After decades of dominance, the Rupert Murdoch empire, especially its British side, is showing signs of decay. Will the rot make it over here?
In 1969, a young Australian newspaper entrepreneur named Rupert Murdoch bought a British tabloid called the News of the World. The paper claimed that it was “the biggest in the world.” It was a popular Sunday paper that carried human-interest stories, often revolving around such weighty matters as court cases featuring indecent exposure, scoutmasters, or sometimes both.
In 2011, Murdoch closed the same newspaper in the midst of a “phone hacking” scandal arising from a combination of moral turpitude on the part of Murdoch’s executives and gross negligence on the part of the British police and government, who were in thrall to, and sometimes even in the pay of, the Murdoch empire.
The intervening 42 years saw a remarkable arc in the industrial history of mass media, as one man shaped the popular experience of news and entertainment across the globe. He did so through a potent combination of business opportunism and political expediency, and, crucially, through an ability to both cultivate and subvert the establishment in each market he entered. The nickname for Rupert Murdoch in Britain during the time he built his press empire was “the dirty digger,” but Murdoch was a polished character whose rough edges were buffed away by his close and frequent contact with elites. His use of power in the acquisition of business advantage has been a remarkable feature of his rise, and the misuse of his organization’s influence may well precipitate his fall.
It is unsurprising that the Murdoch story has attracted many narrators, and inspired multiple biographies, even before we know how the story ends. David Folkenflik, NPR’s media correspondent, is the latest to add to the literature with Murdoch’s World: The Last of the Old Media Empires. It will be fighting for Kindle bandwidth with journalist Paul Barry’s Sex, Lies and the Murdoch Succession, and comes after at least half a dozen assorted biographical stabs at the infuriating genius.
Writing the history of Murdoch is difficult to do at one or even two paces from the core. Those who have gotten within melting distance of the Sun King often find it hard to keep a clear head. A few, like biographer Michael Wolff or Australian financial journalist Neil Chenoweth, manage to achieve an understanding of either the personal dynamics or the business structure. But it is a life’s work. It helps to be Australian or very, very persistent. Folkenflik spent time in Australia and Britain to flesh out his knowledge of how Murdoch operates, but he is clearly removed from the texture of day-to-day Murdochalia. Much of the reporting in the book takes place around the time of the phone hacking scandal, and Folkenflik attempts to relate contemporary events to a wider thesis about how Murdoch came to wield such influence on three continents. How exactly did the boy from the outback remake the world’s media? Part of the mythology of Murdoch is that he is a quintessential outsider. That myth, often alluded to in the book, is at odds with the reality of Murdoch as we know him: a man who is intimate with the upper echelons of society and understands the levers of power and influence.
What Folkenflik seeks to clarify in Murdoch’s World is the connection between the Australian, British, and American units of Rupert Murdoch’s empire, and how a legal scandal in the UK threatened to undermine the entire, towering operation. It is a useful service for an American audience that has been largely unaware of how transgressive British tabloid behavior might have an impact on the standing of The Wall Street Journal or even Fox News.
In 2006, News of the World correspondent Clive Goodman was charged with illegally accessing the voicemails of members of the royal household. He and private investigator Glenn Mulcaire were subsequently jailed for their activities. At the time, the hierarchy at the News of the World insisted that this was an “isolated incident.” The Guardian’s Nick Davies took a very different view. Between 2009 and 2011, Davies broke story after story on the illegal tapping by Murdoch’s journalists of voicemail messages on mobile phones. In one, he unearthed significant payments made to other litigants that suggested not only that the practice was widespread, but that it was being covered up. Footballers, films stars, celebrities, and politicians began to lodge civil actions against Murdoch and News Corp., and by 2010 News of the World had paid a couple of million dollars to settle with complainants.
But the stories barely aroused attention. Every part of the British establishment turned a blind eye. The proximity of Murdoch’s organization to the police (which it had paid in the past for stories), the government (which it befriended and infiltrated), and even other news organizations (which it either beguiled or terrified) muffled inquiry and outrage. Parliamentarians who were pursuing the story were frustrated by the wall of silence. Labour MP Tom Watson, who pushed the agenda on hacking as much as any politician, told me that for long stretches of those two years, he thought he was “going to end up as unexploded ordnance” that had missed its target.
