Bad news for Rebekah Brooks, but good news for BSkyB’s Jeremy Darroch

July 6, 2011

Jeremy Darroch, chief executive of BSkyB, now looks in an even more powerful position to inherit the News International mantle of power (should he wish to) than when I flagged up his significance to the Murdoch empire in my last Marketing Week column.

Rebekah Brooks, NI’s current chief executive, is terminally damaged goods, in the wake of ‘Millygate’. Not to mention ‘Jessica-and-Hollygate’ and ‘7/7-gate’.

For the moment, of course, it’s Andy Coulson, ex-News of the World editor and David Cameron’s former director of communications, who has been thrown to the lions. Thanks to some NI emails which have mysteriously surfaced just in time, Coulson is now a proven liar. He procured, or authorised procurement of, paid information from the police while he was News of the World editor – something he has previously strenuously denied. And for good reason: it is quite illegal.

It’s an astute, if cynical, sacrifice, and proves the Murdochs are still thinking on their feet. Coulson’s disgrace tarnishes both Cameron (by association – after all, he picked Coulson, despite his dodgy reputation, and then backed him to the hilt in his hour of need) and Knacker of the Yard (assistant commissioner John Yates, once the officer in charge of investigating the phone-hacking scandal at the epicentre of the Murdoch crisis, who is now looking woefully ‘under-informed’ and incompetent, after previously vociferously denying the merest scintilla of police complicity in the matter).

Even so the Coulson gambit is, at best, a delaying tactic. It will make our leading politicians and policemen tread a little more carefully, but it will not prevent them from taking decisive action. Public opinion is now too inflamed for them to do anything else.

Inescapably, the smoking gun is pointing at Brooks, née Wade, and editor of News of the World when – it now emerges – NI’s private investigator of choice Glen Mulcaire was hacking into the phones of Milly Dowler’s distressed relatives. She says she knows nothing about it. Do we believe her, any more than we believed Coulson’s protestations of ignorance? I’ll leave that one hanging in the air.

Ordinarily, implicated NI and former NI executives have been able to take refuge in prevarication, in the sure and certain knowledge that rapidly abating public interest will soon allow them to emerge from their burrows relatively unscathed. This crisis is different.

It has an unprecedented commercial dimension to it. Top advertisers, led by Ford, are boycotting News of the World, and that really will hit the Murdochs where it hurts. Ford is the single biggest advertiser, contributing about £4.5m annually to NoW’s £40m display advertising revenue. Halifax (owned by Lloyds Banking Group) has now joined Ford. Other major advertisers believed to be considering their options are T-Mobile/Orange, Vodafone and nPower. The danger, from the Murdochs’ point of view, is that this commercial contagion spreads to other NI newspapers, such as the Sun – which Brooks also edited. It could easily do so, given a swelling social media campaign goading consumers to boycott advertisers who refuse to align themselves behind Ford. (There’s a useful live update on the brands boycott at Marketing Week.)

All of which may well rapidly result in Brooks becoming surplus to NI requirements.

OK, you say, but what has this got to do with Jeremy Darroch? I’m coming to that. Whatever the backwash from the phone-hacking scandal, it will not prevent culture secretary Jeremy Hunt from giving his blessing to Murdoch-vehicle NewsCorp’s acquisition of the 61% of BSkyB it does not already own. Legally, a challenge to that assent is now well-nigh impossible. Indeed, Hunt and the Government would probably be on the receiving end of a writ it they were obstructive.

Let’s assume for a moment that the deal is done, that the Murdochs have pacified BSkyB shareholders with an eye-watering amount of money and are now the proud possessors of the rest of the organisation. What are the repercussions for NewsCorp and in particular its UK-centric arm, NI, in the wake of a full takeover?

BSkyB is one of the UK’s most powerful companies with, just to give the flavour, a marketing communications budget of £1.2bn a year. It is phenomenally cash rich. One estimate reckons that, once acquired, it would contribute 30% of NewsCorp’s cashflow. Like the Murdochs’ newspapers, it is UK-centric. Unlike the newspapers, it is highly profitable. Unlike the newspapers again, it is still a dynamic growth business, which has made good use of product innovation.

