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Will Rupert Murdoch really jettison James as NewsCorp’s heir?

October 19, 2011

It’s possible that Rupert Murdoch allowed himself the ghost of a smile on hearing that Michael Wolff – one of his most vociferous and tiresome tormentors – had been defenestrated from his fastness at AdWeek.

We might like to think of AdWeek as a trade magazine covering the US advertising, media and marketing scene. But for the past year it has been hijacked by Wolff’s anti-Murdoch agenda and shamelessly exploited by the former editorial director as a scandal-sheet covering every last detail of the so-called “Murdochcalypse”.

Murdoch will have been a good deal less pleased by what he read in the New York Times yesterday. Wolff is a gadfly, but the NYT is a seriously influential enemy which has taken it upon itself to drive a wedge between Murdoch and his presumed heir, younger son James.

It is not so much the content of the article as its timing that is so troubling. Murdoch and his brood are just days away from NewCorp’s annual general meeting that could theoretically see them unseated as directors. The last thing they need is another stinkbomb.

As it happens, the NYT article fails to come up with anything stunningly original. Provocatively titled ‘In Rift Between Murdochs, Heir Becomes Less Apparent‘ , it dwells on tensions – real and possibly imagined – between the two men in the hope of creating so much further bad blood that Murdoch père will eventually perform an Abrahamic sacrifice of his son’s career prospects in order to save his own skin.

Certainly Murdoch senior has been performing a skilful dance of the seven veils to protect his reputation. First he closed News of the World, and abandoned his cherished bid for BSkyB.  When that didn’t work, he sacrificed his faithful retainers Les Hinton and Rebekah Brooks. The tide of effluent still failing to ebb, he contributed millions, individually and corporately, to the Milly Dowler Fund.

For a while, the NewsCorp share price appeared to bounce back. Then came the hammer blow: a major shareholders’ revolt, partly sustained by new evidence of malpractice in the NewsCorp empire, this time at The Wall Street Journal.

Something like 25% of investors are expected to vote against the re-election of the Murdoch board on Friday. In almost any other public company that would mean curtains. But not at NewsCorp, where – unluckily for the institutional rebels – nearly 40% of the voting shares are owned by the Murdoch family.

So not much is really going to happen in the short term. Except some searing humiliation, fanned by the NYT. The worse it is, the poorer James Murdoch’s chances of eventual survival.

And that’s before his return for further grilling by the House of Commons media select committee, over the porkie pies and half-truths uttered during his last appearance.

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AdWeek’s Michael Wolff on the Murdochs, an everyday tale of Mafia folk

August 9, 2011

Reading AdWeek these days, I’m irresistibly reminded of Spike Milligan’s old bestseller: “Adolf Hitler: My Part in his Downfall.”

It’s not Spike’s obvious irony I’m talking about here, either. Michael Wolff, a talented enfant terrible now editing the venerable US trade magazine, is deadly earnest in trying to slay single-handedly the apotheosis of all evil. Only, for Hitler and the Third Reich read instead Rupert Murdoch and his Evil Empire.

Media don Rupert Murdoch

“Pugnacious”, “relentless” and “fearless” are words often found in close proximity to “Wolff” on the printed page. His anti-Murdoch crusade does not disappoint in any of these respects.

Wolff established his credentials as chief Murdoch-baiter with a biography which, when it came out over 2 years ago, had the satisfying effect of all but sending the usually unflappable old boy into a fit of apoplexy.

Since then, every twist and turn of what Wolff likes to call the Murdocalypse (that is, the phone-hacking scandal and its aftermath) has been chronicled with gleeful and sardonic attention to detail on the pages and website of AdWeek.

Here’s the man in action, just after the Murdochs, père et fils cadet, had made their woeful appearance before our parliamentary select committee a couple of weeks ago….

James in prison in just a few days time, and the old boy himself safely behind bars by the end of next year – doesn’t pull his punches, does he? Of course, it’s nothing personal, he just hates the bastard and all he stands for. In the land of Fox News, Rush Limbaugh and Tea Party partisanship, what could be fairer than that?

