded the Telegraph‘s take, and the Telegraph and the Guardian speculate that the report will echo in the United States, triggering criminal prosecutions and unending damage to Murdoch’s corporate reputation here.

Murdoch’s corporate counterattack today states that News Corp. has “already confronted and … acted on the failings documented in the Report,” insisting that the company has righted all the wrongs. In a memo to his 50,000 employees, Murdoch remained defiant, minimizing corporate wrongdoing and maximizing the corrective measures his company has taken.

Even more bad news for Murdoch will arrive when the Leveson Inquiry concludes its investigation and issues recommendations for future press regulation.

And yet, Murdoch performs best when his back is against the wall. He won his war against the printers at Wapping in 1986, he survived his bankers’ foreclosure notices in 1990, and has triumphed over other scandals and calamities in past years by remaining cool. Here’s the path his escape route may take.

Blame the politicians. Murdoch has plenty of fodder to portray himself a victim of feuding politicians. His corporate minions are already denouncing Parliament’s report as “highly partisan” and “divided … along party lines.” Indeed, the six Labour and Liberal Democrat members voted in support of the report, and four Tories voted against. Conservative MP Louise Mensch, who served on the report committee, carried the torch for Team Murdoch in her comments to the press: “It will be correctly seen as a partisan report, and will have lost a very great deal of its credibility, which is an enormous shame.”

But this partisan explanation is too simple. Murdoch doesn’t really have any politics – unless expediency qualifies as politics. He supported the Conservatives when Margaret Thatcher was around, shifted to Labour when Tony Blair rose, and cut back to rejoin the Tories again to catch the David Cameron surge. He’s not partisan, he’s for Rupert Murdoch! If he can convince enough people that Labour is fighting the Conservatives and using him as the proxy, he’ll gain footing.

Rally the faithful. I know what you’re thinking. Rally what faithful? Who in the UK has faith in Murdoch? The only Murdoch rally that will attract crowds will be his funeral. But if Rupert Murdoch is such an unmitigated monster, if he has no constituency at all, then why hasn’t the British reading public turned on him?

Murdoch has a sixth sense of how far he can push the public. They might have dragged him through the streets and hanged him last summer after the Guardian broke the Milly Dowler phone-hacking scandal had he not outwitted them by driving a stake into the chest of News of the World, his offending (and very popular) tabloid. As a Guardian editorial wistfully noted last month, UK readers have continued to support Murdoch’s surviving newspapers, the Times, circulation 390,000; the Sunday Times, circulation 1 million; and the Sun tabloid, circulation 2.6 million.

“There is a market,” the Guardian editorialists wrote, “for the output of phone-hacking, media harassment and other unethical practices.” Although the millions who read Murdoch’s papers aren’t dittoheads, they can be moved to side with Murdoch if he doesn’t overdo his appeal to them. He can rightly say that he folded his offending newspaper and fired its entire staff – both those guilty and those innocent of phone hacking – in a personal, and corporate, act of contrition worth $91 million.

Murdoch could reshape the new report and the forthcoming Leveson findings as attacks on his readers, as attempts of Labour politicians to drive his people-pleasing journalism out of the country. He could accuse competing UK newspapers – including the Guardian, the Independent, the Daily Mail, the Telegraph, the Mirror – of cowardly silence for standing by while the government dismantled his holdings. Although the Sun is profitable, the Sunday Times and Times aren’t, with Rupert subsidizing them for the benefit of readers (and himself, of course). “Rupert Murdoch: Free Speech Martyr” may not be much of a bumper sticker, but desperate times call for desperate measures. If Murdoch’s newspapers really have the power to control public opinion, as his critics say, or move it in a direction that favors him, now is the time to start propagandizing.

The Doomsday option. Murdoch critics have long deplored his dominance of the UK newspaper market. His titles account for a third of daily newspaper circulation and 40 percent of Sunday circulation, usually with a side comment that Murdoch’s market dominance argues against letting him acquire the 60.9 percent he desires. What if Murdoch let it be known that a price would be paid if the Ofcom regulators booted him out of BSkyB – that is, that he would depart the UK media market completely and salt the earth behind him? He wouldn’t sell the Times, the Sunday Times and the Sun; he’d just fold them as he did News of the World, putting thousands of journalists, printers, salespeople and others out of work. I can hear Murdoch’s John Galtian speech now: “If I am not fit to own part of BSkyB, then I’m not fit to own UK newspapers, either.”

Nothing would make the Labour Party and Murdoch’s competitors happier. And UK newspaper profits aren’t important to News Corp.’s bottom line, so the self-inflicted wound would not be grievous. Would Labour wake up and realize that Murdoch is a political asset – the perfect Satan to blame for all their ills? That if he didn’t exist, they’d have to invent him? Do they really want to be blamed – even in part – for the loss of so many newspaper jobs in such a short interval? Murdoch has already proved he’ll bow in the short term to survive the long term. Could he bluff his way past the regulators and the politicians?

All of these schemes are outrageous, low-percentage gambles. But that’s the sort of character Rupert Murdoch is. Whatever goes down, he won’t give up. They’ll never take him alive.


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PHOTO: A reporter picks up a copy of the report by the Department of Culture, Media and Sport into News International and phone hacking before a news conference at Portcullis House in London, May 1, 2012. REUTERS/Olivia Harris


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A neat analysis, Jack. Except he’d never be able to implode The Times,it would resurrect itself at once.

Posted by MIKEROL | Report as abusive

“…then why hasn’t the British reading public turned on him?”

Uh, mostly the picture on page 3.

Posted by ARJTurgot2 | Report as abusive

This article totally ignores the crime evidence coming from Murdoch’s other businesses including email hacking from the Sun, email hacking from Sky, sending competitors’ security codes to pirate web-sites to bankrupt competitors from NDS, paying police and defense department officials for tips, massive criminal cover up after being notified to retain documents, even a murder investigation of a whistleblower. Most of its income has come from criminal enterprises and its admitted cover up leaves Murdoch wide open to Foreign &Corrupt Practices act, destruction of evidence, and shareholder lawsuits for failure to disclose. When Murdoch admitted a cover up to Robert Jay in Levenson hearing, he allowed Levenson to discover findings from Murdoch’s first outside legal team review even without Murdoch’s release, under a fraud provision.This legal review likely shows Murdoch and News Corp knew about wide-scale hacking since at least 2005. That is when the real fun starts. My only question is how pervasive does corruption have to be to trigger US RICO statutes, which is the preferred method for attacking Mafia and other widespread criminal behavior.

Posted by sylvan | Report as abusive

a billionaire behaves as if they are not bound by consequence; no one is surprised.

Posted by S0MA | Report as abusive