All of this changed when Davies revealed in 2011 that one phone potentially hacked by the News of the World had belonged to murdered schoolgirl Milly Dowler. This disturbing revelation served as a lightning rod for public opinion. The wrath of advertisers and the rapid spread of a scandal that threatened to lap at the door of Murdoch’s main operation in America drove him to take the pre-emptive action of shutting the paper. (Cynics noted at the time that, while shocking and seemingly inspired by recent events, even the closure might have contained a grain of opportunism; print, even profitable print, is a declining business.)
Folkenflik does a reasonable job conveying the breathless pace of the hacking scandal in 2011, as reputations unraveled and Murdoch struggled to contain the corporate fallout. Where the book is weak is not in the reporting—Folkenflik is a very good media reporter—but in the analysis. His characterization of Murdoch’s relationship to government and establishment power starts from the perspective that Murdoch is essentially an outsider, and an actor who abhors both government power and regulation. Describing Murdoch’s ongoing battle with the environmental lobby in Australia, Folkenflik makes the following observation:
Murdoch comes by that contempt for government intervention by way of personal experience. He is a man whose very history tells him that regulations are designed to trip him up. He is an executive who built up his own empire after seeing his family’s holdings shrink from the taxes levied on his father’s estate. He is an entrepreneur who repeatedly had to win permission to buy television and newspaper properties in all three major English-speaking countries in which he became a dominant presence. He even switched his citizenship in order to satisfy American regulators.
This reading is logical, but perhaps underplays the importance of government to all of Murdoch’s successful ventures. Murdoch and his properties are forever booing and hissing at the public sector; he is a lusty advocate of the free market, he is frequently at odds with communications regulators, and he loathes publicly funded media. His personal Twitter feed is full of pithy aphorisms urging the dropping of regulation and the lowering of taxes.
However, Murdoch’s expedience in dealing with government is a defining feature that distinguishes him from his less successful peers. His engagement with the political process in every country he operates in is intense. Whether being readily received by Margaret Thatcher, his great political ally in breaking UK print unions in the 1970s, meeting with Russian oligarchs on his yacht, or consulting with Chinese party officials, Murdoch maintains close ties to regional power. He leans on the door of regulation so often and because of his facility with establishments, it gives way. Is that something we should blame Murdoch for? No. He is only doing what all business people would do—he is just more efficient and persistent and strategic than most.
Too close, indeed, in the UK, where subsequent governments of opposing parties demonstrated obeisance toward him, his family, and his executives in a startling inversion of the normal patterns of patronage and lobbying. Rebekah Brooks, the former Sun and News of the World editor who is now indicted on hacking charges, rode horses with British Prime Minister David Cameron, who, despite repeated warnings not to, also employed former Murdoch editor Andy Coulson as his head of communications. That was before Coulson also faced charges similar to Brooks. The hacking scandal at the News of the World, once uncovered, did not reveal an organization at odds with the establishment, but one that was indistinguishable from the establishment.
Rupert Murdoch is a product of the Australian establishment himself. His family owned a newspaper business. The Murdochs were a pillar of Melbourne society. His mother was, until her death at 103, a great national figure and philanthropist.
Murdoch may be often portrayed as a business outsider, but when he arrived in London to purchase the News of the World, it is worth noting he did not snatch the property in an aggressive takeover. Instead he presented himself to the owners, the aristocratic Carr family, as a white knight. Murdoch saved the family from being ousted from its ownership by another emigré entrepreneur, Robert Maxwell, who had launched a hostile takeover. Sir William Carr willingly gave Murdoch his full backing as managing director before Murdoch swooped in for the whole company.
In the recent BBC documentary Rupert Murdoch—Battle With Britain, Roy Stockdill, who worked for the News of the World for more than 30 years, bluntly summarized the Carr family’s accession to Murdoch ownership: “They lay there with their legs open … waiting to be screwed.” Those who studied Murdoch’s takeover of The Wall Street Journal from the Bancroft family in 2007 might note the similarities.
