07.07.11 10:37 AM ET
Knives Out Against Murdoch
For Rupert Murdoch it’s contrition time. In a statement on Wednesday, the media mogul said behavior of staff at his British tabloid, the News of the World, had been “deplorable and unacceptable.” Police could expect full co-operation in their inquiries into the phone-hacking scandal that’s rocked his British operation, News International, and “important steps” had been taken to ensure that illegal practices were never repeated. A powerful player in British politics for more than 40 years, Murdoch knows that a recognition of wrongdoing is now vital.
But the harm is done. One glance at the British press suggests a deepening outrage that apologies won’t satisfy. Among the latest crop of allegations: hackers paid by the News of the World tapped into the phones of the relatives of servicemen killed in Afghanistan and Iraq, as well as the families of victims of the 7/7 terrorist bombings in London. (The timing of the revelation is especially unfortunate: Thursday marks the sixth anniversary of the attack).
Already, the paper stands accused of intercepting messages left on the voicemail of a murdered schoolgirl in 2002. Barely less damaging, it’s now claimed that the News of the World illegally paid police officers for information. Reflecting the national mood, Prime Minister David Cameron denounced the behavior of the News of the World as “absolutely disgusting” on Wednesday.
The fallout will be widespread and unpredictable. According to the Times of London, the Murdoch flagship daily, which ran four pages of coverage of the affair in Thursday’s edition, the arrest of five journalists and newspaper executives was likely “within days.” That could be just the start. In parliament on Wednesday, Cameron promised a wide-ranging inquiry into media standards once the police investigation were completed.
Some commercial damage looks certain for Murdoch. A slew of leading companies, including car maker Ford and Richard Branson’s Virgin Holidays have canceled or suspended all advertisements in The News of the World in protest. Investors too are taking fright. On the New York stock market, shares in Murdoch’s News Corp fell 4.7 percent on Wednesday, wiping $2.5 billion off the group’s value.
But the greatest harm may be the loss of political clout. Ever since Murdoch began building his British empire in the 1960s commentators and rivals have deplored the far-reaching influence of a foreign tycoon who has come to control almost 40 percent of the national media. For Murdoch’s editors, their ability to sway election results has been a source of pride. When the Conservative party unexpectedly triumphed in the 1992 election, the down market tabloid The Sun famously ran the front page headline: “It was the Sun Wot Wun it.”
But whatever their private feeling, politicians have been keen to befriend a critical power-broker. Before reaching Downing Street in 1997, Labour leader Tony Blair assiduously courted Murdoch, flying out to Australia to address a gathering of News Corp. executives in a successful attempt to persuade Murdoch to switch allegiance from the Conservatives, a decision later reversed. Both David Cameron and Labour leader Ed Miliband attended News International's summer party in London earlier this year.
Now the knives are out. In parliament on Wednesday, members queued to vent their anger. In the words of Simon Hoggart, a commentator from the Guardian newspaper, which has led the probe into the hacking affair: “For years MPs have been terrified of the Murdoch press—terrified they might lose support, terrified, in some cases, that their private lives might be exposed. But that has gone. News International has crossed a line and MPs feel, like political prisoners after a tyrant has been condemned to death by a people's tribunal, that they are at last free.”
One likely consequences could be a nasty check to Murdoch’s expansion plans. In the teeth of fierce opposition, he’s been seeking to buy outright control of the country’s largest independent broadcaster British Sky Broadcasting, a deal that looked set to win government approval. That’s no longer assured. Under law, the media regulation authority, Ofcom, can nix the takeover if the purchasers are not deemed “fit and proper persons.” A show of contrition may not be enough to convince the regulators that Murdoch and his lieutenants fit the description.