Why Do British Prime Ministers Insist On Keeping Their Meetings And Discussions With Rupert Murdoch Private?

Philip Stone February 8, 2008

One would think that a British prime minister is the most powerful person in the UK, but with Gordon Brown and Tony Blair both having tried hard to keep their Rupert Murdoch relationships secret there is the perception that if Murdoch is not the most powerful person in the UK, then certainly he is the most feared.

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Murdoch is the publisher of four UK national newspapers – the largest circulation daily Sun tabloid, the largest circulation News of the World Sunday tabloid, the prestigious Times compact, and The Sunday Times with the largest Sunday quality readership. He admits to be hands-on with the tabloids and they will endorse in a general election whom he wants, and while he keeps at arm’s length with the other two on editorial matters he is, still, the publisher and not without influence.

If a general election was close in the polls, it is believed in British political circles that the Sun’s endorsement could well be the swing vote. And that makes Mr. Murdoch a very powerful and feared man in UK political circles.

(No one forgets how back in 1992 The Sun campaigned hard against Labor leader Neil Kinnock and for Conservative John Major. Kinnock was expected to win. On the election day The Sun declared on its front page in large type, “If Kinnock wins today will the last person to leave Britain please turn out the lights.” The next day, with Major triumphant, the Sun claimed, “It’s the Sun Wot Won it.”)

UK prime ministers apparently don’t like to admit out loud how influential Murdoch may be in the policy decision-making process so they try and keep their discussions secret. The Independent newspaper, therefore, filed a Freedom of Information request with Downing Street asking for details of such meetings between Brown and Murdoch and was told, “We do not hold any minutes of any meetings or other interactions” between the two men.

So imagine everyone’s surprise when it became known that the two men met at the Prime Minister’s country residence, Chequers, on the weekend of October 6-7, the very weekend that Brown made the decision not to call for an early election in November. Could it be that Murdoch told him if he did call for an election his newspapers wouldn’t support him, or did Brown just plain ask Murdoch’s advice on how he thought such an election would go?  Enquiring minds would love to know – we never will -- but the timing of the meeting and Brown’s decision not to go for the early vote certainly has tongues wagging.

Brown also has another close relationship with Sir Richard Branson of Virgin fame, and that relationship may just have cost Murdoch hundreds of millions of pounds. Murdoch and Branson were at loggerheads over BSkyB’s taking a 17.9% share holding in ITV back in 2006 which basically put an end to Virgin Media’s attempt to buy ITV.  Branson, ranked by The Sunday Times as the UK’s 11th richest man with an estimated £3.1 billion fortune also holds an 11% stake in Virgin Media making him the largest shareholder,  was furious at Sky’s intervention and he hollered long and loud for a competition inquiry.

So there is the government  caught between two powerhouses in British society -- who to support?  Sky’s ITV purchase did not get a very good press, and so the government decided to let the regulators take a look, they in turn decided the deal affected the plurality of news and seemed as good as a merger and that forced the government to toss the issue to the Competition Commission which in turn came down hard on Sky forcing the government minister responsible for such things to order Sky to divest its holdings in ITV to less than 7.5%.

Sky paid a market premium to get the shares at 135 pence each – a £940 million $1.8 billion, €1.2 billion)  investment  -- and since then ITV shares have dropped to the 60 – 80 pence level (depending on volatility, rumors of a private equity putting in a bid for ITV, etc. etc.) forcing  Sky to write down the value of its ITV stake by £343 million ($685 million, €455 million), giving  the company a loss for its fiscal first half.

The Communications Act actually has what are unofficially called Murdoch clauses that specify large media companies can buy no more than 20% of broadcasters, so Murdoch figured his 17.9% of ITV fell into that watershed. The Competition Commission, however, wasn’t having anything to do with artificial percentages and merely said the investment lessened UK television competition. John Hutton, the Secretary of State for Business and Enterprise and Regulatory Reform, then ruled Sky must divest itself of enough ITV stock to bring its holdings to less than 7.5% (another artificial percentage?) Sky hasn’t said yet whether it will appeal, a costly and usually unsuccessful process.

Alistair Darling was the trade and industry secretary who got the regulators involved in the first place, perhaps indicating more fear of Branson than Murdoch. When Brown became Prime Minister he promoted Darling to Chancellor of the Exchequer (finance minister) considered the second most important job in government so going against Murdoch did Darling no harm in Brown’s eyes.

Indeed much is being made of a “special relationship” between Brown and Branson. They sat next to one another on the plane carrying Brown and a planeload of British executives to India on a recent trade promotion trip . Brown has appointed Branson to his new Business Council and he has also visited Branson’s home.

Perhaps because of all this it behooves Brown to mend fences with Murdoch as he can  although the ITV decision came after the October meeting. In Brown’s favor is that although Murdoch is right of center while he is left of center, Murdoch is not terribly impressed by David Cameron, the leader of the Conservative opposition party.

In a radio interview a couple of years back when Cameron first came on the scene Murdoch exclaimed, "I've had a couple of very charming meetings with him, he's very bright. He's put together a more impressive front bench than was there before, but it seems to be all about image. I would really like to know a little bit more about what his vision is for the future of this country and his people. You know, some facts and some real policies rather than just a lot of almost throwaway positions they take to change their image - so much so that if you believe everything he says, there's not going to be an alternative between him and a New Labor government certainly".

And at the same time,with Brown still many months away from the premiership, Murdoch said, “I like Gordon very much and I share a lot of his values. The Calvinist background I guess... Scottish blood, you know he does seem to believe in the work ethic."

Murdoch’s relationship with Tony Blair was very secretive and the media had tried unsuccessfully for months under the Freedom of Information Act to get the details, but Blair’s office never released the information. Brown’s relationship with Blair was said to have been awkward at best, so it seemed a bit of  payback time that the day after Brown became prime minister that Downing Street released information on Blair-Murdoch phone calls – particularly catching the eye that Blair spoke three times with Murdoch in the nine days before the Iraq invasion. Did Murdoch encourage a wavering Blair; was Blair making sure Murdoch would support such a move? Doubtful we’ll never know.

Blair worked at keeping good relations with the Murdoch camp. He  often participated  in News Corp. functions (Pebble Beach, California in person, participating by satellite link with a Tokyo conference partly sponsored by The Times and so on) and there were said to be many telephone conversations. How long will it be before he is invited to join the News Corp. board?

The board money will certainly be welcome.  Blair and wife Cherie are being roundly criticized these days for the money they are making off speaking tours, those funds necessary to pay off some £20,000 ($40,000, €26,000) a month for five mortgages.  Blair has already been named, at reportedly $1 million a year  as a senior adviser to  JP Morgan Chase,  the same bank chosen to run the Trade Bank of Iraq.

Alistair Campbell, Blair’s Downing Street  press spokesman, recently wrote in his tell-all book of the Blair years that Blair did not welcome questions about his Murdoch relationship, especially questions on whether Murdoch lobbied him. The obvious question is why, something to hide?

The basic view today seems to be that its quite natural for leading politicans, including prime ministers, and media magnates to talk from time to time. Such is life. But why go to such lengths to keep it a secret?

It’s all about perception.