In short, it would be the jewel in NI’s crown. Who better to manage that jewel in the new, enlarged organisation – a man of untarnished reputation who intimately understands subscription TV; or Brooks, with her yesterday’s tabloids background?

Of course, I have no idea whether Darroch would actually be interested in such a proposition. He may well take his money and run. But it’s worth thinking about, isn’t it?

UPDATE 17.30 – 7/7/11: So, The News of the World is no more. The Sunday edition, shorn of advertising, will be the last in the newspaper’s 168-year history. Nothing could more graphically illustrate the gravity of the crisis engulfing NewsCorp than that its chairman and chief executive Rupert Murdoch should take the drastic step of closing his most profitable newspaper and the one – to boot – he started out with back in 1969. The suspicion lingers that a skeleton NoW staff will be retained to flesh out a 7-day version of The Sun. “The Sun on Sunday” has long been rumoured as a cost-cutting project. How typical of Murdoch that he should turn a disaster into a publishing opportunity.

UPDATE 7/7/11: Determination not to be the last advertiser at the News of the World has now reached frenzied proportions, as Vauxhall, Virgin Holidays, O2 (£1m), Boots (£800,000) and  Sainsbury’s stampede to the exit with Ford, nPower and Lloyds Banking Group. Morrisons next, I suspect. Will anyone be buying the paper anyway? Newsagents expect a boycott on Sunday.


FIFA’s Sepp Blatter and Max Mosley are two of a kind

June 1, 2011

Will the sky fall in on Sepp Blatter, much reviled president of FIFA, just because Coca-Cola and Adidas, Visa and Emirates Airline – 4 of football’s 6 biggest sponsors – have fired a shot across his bows?

Will the English and Scottish football associations’ vociferous appeals for a postponement to FIFA’s presidential election – which currently leaves Blatter dribbling up to an open goal – make an iota of difference?

No and no. The contest between FIFA and its critics is asymmetrical precisely because, unlike Coca-Cola and its fellow sponsors, FIFA is not a brand. It is not vulnerable, in the first degree, to public criticism – however merited or angry that criticism may be.

Indeed, as Matthew Patten recently pointed out, FIFA resembles nothing so much as a medieval guild. It owes allegiance to no one other than the 208 merchant adventurers who make up its membership. Nothing, culturally speaking, could be more removed from the modern corporation. There is no transparency in its business dealings, because the daylight of accountability is not an element in its constitution. The anonymous men in blazers ply their trade in a way that is endemic to all closed mercantile organisations: through mutual back-slapping, nepotism and, let’s face it, financially lubricated manila envelopes – if they think can get away with it. And lording it over them are the merchant prince oligarchs: men (they are always men) like Sepp Blatter and Mohamed Bin Hamman.

FIFA is part of a pattern which, if not peculiar to the administration of world sport, is certainly highly characteristic of it. Remember the cleansing of the Augean Stables at the International Olympic Committee (IOC), after the corruption scandal that was the Salt Lake City Winter Olympics bid came to light in 1998? That was a relatively benign outcome. Less satisfactory have been the consequences of the more recent shenanigans at Formula One. Despite the engulfing stench of scandal, and the twittering of vocal criticism, its twin ringmasters Max Mosley and Bernie Ecclestone managed to protect the integrity of their power base. Admittedly Mosley eventually went, but it was at a time of his own choosing and on his own terms. Ecclestone, meanwhile, continues to crack the whip without let or hindrance. He is currently said to be negotiating an exit deal with Rupert Murdoch.

Blatter, a man who once fronted an organisation dedicated to stopping women exchanging their suspender belts for pantyhoses, is more likely to draw his inspiration from Mosley than the aftermath of the Salt Lake City scandal. He will brazen the “crisis” out.

