Damage Control And The Limits To PR

Michael Hedges April 18, 2011 Follow on Twitter

Beginning in the late 20th Century, after ‘management by objectives’ and ‘in search of excellence’ had fallen away, private sector organizations uncovered new value – and new values – in serving up well-turned phrases for two increasingly important stakeholders: investors and governments. The corporate communications industry – something between lobbying and advertising – could, it said, not only add value but create it. There are, of course, limits.

News International, owned by Rupert Murdoch’s News Corporation, publishes several newspapers in the UK. A couple of them are quintessential tabloids: The Sun and News of the World. There are other tabloids published in the UK. Indeed, the UK newspaper market is, arguably, the world’s most competitive. It’s also lucrative, creative (in more ways than one) and fun (particularly for observers).

Tabloids are what tabloids are: entertainment. They are filled with alien invaders, conspiracy theories, stories about celebrities, photos of celebrities and more stories about celebrities. For the overly serious, tabloids live on the journalistic fringe. For others, UK tabloids are high art.

News Of The World is the biggest selling English-language newspaper on Earth. Its editors and reporters relentlessly hunt the wildest headline material. Sometimes the facts and other small matters get in the way. But, to paraphrase an old fable: being number one means never having to say you’re sorry.

A week ago (August 8) News Of The World apologized. “Following an extensive internal investigation and disclosures through civil legal cases, News International has decided to approach some civil litigants with an unreserved apology and an admission of liability,” said the carefully constructed statement. The phone-hacking story –  private telephones of the rich and famous had been surreptitiously accessed by News Of The World editors and reporters, a violation of UK law – needed to be contained.

“You talk about a reputation crisis—actually the business is doing really well. It shows what we were able to do is really put this problem into a box,” said James – The Younger – Murdoch, recently appointed Deputy COO of News Corporation, in an interview with US network PBS (April 8). With his new appointment, James Murdoch – hurriedly, some have observed – relocated to New York from London. In late January, Rupert Murdoch – The Elder – paid a special visit to London to put the “problem into a box.”

If the basic story, now old news, was confined to listening in to the answer boxes of assorted movie stars, television stars, sports stars, political figures, the Royal Family (wait, this list goes on forever) and others any respectable tabloid publisher would be prepared to apologize on page three and maybe offer a little cash. It’s OK; it’s in the budget. News Corporation has, upon reasonable calculation, set aside about £20 million.

Since the big apology, just one week, the basic story became more complicated, aside from complaints from phone-hacking victims about the low settlement offers. A third News Of The World reporter - James Weatherup - was arrested (April 14) as part of the Metropolitan Police investigation. When officers arrived to search his desk they found the contents had already been bagged and taken to an outside lawyer’s office, a breach of evidentiary rules. The Metropolitan Police, suffering criticism for lack of interest in the original (2005 - 2008) phone-hacking allegations, launched a new investigation called Operation Weeting in January.

A tiny break for News Corporation came at the end of the week (April 15) as High Court Justice Geoffery Vos decided to take on four test cases related to phone-hacking and potential damage settlements. “My experience of thousands of documents is that there is just half a dozen that actually matter,” he said. “Otherwise we will be going on forever. Some people may want to but I don't.” Mr. Murdoch would certainly agree. Some reports suggest as many as seven thousand individuals telephone may have been hacked in one way or another.

The newly found diligence of the official police investigation has shaken more stories, old and new, to the surface. A toss-off remark by News International CEO Rebekah Wade Brooks to Members of Parliament in 2003 that reporters “had paid police for information in the past” is now too inviting to pass up. Metropolitan Police Assistant Commissioner Cressida Dick informed (April 15) Home Affairs Select Committee Members of Parliament that “a scoping exercise to establish whether there are now any grounds for beginning a criminal investigation” is underway. Our Ms Brooks was editor of News Of The World between 2000 and 2003, when she moved to The Sun. In 2009 she became News International CEO.

Between the leaking and spinning, the phone-hacking story and its tentacles threatens to become for News Corporation what that oil spill has been for BP. Interestingly, public relations specialists recommend similar strategies. “The strategic challenge for (News International) now (is) to proactively change the narrative to make it more about the British media and les about the corporate reputation of the firm and parent News Corporation,” wrote PR Week (April 14). The apology was “a turning point” but News Corporation “can't push blame down the chain any longer.”

Elsewhere on the PR front and totally (maybe) disconnected, public relations whiz Matthew Freud bought out partner Publicis (April 15) to retake total control of PR firm Freud Communications. Matthew’s great-grandfather was psychotherapist Sigmund Freud. More recently, he’s the spouse of Elisabeth Murdoch, who just sold her television company Shine Television to News Corporation and is soon to join the News Corporation board of directors.

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Rupert Murdoch and News Corporation

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UK Newspapers

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