From Rogue Reporter To Rogue Company

Michael Hedges September 5, 2011 Follow on Twitter

Institutions take to aging much like the people who direct them. Few are content riding off into the sunset, warmed by fulfillment and humbled by knowledge. The quest, the game, becomes the elixir. Would that it be so easy.

As certainly as summer turns to autumn, the trials and tribulations of Clan Murdoch and its media empire gather apace. Four former senior News International executives will appear beginning this week (September 6) before the UK House of Commons Culture, Media and Sport Select Committee, answering to ongoing inquiries on corporate governance and ethics. Their testimony is widely expected to cast dispersion on testimony given by News International Chairman James Murdoch and News Corporation Chairman Rupert Murdoch before the same committee in July, shortly after UK tabloid News Of The World was shuttered.

In that hearing Clan Murdoch, essentially, threw all the “underlings” under the bus. Very little about phone-hacking and pay-offs to police trickled upstairs, they said. Subsequent revelations widely reported in UK media outlets not controlled by News Corporation continue to indicate otherwise. The Metropolitan Police arrested the sixteenth individual (September 2) on suspicion of “perverting the course of justice.” When the phone-hacking entanglement first came to light, News International blamed a single “rouge reporter.”

Coincident with the Culture Committee hearings, a separate inquiry into media ethics at the Royal Courts of Justice gets underway as Lord Justice Leveson hears arguments to determine which organizations, media or otherwise, will be considered “core participants.” UK Prime Minister David Cameron empanelled six worthy citizens – all “formerly” with regulator OFCOM, the police, newspapers or commercial television – to sit with the Lord Justice, a former prosecutor, to root out evil media. PM Cameron extended the inquiry’s remit to include broadcasting and social media, perhaps to spare Clan Murdoch from the full blast.

That heat, arguably, could roast PM Cameron. Early on in the phone-hacking saga, his former spin-doctor (“communications director”) former News Of The World editor Andy Coulson was implicated and punished. That News International continued to compensate Mr. Coulson – and pay legal expenses – while he worked for the Conservative Party, which he did not declare, raised questions about a special relationship between Clan Murdoch and the politicians. PM Cameron denied knowledge of News International’s payments to Mr. Coulson or, to a growing extent, Mr. Coulson’s existence. The UK Electoral Commission declined to review.

PM Cameron has had few successes at managing the public agenda of late, leading some to suggest he sorely needs a spin-doctor of Mr. Coulson’s talent. In the aftermath of the August London riots, he spoke out against “people using social networking sites to provoke violence” and, channeling that paragon of free speech and assembly Belarusian President Alexander Lukashenko, called for authority to cut off the internet and track down smartphone users. After a meeting with several social media providers (August 25), the UK government backed down. PM Cameron again fell foul attempting in an interview (September 2) to characterize the BBC’s coverage of the riots as “mush.” 

On PM Cameron’s ascendancy Clan Murdoch made clear their expectation that the new government approve the BSkyB takeover and shrink the BBC. It hasn’t gone well. Under pressure, News Corporation abandoned the bid for the BSkyB stake it doesn’t already own in July. Sensing opportunity, opposition politicians sought legal authority to block a renewed bid for BSkyB, at least until the Leveson inquiry is completed in mid 2012.

UK media regulator OFCOM has its own inquiry going. Taking the broad brush, it is parsing the legalese of “fit and proper” in an attempt to define the context of media ownership. The English word proper derives from the French word for clean.  

The number of major and minor celebrities, politicians and assorted other hangers-on claiming their phones were hacked by unscrupulous reporters has grown by a quantum. Like those in 1970’s America who relished being on Richard Nixon’s “enemies list” it’s a cause célèbre. And knowing one is almost as good as being one, certainly fitting in the tabloid era of reality TV and twitteratti. Lawyers daring to represent alleged phone-hacking victims were, according to one, investigated by private eyes in hopes of turning up an “unfair advantage” in the lawsuits against News International, reported the Guardian (September 3).

The impact of all this on News Corporation has been stunning. In a US Securities and Exchange Commission (SEC) filing (September 2), the company reported Rupert Murdoch’s compensation rising to US$ 29.4 million. James Murdoch’s compensation rose to US$ 11.5 million, though he declined a US$ 6 million bonus “in light of the current controversy surrounding News Of The World.” The company’s annual shareholder meeting will be held, notably, at 21st Century Fox studios in October. When the UK tabloid News Of The World was closed it was revealed that UK newspapers contribute but 1% of total company profits.

Mr. Murdoch – The Elder – has given no indication of riding off into the sunset.

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)