THREE major themes come to mind with regard to the Murdoch empire’s scandal.
First, Rupert Murdoch’s power and credibility has taken perhaps an irretrievable knock in the UK, while his reputation has been severely damaged in the US and Australia.
Second, News Corporation shareholders are alarmed that the family management and board of directors of the multi-billion-dollar company have failed to do their duty.
Third, the alleged criminality within tabloids of News International, News Corp’s UK division, threatens to curb press freedom. The main overall concern within Britain and indeed Europe is that the cloud of secrecy could darken.
Hypocritical Politicians Lustful For Revenge
All UK political parties who used to suck up to Rupert Murdoch are now in a frenzy of revenge with much humbug. The hacking scandal first surfaced in 2003 and Rebekah Brooks, who resigned last week as News International chief executive, admitted at the time that the police were bribed. She was arrested but not charged on Sunday.
British political leaders turned a blind eye as they feared that News International publications, The Sun, The News of The World and possibly The Times, Sunday Times and Sky News, would turn against them. British Prime Minister David Cameron has now revealed that Rupert Murdoch was the first media guest in Downing Street after last year’s general election. He also disclosed that he dined with Ms Brooks last December when News Corp’s bid for British Sky Broadcasting was already controversial. He also admitted that Andy Coulson, his former media chief, stayed the night at Chequers, the prime minister’s official country residence, after he resigned in March. The timing was extraordinary. Mr Coulson had departed because of new revelations about hacking when he was News of The World editor. Mr Coulson is currently on bail after being arrested without charge in recent days. Top Scotland Yard chiefs have resigned following allegations of police corruption. Former Labour leaders, Tony Blair and Gordon Brown, were no different from Mr Cameron. They pandered to the Murdoch family and Ms Brooks.
So is the political game for Rupert Murdoch finished? Don’t bet on it. The likelihood is that when the next election arrives, politicians, anxious to get votes, will grovel before the media, including News International.
News Corp’s Pathetic Management & Governance
The second theme is the poor management and corporate governance surrounding the scandal. For a news organisation committed to exposing corporations and individuals, the cover-ups, denials and outright lies have been astounding. Ten employees, including Ms Brooks and Mr Coulson, have been arrested. The News of The World, a profitable paper, has been closed down and several hundred people have lost their jobs. Redundant journalists are hoping that The Sun will be published on Sunday.
In the year ended June 2010, the global publication division accounted for only 13 per cent of total News Corp’s pretax profits and analysts estimated that News International’s share was tiny.
Reputation for a media company is all-important, and management allowed the problem to fester until Big Daddy, 80 years of age, arrived in London last week. Only then did top executives fall on their swords. His son James, so far, has dodged the blade but shareholders are pointing their sabres at him.
The forced abandonment of the US$12.5 billion bid to gain full control of British Sky Broadcasting, the UK’s largest pay-television broadcaster, has scuttled the strategy of raising News Corp’s cash flow. The highly profitable broadcasting division cannot be consolidated into the company. Moreover, News Corp must pay a penalty of £38.5 million (S$77 million) for withdrawing from the bid.
In Mr Murdoch’s favour, however, is that he has kept the loss incurring Times and Sunday Times alive through subsidies costing many millions. That may irritate shareholders, but their survival boosts competition. Those quality titles have broken stories and in many instances have countered the views of the BBC, the statist news and cultural monopoly.
News Corp’s Damage to Media Opens Door For More Institutionalised Secrecy
The third theme, and of major concern to the public, is that alleged criminality within News International has paved the way to stifle investigative journalism.
The Guardian has uncovered the News International scandal and the Daily Telegraph exposed politicians’ fraudulent expenses. Several British politicians have gone to jail and reputations of others have been tarnished. Revenge is in the air. The climate of state and corporate secrecy could increase. For example, the Daily Telegraph broke its important story because of a confidential dossier which led to the jailing of several miscreant Members of Parliament.
Such leaking could become illegal. Andrew Gilligan, now London editor at the Telegraph, lost his job at the BBC after exposing a ‘dodgy dossier’ that played a part in encouraging Tony Blair to join the US in an illegal invasion of Iraq. Mr Gilligan was proved correct. David Kelly, British UN weapons inspector and whistleblower was ruled to have committed suicide, but the mystery surrounding his death continues. Destruction, loss of life, maiming and chaos ensued in Iraq.
The News of The World, for all its sins, has broken true public-interest corruption stories, for example, when Pakistani cricketers were revealed to be taking bribes from bookmakers.
Competitors of News International are gloating but they are not innocent babes in the wood. A shallow celebrity cult dominates the British tabloid press and television. The broadsheets, the so-called quality publications, are desperate to raise circulation and are happy to follow up with titillating stories.
Celebrities from actors to footballers are lifted high and then dumped into the bog all in the guise of the public interest. The Internet, the recession and sliding advertising revenues have raised the pressure for scoops.
Dumbing down and downsizing have become the ultimate downers.