And there is little, in the last analysis, the sponsors can or will do about it. On the surface, that might seem a strange thing to say. After all, they are bankers to the organisation and provide its marketing pot. Each contributes between £100m and £300m to a FIFA revenue estimated at £2.4bn in the 4 years up to and including World Cup 2010. Surely that gives them more clout than most stakeholders in the struggle to wring reform from the World Cup organiser? Only up to a point. Let’s not forget that FIFA is less dependent upon sponsors these days to the extent that it can dip into billions of dollars worth of syndicated worldwide TV rights. Moreover, rather than presenting themselves as a united front, the sponsors perceive themselves as embattled and vulnerable competitors (rather like the constructors in the F1 equation). Blatter, like Ecclestone, is a supreme tactician in exploiting such weaknesses. There’s always someone else, he will say, to take their place if they don’t want to play ball. A Pepsi for a Coke, a Nike for an Adidas, a Delta for an Emirates, a Mastercard for a Visa.

And do you know what? He’s right. The only chance the sponsors have of effecting change is if they stand united. My suggestion is not that they threaten to defect, merely that they withhold some of their funding until tangible reforms, prime among them greater transparency and accountability, are in place.


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.


Digby down, but never mind. ITV bonanza on the way – CRR is going too

January 13, 2011

Say what you like about him, veteran ITV sales director and professional rough diamond Gary Digby will be sorely missed.

One rival, reported in the FT recently, put it this way: “Media buyers will now see ITV as an easier place to do their negotiations and will expect to save millions.”

A back-handed compliment if ever there was one. Digby and the three senior members of his staff who also got the boot have been closely associated with ITV’s Lazarus-like commercial recovery last year. Conservatively, ITV made about £1.55bn from advertising revenue in 2010, an increase of over 15%.

Fru Hazlitt, the new ITV commercial director who did the booting, evidently sees root-and-branch restructuring of the sales department as a vital prerequisite to streamlining ITV’s analogue and digital offer. Which it may well be. But the media buying community has a different take on things: Kelly Williams (ex-Channel 5) and the rest of the Hazlitti imports are going to be a push-over by comparison with the Digby regime.

Personally, I wouldn’t like to speculate on how weak the ITV ratecard will be from now on. I make just one observation. If relief is ever needed in the ITV Alamo, then the cavalry is certainly on its way.

Yes, Jeremy Hunt – the newly empowered government media czar and part-time culture secretary – has unambiguously signalled that he intends to abolish Contract Rights Renewal – the advertiser-friendly sales corset that squeezes tens of millions of pounds off ITV’s revenue line every year. The only trouble (from ITV’s point of view) is that some waiting is involved before the relief arrives. Hunt intends to bundle repeal of the hated constraint into the Communications Bill which may, or may not, pass into law by the end of next year.

What Hunt’s motives are we can only guess. Some point to his ideological preference for laissez-faire capitalism. Others, more politically cynical, suspect that the CRR gesture may not be unconnected to Hunt’s invidious task of adjudicating the Murdochs’ controversial bid for the 61% of BSkyB they do not already own. After all, what could be more even-handed than to wave through both measures? Strictly in the interests of media plurality, you understand.


BSkyB – nearly the company with the UK’s biggest marketing budget

January 4, 2011

Will BSkyB soon become the UK’s biggest marketing company? It’s a sobering thought  – especially for those who, like culture secretary Jeremy Hunt, must now consider whether Rupert Murdoch and his son James are fit and proper guardians of the 61% of the broadcast media company they do not already own. What will they do with unfettered control of all that money – not so much when it is directed at ITV and the BBC (the case already), but at BSkyB’s non-broadcast rivals?

In fact, BSkyB is still some way from being the company with the biggest marketing budget. The latest Nielsen figures, which leaked out just before Christmas in The Telegraph, reveal that BSkyB has now moved into number two position behind Procter & Gamble in the advertisers’ league table: not quite the same thing, but the most reliable indicator we have in these matters. The main casualty – inevitably given what has happened to it – is the Central Office of Information. For some years the COI sat on, or very near, the top of the pile. Its fall from grace has been melodramatic: despatched from top to fifth place, with spending slashed 47% to settle – for now at – £112m. There’s no likelihood of it getting back.

