Blinking Is A Nervous Tick And Bad For Business

Michael Hedges October 24, 2016 Follow on Twitter

Executives are much happier exploring new opportunities than tackling headaches arising from the normal course of business. Shareholders are only happy when profits and dividends flow. The most successful - and thriving - management strategies keep sharp attention on happiness. When throbbing headaches invade the spirit pain relief becomes an object. Holidays are helpful.

Infamous News UK “investigative” reporter Mazher Mahmood has received a 15 month custodial sentence, reported the Guardian (October 21) and almost every other UK news outlet, two week after being found guilty of conspiring to pervert the course of justice - evidence tampering. Immediately thereafter, News UK “terminated” his employment, which had spanned more than two decades of using various disguises - one being the Fake Sheikh - to score salacious tid-bits for tabloids News Of The World and The Sun. Mr. Mahmood is “frightened” by the prospect of jail time, said his lawyer to the Court on sentencing, and his “career is over.”

Mr. Mahmood was brought to trial after a criminal case against a reality TV star for drug possession, which Mr. Mahmood “revealed,” collapsed in 2014 following his admission that a statement by his driver was, ironically, altered. His employment at News UK was, on that revelation, suspended with pay. Victims of the Fake Sheikh’s stings, some in the courtroom gallery at sentencing, are lining up at lawyer’s offices.

Some suggested this tranche of civil lawsuits by sting victims could be particularly expensive for News UK. “We have noted the threats made after Mazher’s conviction of civil claims against this company in relation to his previous work,” said a News UK spokesperson. “Should such claims be brought, they will be vigorously defended.” News UK is a wholly-owned subsidiary of News Corporation, the publishing company principally owned by the Murdoch family. It was renamed from News International after the closing of tabloid News Of The World, part of the long, inglorious and expensive phone-hacking saga.

Coincidently, News Corporation’s Dow Jones publications, announced, badly, at the end of last week that layoffs are coming, reported Reuters (October 21). Rather than turn the task over to an overworked HR staff, Wall Street Journal (WSJ) editor-in-chief Gerard Baker blanketed employees by email. Everybody in the WSJ news division worldwide - including managers - have been offered a “enhanced voluntary severance benefit” to get that head-count down before turning to “involuntary layoffs.”

To encourage folks to come to the head of the exit line, the special deal promised one and a half times the “standard” Dow Jones redundancy package. All folks have to do is send a one-line email to the HR department by the end of October. The company retained the right to hold onto certain employees.

Mr. Baker’s email was copied to sister publication Barron’s president Ed Finn, who had not previously been appraised of the WSJ severance package offer. Mr. Finn had not quite yet announced a layoff round at Barron’s, planned to offer the standard Dow Jones exit package. He fired off a “what’s up with this?” email. As it would happen in the internet age, he hit the reply-all button ensuring much more work for the HR department.

News Corporation split-off the 21st Century Fox entertainment and television division into a separate publicly-traded company in 2013, the Murdoch family maintaining voting control and senior executive roles. Both companies continue to do what big companies do; buy, sell and trade. News UK acquired earlier this year radio stations in the UK and Ireland. Sky News Australia is to become wholly-owned by News Corporation as venture partners exit. News Corporation exited the New Zealand Media and Entertainment joint venture.

The ambitious and adventurous deals that characterized News Corporation - and Rupert Murdoch - are now but a memory. The 2005 acquisition of social media portal MySpace for US$ 580 million might have eclipsed Facebook if not for internal confusion. It was sold six years later. The US$5 billion acquisition of Dow Jones, WSJ publisher, in 2007 still shows signs of financial stress. A US$80 billion bid through 21st Century Fox for Time Warner went nowhere, anti-trust issues looming large. Time Warner and telecom giant AT&T agreed to merge this past week, shareholders to receive US$85 billion plus change subject to appropriate regulatory approvals.

The AT&T Time Warner deal underscores the vulnerabilities of 21st Century Fox at a time when telecoms are investing heavily in the content-producing television companies. The Comcast acquisition of NBCUniversal in 2011 was but the first. And mobile media delivery of video content is not simply the future, it’s the present.

21st Century Fox has limited options. Deep as it’s production capacities are, distribution is king of the realm. The highly profitable US Fox News franchise, which throws off US$1.5 billion a year, is under threat as its ageing audience becomes less attractive to advertisers. The Murdoch family has indicated no interest (so far) in offering up the company to other telecoms (Verizon already bought AOL, the Yahoo acquisition in process) or, horror of horrors, a mobile technology giant. Apple, reportedly, bid for Time Warner.

See also in ftm Knowledge

Rupert Murdoch and News Corporation

News Corporation is a highly competitive media giant a global, multi-media footprint. From paywalls and pay-TV to tabloid troubles and new ventures the media industry watches Rupert Murdoch. Update includes family ties, succession plans and other News Of The World. 210 pages PDF (September 2012)

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