Folkenflik takes care to look at the roots of influence within the Murdoch businesses—Fox News in particular. Fox is the mechanism by which Murdoch has most successfully exploited the American market, and its success is worth studying. However, in fitting it into his overall view of Murdoch’s commercial triumphs, Folkenflik sometimes allows his own experiences to unbalance the narrative. He seeks to illustrate the exercise of power within News Corp. by showing how the Fox News press office dealt with media reporters, indulging in several pages of humble-bragging about his own travails. It’s a poor measure of what is important and interesting in the broader story, and belies the fundamental problem with many media reporters and Murdoch—namely, the failure to put critical analytic distance between themselves and the subject. Moreover, witnessing the author wandering in and out of the story as a first-person character can be uncomfortable for the reader, and occasionally gives rise to the suspicion that personal anecdote is being weighted more heavily than it might deserve. Folkenflik gives not much more than a page to how Fox News boss Roger Ailes—a former campaign adviser to New York City Mayor Rudy Giuliani—used his influence with Giuliani to pressure Time Warner Cable to carry the channel on its citywide network. By contrast, the firing of Juan Williams from MPR, after a remark he made while appearing on Fox News, receives almost a chapter. It serves to illustrate almost nothing, but it’s clearly a story to which Folkenflik had closer proximity. There is a missed opportunity here to examine Fox News’s relationship with the modern Republican Party and the role it played in helping to create the ultimately destructive Tea Party. Murdoch’s relationship with regulatory and governmental power within the United States is much less well documented than his negotiation of more centralized regimes in Europe.
In Murdoch’s World, Folkenflik is scrambling to transcribe the anticipated end of a story that, inconveniently for the author, keeps unspooling. Every writer, biographer, or journalist who has tracked Murdoch for the past 40-plus years has been mesmerized by how, with each turn of the cycle, something more colorful, intriguing, and shocking tumbles out. Up to the last page of the book, we feel that the tide of events is about to wash up yet more bundles of drama and bathos. Within two pages of the end of the book, an on-deadline Folkenflik is forced to document events in the summer of 2013, which saw Murdoch effectively chop his company into two units—entertainment and television, and newspaper and publishing—and coincidentally split with his third wife, Wendi Deng.
These paragraphs in themselves deserve a chapter or even a book of their own. The extremely significant events in the life of Rupert Murdoch go to the heart of what is really in tension within the overall business. The desire to construct a family dynasty is the main thing that has consistently clouded Murdoch’s sharp business judgment. His attachment to newsprint is similarly at odds with the realities of operating profitable businesses. They have combined to fracture one of the greatest commercial achievements of the twentieth century.
Family loyalty led to one of the most critical mistakes he made in handling the hacking scandal: delegating operational power for all UK newspapers to his heir apparent and youngest son, James. Though a phenomenally bright executive, James lacked his father’s journalistic gut. His undisguised dislike of the process of journalism, and his inherent lack of interest in what happened on the editorial floor of the newspapers, meant he relied too heavily on corrupt executives like Brooks to give him an honest account of what happened within his own business.
And on the question of Murdoch’s attachment to newsprint, it’s very much worth noting that he has shown little mastery thus far of the post-print media world. I always imagined that the reason News Corp. in general, and Murdoch in particular, struggled to conceptualize and capitalize on the opportunities of the Internet was that it existed in essentially unregulated territory. It was a meritocracy of engineering and ideas, which, at least at the outset, had an anarchic spirit as well as profit motivating its pioneers. Murdoch repeatedly failed to make the right bets on the Web, as his normal compass for finding opportunity in regulated environments was rendered useless. His splashy purchase of MySpace in 2005 for $580 million and subsequent sale in 2011 for $35 million, and the failure of the poorly conceived “app only” magazine The Daily after two years and $60 million, demonstrated that even in the familiar realm of journalism, Murdoch simply did not “get” tech culture.
Distasteful as it might seem, we are all waiting for the end of the story, certain in the knowledge that it can come only with the demise of the central character. As Murdoch has made abundantly clear, he views his death as his retirement date. There is something fitting in the fact that the slow fade of Murdoch’s empire coincides with the decline of print journalism. Murdoch’s love of newspapers, that aggregation of daily fact and opinion, is the thread that runs through his remarkable rise and fall. In the world of Murdoch and media, something noteworthy is happening. We will never again see a company of global reach and financial significance come from a business that was founded on the rumbling of the hot metal presses. It is not clear that Murdoch owns, as the book title suggests, “the last of the old media empires.” But he is the last person who will enjoy the patronage of governments and the wrath of commercial rivals funded by the business and influence of newspapers.
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