I mention all this in the light of Wolff’s pièce de résistance on the Murdochs, out this week, in which the family is convincingly portrayed as a mafia clan. No idle parody this – Wolff creates some compelling parallels. Here’s a short extract that gives the flavour:

Both the New York Post and Fox News maintain enemy lists. Almost anyone who has directly crossed these organizations, or who has made trouble for their parent company, will have felt the sting here. That sting involves regular taunting and, often, lies—Obama is a Muslim. (Or, if not outright lies, radical remakes of reality.) Threats pervade the company’s basic view of the world. “We have stuff on him,” Murdoch would mutter about various individuals who I mentioned during my interviews with him. “We have pictures.”

Vito Corleone to a T. And who’s the urbane young fellah with him? Michael? er, James?

What all this may be doing for AdWeek readership I’m not sure. Wolff, whose father was an adman, has a seigneurial disdain for the dull, grubby detail of everyday adland which, if not exactly ignored, is relegated to the nether reaches of the site map. He seems intent upon recasting AdWeek as Vanity Fair, with only a nod to the business readership which has, in some measure at least, loyally supported the title these past 33 years.

Adweek’s current publisher, Prometheus Global Media, appears to be 100% behind Wolff’s mission to expunge “robotic trade journalism” from the title in the cause of creating broader readership.

Which is just as well, because the danger is the title will lose all relevance outside those interested in Wolff and Wolff’s chosen hobby-horses.

Personally, I hope Prometheus has very deep pockets. Long may it subsidise Wolff’s zealous mission to excoriate, educate and entertain. But I rather imagine the commercial department is tearing its hair out as it watches the last vestiges of market share trickle over to humdrum old AdAge.

Coming shortly: The Borgias – A modern-day makeover, with Lis as Lucrezia.


Shining example – Elisabeth Murdoch sets up a mirror to James

February 22, 2011

In Outcasts, a Shine Television production currently airing on BBC1, the mysterious comeback-kid Julius Berger has managed to weasel his way onto the governing board of the Carpathian colony, armed with a silver tongue and a bulging power agenda. What will he do next – overthrow president Tate?

It’s hard to believe that James Murdoch isn’t – like Carpathia’s president – feeling the teensiest bit paranoid. Having his sister Elisabeth back on board (literally) after a decade’s absence from News Corporation is a mixed blessing.

On the one hand, the £415m acquisition of Shine makes News Corporation that much more a creative content and entertainment company, and that bit less a TV platform with a legacy newspaper business tied in. Then again, Liz is clearly an asset. She has won her spurs as a talented entrepreneur and manager during her near 11 years of independence from NewsCorp. Even if £415m is a tad generous (but hey, what’s wrong with a bit of nepotism if you can afford it?), no one seriously doubts that Shine is a good business, operating in the right place. How different her standing from the year 2000 when she quit as managing director of Sky Networks, apparently in mounting frustration over her father’s reluctance to give her full executive responsibility for BSkyB.

On the other, that’s just the problem for James. As someone with credible executive experience gained outside the family business, she must now pose a subtle threat to his role as heir presumptive to the Murdoch empire. Not an overt threat, of course. Merely a reminder that Rupert Murdoch, now nearing 80, has other options when it comes to handing over the reins of power.

Significantly Liz, 42, will not report to younger bro James, 38, but to Chase Carey, NewsCorp’ US-based deputy chairman, even though her business is centred in London.

Every time James makes a club-footed move from now on, it will be contrasted (fairly or not) with the more circumspect and reserved behaviour of his sister. And James has made a few club-footed moves, hasn’t he? The dawn raid on ITV shares, so audacious at the time, now looks less well-conceived. Then there was that intemperate raid of another kind – on the offices of The Independent’s editor-in-chief Simon Kelner, driven by blind but misguided rage. And finally, we have the ongoing News of the World bugging scandal, in which James’ handling of the situation has been called into question.

