News Corp No Longer Under Rug Swept

Michael Hedges July 19, 2011 Follow on Twitter

There is no thrill greater than walking right up to that edge, wiggling your toes over it. Some people feel it when jumping out of a perfectly good airplane. Landing, intact, is reward of the metaphysical kind. Worrying about bad things and consequences are for wimps and little people.

As media giant News Corporation and the British government careen toward an ultimate phoenix moment there is no longer a moment for quiet reflection or, even, damage control. After resigning (July 15) as chief executive of News International, the UK newspaper publisher owned by News Corporation, at the end of last week Rebekah Wade Brooks was arrested (July 17) and questioned by the Metropolitan Police for more than four hours. It was one of those uniquely British “by appointment” interviews with police, oddly taking place on Sunday, as Ms Brooks was informed on Friday after tendering her resignation. On arrival, she was arrested, becoming the tenth person charged in the phone hacking and police bribing scandal since January.

Ms Brooks was scheduled to appear along with Rupert and James Murdoch in front of the House of Commons (July 19) to answer questions from Members of Parliament, again, by invitation. At first Rupert and James Murdoch begged off; prior engagements, you know. Ms Brooks, at that point still tasked with damage control, would fend off questions from politicians previously terrified by News International’s editorial pages. The Murdoch’s, political winds blowing hot, decided to appear. It’s now questionable if Ms Brooks will join them; British law has some protection against self-incrimination. After the police interview Ms Brooks was released on bail.

When Rupert Murdoch blew into London a week ago to “take charge” of the problem for the second or third time, the News Of The World tabloid was closed and the bid to take complete control of pay TV operator BSkyB shelved. Asked about his priority, The Elder said, “This one,” nodding to Ms Brooks, considered one of his favorites. We now understand what he meant. Ms Brooks was editor of News Of The World during the heady days of hiring private investigators to spy on everyone and anyone. The pay-out must be astronomical.

Another News Corporation lifer, Sky Italia CEO Tom Mockridge, was named to replace Ms Brooks at News International. Like so many News Corporation executives, Mockridge is highly respected. He turned Sky Italia into a market leader where the main competitor is Silvio Berlusconi. He’s also been overseeing the German pay-TV company Sky Deutschland. The grand plan to create a pan-European HBO under the Sky brand fell to tatters when the BSkyB deal collapsed.

The nexus of this story has, indeed, moved from one of the unsavory tendencies of an aggressive tabloid newspaper owned by an aggressive, often self-righteous, media giant to allegations of a corrupt relationship between a media organization and public officials. The first stop on that particular journey has been allegations that the Metropolitan Police failed to fully investigate the phone hacking charges and that may have been due to certain incentives provided by News International. Just as Ms Brooks was being arrested and questioned, Metropolitan Police Commissioner Sir Paul Stephenson resigned quite abruptly. The Assistant Commissioner of the Metropolitan Police John Yates resigned the following day (July 18). Yates made the decision not to reopen the 2009 phone hacking investigation.

Stephenson faced mounting criticism over a cozy – and lucrative, for some – relationship between the police and News Of The World. There’s that little bit about a 20 day spa visit, an invoice for which was just never sent. Stephenson hired a former News Of The World editor as his PR man, just like Prime Minister David Cameron. On his way out the door, Sir Paul warned the Prime Minister could be “compromised” by the well-understood relationship with News International. Mr. Cameron promptly cut short a diplomatic mission to Africa to try to get his arms around the political mission at home.

That hit single about a tawdry relationship by Alanis Morissette, Hands Clean (2002), comes to mind: “Ooh this could get messy but you don't seem to mind. Ooh don't go telling everybody and overlook this supposed crime.”

The Murdochs – pére et fils – will sit before the UK House of Commons on Tuesday. A coach has been hired to advise The Elder. Ms Brooks had been invited but, in light of her current legal difficulties, might not be able to answer many direct questions. Mr. Cameron will stand before MPs on Wednesday.

News Corporations in-house PR machine – that would be all of News Corporation – steadfastly maintains the phone hacking incidents were small potatoes and a few payments to police officers just the normal cost of doing business. Everybody does it. Anyway, they say, dastardly competitors – other UK newspaper publishers and, of course, the BBC – have  “commercial and ideological motives,” said the Wall Street Journal in an editorial (July 17).

Ah, lest we forget, long time Murdoch employee and Dow Jones CEO Les Hinton resigned (July 15) just hours after Rebekah Brooks tendered her resignation. Dow Jones publishes the Wall Street Journal and Hinton was brought in from News International to run it after News Corporation bought it in 2007. Considered the Rosebud of Rupert Murdoch’s career, the Wall Street Journal, always quite conservative on its editorial page, has take a sharp turn to the right throughout, mirroring News Corporation’s notoriously teabagging Fox News. “We shudder to think what the Journal would look like today without the sale to News Corp.” said the WSJ editorial. It’s true.

With the deal to buy complete control of pay.-TV company BSkyB dead for the foreseeable future, the UK newspapers in disarray and gathering spoilage in the US business, it’s fairly clear News Corporation is a company in challenge. It has been, for good or ill, a company that has lived on the edge. The payoff has been enormous for the Murdoch’s, investors and many employees. To be fair, many readers and viewers have enjoyed its products immensely.

But it’s too big. When he boat is too big for the captain to see both ends it trouble, a favorite management consultant cliché. Over the last several years the Murdoch’s have reached beyond their grasp, giving attention – and money - to the tentacles rather than the body.  The end of the story is becoming more obvious every day.

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. 172 pages PDF (April 2011)

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