Business Maverick, Media, Politics

Decline and fall of the Murdoch Empire?

Decline and fall of the Murdoch Empire?

The headlines are happening so fast that it’s nigh impossible to get a comprehensive reading of the situation. One thing seems clear, though – Rupert Murdoch is in deep, deep trouble. The News of the World phone-hacking scandal seems to have exposed a weakness in the media mogul’s formerly impenetrable defences, and all his old enemies will now be gathering for the kill. By KEVIN BLOOM.

Rupert Murdoch has for decades been up near the top of the list of the world’s most hated media barons. Journalists – those who don’t work on his papers, and many more who do – hate him for the contribution he’s made to the trivialisation of their profession. The British intelligentsia hate him for hi-jacking their country’s political system. The American Left hate him for starting Fox News. The IRS hates him for dodging hundreds of millions of dollars in corporate taxes. Australians hate him for becoming an American. His ex-wives hate him for the fact that he regularly traded them in for newer models. Other media moguls (most notably Arthur Sulzberger Jr. of the New York Times Co.) hate him for publicly emasculating them. And in the last few years, while you can’t exactly call it hatred, even his advertisers have started to develop a distaste for him.

As of Thursday afternoon 7 July, it was this last part that was grabbing the headlines in one of the largest media scandals in living memory. News of the World, which earlier in the week was accused by Scotland Yard of illegally hacking teenage murder victim Milly Dowler’s phone, typically accounts for almost £40 million in annual News Corporation revenues. When car manufacturer Ford announced on 6 July that it was suspending all advertising in the newspaper pending the outcome of an inquiry into the allegations, that number wasn’t immediately under threat. But then on 7 July Lloyds Banking Group, Vauxhall, The Co-operative Group, Virgin Holidays and Renault said they were following suit. It was expected that other firms, including Currys, PC World, T-Mobile and Npower, would join the embargo shortly – which they no doubt would have, had Rupert’s heir apparent James Murdoch not announced that the 168-year-old tabloid was to go to press for the last time this Sunday.

Photo: Chief Executive of News International, Rebekah Brooks, listens to speeches during the Conservative Party conference in Manchester, northern England in this October 6, 2009, file photo. News International Chairman James Murdoch said on Thursday he regretted the phone-hacking scandal that has led to the closure of the News of the World tabloid and defended his chief executive Brooks, a former editor of the paper. REUTERS/Phil Noble

What’s incredible is that the advertisers can’t take much of the credit for the move. Symbolic as it was of growing public revulsion, theirs was just a story on the front pages for a few hours. Other headlines revealed that News of the World reporters might have hacked into the phones of families of slain British soldiers, as well as victims of the 2005 subway bombings. With the announcement of the paper’s closure, the New York Times averred that Murdoch was simply trying to remove a possible obstacle to News Corp’s takeover of British Sky Broadcasting; it also quoted a source who said the scandal gave the boss an excuse to do something he was planning to do anyway: “[Turn] his flagship Sun tabloid into a seven-day operation, preserving his lucrative share in the Sunday newspaper market while decontaminating the brand by removing its association with The News of the World.”

But then this morning, 8 July, came the headline to beat all others. “Andy Coulson to be arrested over phone hacking,” proclaimed the Guardian. The former editor of News of the World, who’s consistently denied involvement in the scandal, is of course the same man who resigned as David Cameron’s director of communications in January. To call his arrest a major embarrassment for the Conservative Party is an understatement. “A toxic combination of problems is building up for David Cameron in the wake of the phone hacking scandal and the closure of the News of the World,” The Independent observed, more to the point. “The announcement does nothing to ease the pressure on the Prime Minister on a series of fronts. He is looking to answer charges that hiring Andy Coulson as his director of communications was a disastrous error of judgement and that he remains too close to Rebekah Brooks, News International’s embattled chief executive.”

Photo: Andy Coulson, former News of the World newspaper editor and former Prime Minister David Cameron’s director of communications, leaves the High Court in Glasgow, Scotland December 9, 2010. REUTERS/David Moir

In the Guardian piece announcing Coulson’s arrest, it was noted that “a second arrest is also to be made in the next few days of a former senior journalist at the [News of the World].” That person, whose identity is known to the Guardian but is being kept secret, may well be the aforementioned Brooks. If so, something unthinkable is about to happen to Rupert Murdoch – Brooks, who was editor of News of the World at the time of Milly Dowler’s murder (she was then known as Rebekah Wade) is practically his surrogate daughter; to watch the British authorities arrest her, after his steadfast refusal to let her take the fall, would be to sustain a very serious and very personal blow.

Which begs the question: could we be witnessing the decline and fall of the Murdoch Empire? While a conclusive “yes” may be pushing it right now, it’s worthwhile noting that this week isn’t the first time a Murdoch brand has been the target of a boycott by advertisers.  In 2009, when conservative US talk-show host Glenn Beck said on his Fox show that Barack Obama revealed himself to be a “deep-seated racist,” 20 companies swiftly pulled their ad dollars from the programme, amongst them Wal-Mart, Best Buy, Travelocity, Progressive Insurance, Sargento, Radio Shack and CVS. What was different then was that the embargo didn’t appear to have an overall effect on Fox’s revenues – most of the advertisers simply placed their campaigns elsewhere on the channel. Still, last week, after Beck resigned from the show, liberal commentators were quick to point out that he was fired by Fox because he was no longer capable of making money for them.

The US progressive media watchdog group Media Matters, who in the last few years have mercilessly attacked Beck and Fox, seem to be celebrating wildly. “Like Nixon during his Watergate demise,” they stated on 7 July, “the hacking story appears to have thrown Murdoch into a free fall with no safe landing spot in sight. There doesn’t seem to be any maneuver or strategy available to him at this crucial juncture that will make the blockbuster story go away, even for a price. And like Nixon, whose aides couldn’t stop the Watergate bleeding, Murdoch is being hounded by a dogged newspaper determined (and perhaps able) to take him down, as well as by aggressive prosecutors.”

Importantly, those words were written before Andy Coulson’s arrest. The newspaper that Media Matters was referring to is the Guardian, and to back themselves up they provided a link to a story by the influential Vanity Fair and Adweek contributor Michael Wolff, who wrote – in a piece in Adweek entitled “The Devil’s Due: Will the Guardian bring down Rupert Murdoch?” – the following: “The Guardian – also the paper of WikiLeaks – is having what can only be called its Watergate moment, and its editor, the Delphic Alan Rusbridger, his Ben Bradlee moment.”

It’s all quite unbelievable, yet it’s just possible that over the coming weeks Media Matters and Wolff will be vindicated. Because what we still have to see is how many more News Corp senior executives get taken in by the British police, and whether these people then decide to make things easier for themselves by naming further names and misdeeds.

Also, lest we forget, there’s that long list of Murdoch haters mentioned above. You can bet they’ll each be waiting to greet him on his way down. DM

Read more:

  • “Andy Coulson to be arrested over phone hacking,” in the Guardian;
  • “Cameron faces storm over BSkyB ruling and the company he keeps,” in The Independent;
  • “Murdoch Closing Tabloid Linked to British Hacking,” in the NYTimes;
  • “Murdoch’s Watergate Unravels,” in Media Matters;
  • “The Devil’s Due: Will the Guardian bring down Rupert Murdoch?” in Adweek;

Photo: News Corporation CEO Rupert Murdoch attends the eG8 forum in Paris, May 24, 2011. The eG8 forum will gather “leaders of the Internet” to consider and discuss the future of the Internet and society. REUTERS/Stephane Mahe.


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