I mention this because the issue of James’ character and leadership qualities has just been raised (at some length) by an authority more eminent, and certainly more informed, than me: Tim Arango in The New York Times. Arango concludes: “James Murdoch is trying to succeed at the company his father built, but he is a very different character: more blunt, more bureaucratic and less able to smooth ruffled feathers. He has his father’s aggressiveness but not his tactical sense or temperance.” Just in passing, I suggest that his sister, though arguably less aggressive, is also less blunt, less bureaucratic and a lot more able to smooth ruffled feathers. I’m not sure about her “tactical sense”, but more so about her “temperance”.

All this would matter less if James’ leadership qualities were not about to undergo their supreme test. If the current chief executive of  NewsCorp Europe and Asia can shepherd the other 61% of BSkyB’s equity into NewsCorp’s stable, his future looks assured. He will then be in charge of roughly half the media empire’s revenues.

But what if he doesn’t? Suppose, for example, that the takeover is referred to the Competition Commission after all, and that Murdoch père decides the matter is no longer worth pursuing. How would that leave James’s leadership credentials looking? Impaired to say the least.

Which leads me to one last thing. The timing of the Shine deal seems very odd. Why was it concluded shortly before culture secretary Jeremy Hunt reached his decision on whether to invoke the CC, rather than afterwards? Having Shine – a considerable presence in British TV programme production – on board can only heighten anti-Murdoch paranoia, and put more pressure on Hunt to refer.

UPDATE 25/2/11: Silly me. Jeremy Hunt had already reached his decision, and it’s not to refer. That’s the gist of a report in today’s Financial Times. The FT suggests that Hunt and Rupert Murdoch have agreed to remove Sky News from a fully Murdoch-owned BSkyB, while at the same time guaranteeing its financial security. Strictly in the interest of ‘media plurality’, you understand. Mind you, the Murdochs still have to launch a successful takeover bid.


Vince hands BSkyB to Murdoch on a platter

December 21, 2010

It would appear the Scourge of Capitalism (aka business secretary Vince Cable) was bent on doing exactly what I earlier predicted. That is, committing a gross act of hypocrisy – in the clandestine manner of the bankers he so despises – by rigging the market to get the result he wanted.

This is the only reasonable interpretation of his unguarded remarks to two Telegraph undercover reporters about “declaring war on Mr Murdoch”. He is of course referring to his supposedly impartial role in adjudicating the acceptability of NewsCorp’s bid for the 61% of BSkyB it does not already own. For the avoidance of doubt the guileless minister of the crown went on to explain to the two reporters – posing as constituents: “I have blocked it [the bid] using the powers that I have got and they are legal powers that I have got…”.

Actually, that last bit is a tad premature. Ofcom is not supposed to report back on whether there is a prima facie case for referral to the Competition Commission until December 31st. But Vince was clearly confident that he had Ofcom in his pocket and could press ahead with a referral on the public interest grounds of an infringement of “media plurality”. The beauty of such grounds is that they reside entirely in the realm of political value judgement rather than the rigorously factual analysis of any threat to competition. And given that Cable would have had the final word, Murdoch & Co were clearly going to be thwarted.

No longer. Vince is off the case (indeed, he is off any adjudication of media competition cases from now on), although he has narrowly managed to retain his job. And culture media and sport secretary Jeremy Hunt will take his place. As a Tory, Hunt does not carry Cable’s Lib Dem ideological baggage; and if he does harbour any personal animosity towards the Murdoch clan it has so far remained scrupulously off the record.

Which is just as well. In the circumstances he will find it politically excruciating to deliver the thumbs down. The European Commission has just waved through the bid on competition grounds. That leaves the public interest argument. But this, too, is looking increasingly shaky when assessed on any fair-minded basis – as it will have to be in the wake of Cablegate. The legal precedent was set when the last government forcibly caused BSkyB to divest most of its 18% stakeholding in ITV. Ironically, the stated grounds were that NewsCorp’s then 39% holding in BSkyB posed a threat to UK media plurality. If you’re already a threat to media plurality when you hold a controlling 39% interest in a company, how is owning the rest of the shares going to make a material difference?

As political fiascos go, this is a corker. The Scourge of Capitalism has ended up performing a humiliating act of public self-flagellation. In the process, he has damaged Ofcom’s independence and almost certainly brought about the result he most feared: the strengthening of Rupert Murdoch’s commercial interests.

