Murdoch The Diplomat Lectures The Brits that His Proposed BSkyB Purchase Should Go Through And That His Newspapers Have Done No Wrong

Philip Stone October 26, 2010 Follow on Twitter

The British media and some of the Establishment have put Rupert Murdoch under enormous pressure lately for offering to buy all of BSkyB that he doesn’t already own, and for alleged telephone hacking by his News of the World tabloid. He had a golden opportunity at the inaugural Thatcher Lecture to throw some daggers of his own but, regretfully, it was Rupert the Diplomat choosing his words very carefully.

Murdoch wants his News Corp. to buy the 61% of shares it does not already own in BSkyB, the sole British satellite broadcaster, at 700 pence a share for a total cost of £7.5 billion (€8.2 billion, $11.5 billion) of which about half would be borrowed.  That brought a delayed hue and cry from the British media that finally figured out the nightmare marketing scenarios  if the deal went through  -- being able to bundle  pay TV, Internet  and newspaper subscriptions which is something no one else could do.

So, if you can’t compete, what then? Suddenly the British media said this was too much media control in the hands of one man, that there were big anti-trust issues, and in something near unbelievable newspapers from the far right to the far left wrote a joint letter to the Business Secretary urging he turn down the deal.

So facing that kind of opposition Murdoch could have taken the opportunity to blast back. But instead, in very polite language, he reminded his audience that, “We must celebrate a culture of success. The rise to prominence is too often accompanied by a surge in cynicism by the traditional elites. I am something of a parvenu (someone who has suddenly risen to a higher social and economic class but has not yet gained social acceptance by others in that class),  but we should welcome the iconoclastic and the unconventional. And we shouldn’t curb their enthusiasm or energy. That is what competition is all about. Yet when the upstart is too successful, somehow the old interests surface, and restrictions on growth are proposed or imposed. That’s an issue for my company. More important, it’s an issue for our broader society.

“These are the small thinkers who believe their job is to cut the cake up rather than make it bigger. In my own industry, for example, digital technology is offering a chance for British companies to make their mark here and across the world.”

Or to put it another way, he has made his BSkyB into one big successful company, gambling bankruptcy at the very beginning, and he should now be allowed the fruits  of his success and as for the other media complaining, that’s all sour grapes.

And then there’s the problem of alleged telephone hacking by his News of the World Sunday tabloid which the police and Parliament are now looking into for the second time – nothing much happened after the first investigation but a new report from arch-enemy The New York Times reopened that beehive.  News International has basically stonewalled and says it has done nothing wrong, but that hasn’t stopped it making out-of-court settlements with individuals seeking more information as public court hearings drew close. 

But the closest Murdoch came on that one was to say, “a free society requires an independent press: turbulent … inquiring … bustling … and free. That’s why our journalism is hard-driving and questioning of authority. And so are our journalists. Often, I have cause to celebrate editorial endeavor. Occasionally, I have had cause for regret. Let me be clear: We will vigorously pursue the truth – and we will not tolerate wrongdoing.”

Was that his way of saying, “The past was the past and although nothing happened it won’t happen again”?  Any detection of an apology there?

Because this was a lecture carrying former Prime Minister Margaret Thatcher’s name  it was only natural that he would pay her homage, but there was no doubting, either, how very much he supported her right-of-center economic policies that brought Britain from the throes of socialism into the capitalistic power it is today, and more specifically allowed him at the time to break the backs of the unions throttling his newspapers. By a quirk of timing his lecture came just one day after the new Conservative-Liberal Democrat coalition announced government spending cuts of more than £80 billion (€86 billion, $120 billion) with expected job losses in government sectors expected to be around 500,000.

His message to the British government was basically, “Right On!” (a sublime message to President Obama?)  “The new prime minister has come to office inheriting a daunting deficit. I am encouraged by his response. Many rightly applaud the coalition government for maintaining a tough fiscal line. We must be clear why this toughness is necessary. It is not a numbers game. It is about livelihoods, and eventually rebuilding opportunities and greatness. Strong medicine is bitter and difficult to swallow. But unless you stay the political course, you will be neither robust nor popular.”

The four UK Murdoch national newspapers, led by the market-leading daily tabloid Sun all supported the Conservatives in the May general election. The Conservatives didn’t get enough votes to govern by themselves and so formed a coalition with the much smaller Liberal Democrats, but without Murdoch’s support would they have even gotten that far?

There is a general feeling in the UK that Prime Minister David Cameron worked very hard to court Murdoch -- five years earlier Murdoch supported the Labor Party and Labor won the general election. Cameron then became the new Conservative Party leader and at first Murdoch was said not to be too impressed, but Cameron worked hard on him, hosting private dinners and the like. At the same time Labor wasn’t too friendly to Murdoch properties – among other things it made his BSkyB sell shares at a huge loss that had been bought in the competing ITV commercial network --  and eventually Murdoch became a Cameron fan. With Cameron eventually in Downing Street who was among the first to have a private audience there – why none other than Murdoch!

So, having worked that hard to get Murdoch on his side Cameron certainly isn’t about to throw that support away. Murdoch has signaled his newspapers approves the budget cuts, and any more to come,  but does  Murdoch  expect more in return – like having the coalition government approve his BSkyB purchase?

But however the game is played, it’s obvious Murdoch continues his media love affair. “When The Times was founded in 1785, its influence was confined to a handful of important people in this city (London). Today, its content echoes around the world every day. And it has digital competitors who were not even conceived a decade ago. In the past, too, television programs were confined to a single screen. Now they can be watched whenever you want and wherever you are – whether on a mobile phone, a tablet or a computer. For all the change, we are still at the early stages of this revolution. It’s not just media. This is an exciting period in every sector. And our competitive passions should be stirred by the sense of challenge and opportunity.”

Now that’s probably something that all can agree upon.

See also in ftm Knowledge

Rupert Murdoch and News Corporation

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