BSkyB, on the other hand, increased its spend 20% to reach £161m. But even that wasn’t nearly enough for it to become top dog in the near future. P&G put on another third – giving it an unassailable lead at £189m. Unless of course BT, currently 7th with a spend of £104m, continues its phenomenal 44% multiplication of spend for the next three years (unlikely, I suggest).

These Nielsen figures are interesting indicators, but they need to be viewed with considerable caution. Although they purport to record expenditure to the end of the calendar year, there are a number of caveats; for example, there is no internet spend included for the last quarter (a significant omission). They are, moreover, merely a ratecard indicator: they do not tell us what was actually spent after discount. Finally, they do not record all forms of marketing activity. And some of these excluded sectors, like POP, are absolutely massive.

For all these imperfections, however, the Nielsen figures reveal a remarkable truth. BSkyB has become one of the UK’s most powerful companies, and it has done so in large measure through the intelligent application of marketing.


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.


Laugh now, pay later if Murdoch gets his hands on the rest of BSkyB

November 2, 2010

At last, hard news from the impenetrable walled garden girdling The Times and Sunday Times these last four months. The Murdochs’s paywall strategy has harvested an astonishing 105,000 online subscribers – says News International, owner of the titles.

Well, not “subscribers” exactly, because that 105,000 includes quite a few birds of passage who have paid a couple of quid to visit the sites and then come no more. Lots of them, in fact. So the true number of subscribers? About 50,000 according to the Guardian – admittedly not the most objective of sources on the subject of paywall strategy, but probably near the truth on this occasion. Did I mention the iPad and Kindle subscribers? No, I thought not. They’re about 15,000 of this 50,000 figure. Which sounds heartening for Apple and Amazon, but less so for News International when you realise that they got an introductory two months of online access free.

I could go on, but I won’t. The figures are pretty meaningless in themselves, and muddied still further by the fact that there are another 100,000 print subscribers who receive the online version free. Even on the most optimistic viewing – that is to say 205,000 dedicated online visitors – the revenue would not amount to much by comparison with advertising lost after shutting down free access.

So what though? Never let it be said Rupert Murdoch bought The Times to make money – if he did, he’s been sadly disillusioned these past 30 years. In truth it has always been a loss leader in experimentation under his stewardship. First he tried dumbing it down, to take on The Telegraph. Now he is, perforce, reverting to a still loss-making but more elitist publication that happens to serve as an invaluable guinea pig in the post-print era.

Whatever the present cost of these lessons, it will be amply repaid should NewsCorp ever get its hands on the 61% of BSkyB it does not already own. BSkyB has total revenues of about £6bn a year; News International, the European subsidiary of NewsCorp, about £2.7bn. Forget enhanced earnings. The torrent of cash surging through the organisation alone would give the Murdochs all the flexibility they need  to experiment much more boldly with an online newspaper bundling programme for 10 million Sky subscribers. And the beauty of it would be that these self-same subscribers would have underwritten the experiment as well.

No wonder the competition are desperate to stop Murdoch’s bid in its tracks. In any forthcoming price war, he would be able to outspend the lot of them combined.


Francis Maude’s Sword of Damocles leaves the COI’s future hanging by a thread

October 15, 2010

Clearly the future of the Central Office of Information, which has been around since 1946, is even more precarious than I – or I suspect its chief executive Mark Lund (left) – had imagined.

Not content with imposing an emasculating 40% cut on the COI’s 737-strong workforce, the Government is now openly toying with the idea of casting its eviscerated carcass onto the bonfire of the quangos.

The decision, which will not be finalised until the end of November, is in the hands of cabinet office minister Francis Maude. Maude’s views on the subject may readily be gauged by his recent actions. He has floated the idea of the BBC airing COI campaigns free of charge – presumably in place of the many self-indulgent programme trailers and cross-channel promotions which now clog our viewing. Indeed, he has gone further. Since media buying would, to the extent that campaigns are aired by the BBC and not commercial channels, become redundant, he has taken the logical step of opening negotiations with WPP over M4C’s £200m centralised media buying contract.