En passant, he has also damaged The Telegraph – one of his allies in the Murdoch matter, if no other; although Cable can hardly be blamed for that. The Telegraph deliberately suppressed Cable’s anti-Murdoch comments, presumably on the grounds that they harmed its commercial interests. Only because some nameless Assangeite felt that editorial integrity had been inexcusably compromised did the scoop come into the capable hands of BBC business editor Robert Peston.

I bet they’re laughing up their sleeves at Osterley Park and Wapping. I can’t say I blame them.


Murdoch and Jobs – Frenemies of the Internet

November 22, 2010

Now we know why James Murdoch, heir apparent at NewsCorp, has been so messianic about the iPad recently. The Times/Sunday Times “apps” experiment is merely part of a bigger picture – perhaps a small one at that.

It has emerged – rather curiously via US fashion industry journal Women’s Wear Daily – that Murdoch Sr is working closely with Apple chief executive Steve Jobs on launching an entirely new, exclusively apps-driven newspaper (there will be no website or print ancillaries) that can be purchased on an iPad. Other tablet formats may follow (though Jobs’ views on this egalitarian gesture are unknown). What we can say is that the news vehicle will be called the Daily, that it will appear as early as the end of this month, that it has an upmarket skew, that it will cost 99 cents a week, and that it will probably be edited by NewsCorp’s blue-eyed boy Jesse Angelo, currently managing editor of The New York Post.

For the fuller implications of a personal alliance between these towering giants of the media and technology worlds, turn to Tim Berners-Lee. Spookily but – so far as I know – entirely independently, the founder of the internet has just published in Scientific American a searching critique of what he regards as internet abuse. Unwittingly, it provides considerable insight into why Murdoch and Jobs are batting in the same team.

Berners-Lee casts his net widely. He sees the internet – once a kind of communitarian brotherhood in virtual space – as increasingly under siege. The attack on its ‘inalienable’ freedoms comes from a number of sources, many of which are themselves firmly rooted in web culture. High on his list of targets, for example, are social networking sites such as Facebook and LinkedIn. To these he adds Google and US telecoms carrier Verizon, which earlier this year struck an agreement to exempt mobile access to the internet from web neutrality; that is, from the accepted principle that no web service may be prioritised over another by a pricing structure imposed on its delivery. And finally, he rounds on mobile and desktop applications – Apple’s in particular – which operate behind a walled garden of restricted access.

Berners-Lee’s wider point is that these forces have something in common. Each in its separate way is parcelling out the freedom to communicate on the internet by hiving off “silos of content”. Berners-Lee believes this development is a Bad Thing, because it will eventually choke off innovation by creating a more fragmented internet.

There is, however, another way of looking at Berners-Lee’s argument – and one likely to find far more favour with Messrs Murdoch and Jobs: turn it on its head.

While the internet remains a free, or “near-perfect” (in the economist’s jargon) market, no one can enjoy a lasting commercial advantage. Look no further than the record industry, or the media itself. This is good for internet joyriders, who want their news, views and music free, but unsustainable in the wider capitalist economy. Without a carefully managed investment programme and the principle of reasonable investor returns, innovation on the internet is just as likely to be stunted as it is by the dark forces of silo monopolies that Berners-Lee sees gathering on the virtual horizon.

Murdoch and Jobs have every reason to cooperate. The internet may, in the longer run, have much to lose if they do not.


Murdoch gets tough with internet joyriders

May 8, 2009

Rupert MurdochFighting talk this week from Rupert Murdoch, chairman of NewsCorp, as he confidently predicts that “the current days of the internet will soon be over.” What he means is the parasitic “freebie” culture of content-scraping and Google News, which is beggaring publishers and commoditising news. Murdoch plans to put an end to the punters’ joyride by imposing a subscription gate around some of his principal titles, like the Sun and the Sunday Times online.

He thinks the successful Wall Street Journal model can be rolled out into general news. But is he right? And will other follow where he leads?

More in next week’s column.


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