Strip out centralised media buying, and it is very difficult to see what else is propping up the rationale of the COI. Specialised consultancy advice? Increasingly unlikely. Such industry knowledge will be a rare commodity once the organisation has been cut to the bone. And if that is so, the road to dissolution begins to look like a four-lane motorway. As with other quangos facing the axe, any essential functions will be transferred to alternative organisations – here, the bigger-spending departments of state such as the DoH.

All this would be a terrible blow for commercial television (especially ITV, which carries the bulk of COI campaigns). But it is doubtful whether agencies (beyond M4C and the media buying community) would shed anything other than a few crocodile tears. Someone still has to make the ads; and Richard Pinder, chief operating officer of Publicis Worldwide, has made it abundantly clear that his agency for one would be right behind the Maude proposal. Others may be more muted, but it’s unlikely they will disagree with him.

If Maude gets his way, it will be the realisation of a terrible irony. Previous COI ceos – namely Carol Fisher and Alan Bishop – have fought tooth and nail over the past decade, ultimately successfully – to suppress a secession by departments of state.

But will Maude actually go through with it? Don’t underestimate the BBC’s ability to kick up a stink over this: it doesn’t like the Maude Plan any more than ITV, although for a quite different reason. The whole issue threatens to become mired in a heated “public interest” debate, pivoting on the BBC’s impaired political impartiality. What with the brouhaha over BSkyB (to refer, or not refer, Rupert Murdoch’s bid), I doubt that the coalition government will have the stomach to take on an alienated ITV and truculent BBC as well. No doubt about it, though, it’s a thin thread the COI’s future hangs by.


Murdoch-bashing is the BBC’s best defence

October 8, 2010

Say what you like about BBC director-general Mark Thompson (and some do find him a bit antenna-challenged), he’s doughty in defence.

BBC's best defence?

Having got his hands on a big stick to club his bete noire and tormentor James Murdoch at this year’s MacTaggart Lecture, he’s now taken the media war to Murdoch Snr’s “home” terrain by  very publicly wading into the “Stop Murdoch getting Sky at any price” debate on America’s normally unremarkable public service television network (PBS). Thompson told the Charlie Rose programme that giving Murdoch what he wanted – the other 61% of BSkyB – would result in “a significant loss of plurality in our media market” and the “potential of an abuse of power.” In effect, it’s the old “Silvio Berlusconi” caricature – lovingly etched by Claire Enders – being given a new lease of life.

Whether a wholly-owned Murdoch Sky would really lead to an abuse of power I have no idea; beyond mentioning what people seem to conveniently forget in this debate – Murdoch’s imploding newspaper revenues. But the truth of the matter is less important than its plausible representation. And here – hats off – I must admire Thompson the tactician. Intelligently using the fewer resources at his disposal he has turned attack into the best form of defence. Like some latter-day Stonewall Jackson.

What Thompson has scented is a definitive change in the balance of UK media power which he is exploiting to the BBC’s advantage. It cannot have escaped notice that the regulatory authorities – prodded by the politicians – are spending an increasing amount of their time pursuing alleged abuses of BSkyB’s power – as instanced by investigations into its significant stake in ITV, and its control of premium sport and film content. What juicier opportunity to get politicians frothing at the mouth than pointing up the imminent prospect of Murdoch getting his hands on all of Sky’s £6bn revenues and £950m cashflow? Thompson nicely emphasised what’s at stake in his MacTaggart Lecture when he suggested Sky’s marketing budget alone dwarfs what ITV spends on its programmes. It now appears he has made common cause on the matter of Murdoch’s overweening power with some very odd bedfellows indeed: just about every other newspaper proprietor in the country.

And while the media and the politicians are diverted by the prospect of one long, uninterrupted, Murdoch-bashing fest, who’s going to be bothering with such pettifogging issues as bloated budgets, out-of-touch management, abuse of the internet media market and pension funds running amok at the BBC? Which should make for a fairly uninterrupted run-up to the next licence-fee negotiations.


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