Water under the bridge? That was my gut reaction when – to no one’s great surprise – Rupert Murdoch announced last December that, once more, he wanted 100 per cent control of the broadcaster Sky. Murdoch’s media empire is, I thought to myself, less toxic than it was when it came within a whisker of securing the 61 per cent of the group that it did not already own in the summer of 2011. Then, parliament – in a wave of revulsion over the revelations about the extent of the criminal behaviour of journalists at News International, News Corporation’s British subsidiary – united to urge the parent company to withdraw its bid for what was then British Sky Broadcasting (BSkyB).
Murdoch has since done some things that, on the face of it, make a bid less objectionable than it was half a decade ago. He has, at least to a degree, split his company’s publishing arm from the more profitable entertainment division – although, in the end, all roads lead to Murdoch.
His organisation may have been slow to realise the enormity of the crisis at the heart of its British operations, but to its credit, it spent several hundred millions of pounds on the clean-up operation over phone-hacking and associated legal actions (we can argue elsewhere about the methods it chose). Legacy print circulations are generally on the slide, dwarfed by the new digital giants, possibly softening some of the arguments about plurality.
And then there is Murdoch’s achievement in building Sky, while also putting together the biggest newspaper group in the UK. Sky is, indeed, an extraordinary company and only the most churlish would deny
the role of both Murdoch and his son James in creating it.
Maybe, I thought, it’s time to forget the past and insist instead on a number of cast-iron safeguards. No one in their right minds would want Fox News, or anything like it, in the UK. So perhaps a deal could be contingent on Sky being forced in perpetuity to operate by the same standards of impartiality and fairness that are required of other broadcasters, both online and offline. It would be important to ensure a minimal overlap of executive control between Sky and other parts of the Murdoch empire. And Sky should have an independent board. There should be editorial guarantees . . .
But then I looked at my mental list of safeguards and saw that I was doing what policymakers, regulators and politicians have done for nearly half a century in their dealings with Murdoch: assume that there are “normal rules” or binding agreements that could guarantee his future behaviour. Many such assumptions have proved meaningless over the years. Why should we assume that, at the age of 85, this particular leopard will change his spots? And a better question might be: is there any evidence that the old leopard even wants to change his spots? If he does, he has a funny way of showing it.
The meltdown at the heart of News Corporation in 2011 was spectacular. It was, in scale, the media equivalent of Enron’s collapse; or the BP/Deepwater Horizon oil spill; or the bailout of HBOS; or Volkswagen’s emissions scandal. Normal companies, if caught in the middle of crises of this magnitude, strain to demonstrate as forcefully as possible that they have changed. The most visible way of doing so is to get rid of the people who oversaw the calamity, crime or corruption.
That seemed to be the assumption in legislators’ minds in 2011, when both houses of parliament rejected the idea that Murdoch should be allowed complete control of BSkyB. The then prime minister, David Cameron, and the Conservative leader in the Lords, Lord Strathclyde, used identical language to insist that those who were ultimately responsible for the “disgraceful” behaviour within News Corporation should never again run a UK media company.
“The people involved, whether they were directly responsible for the wrongdoing, sanctioned it, or covered it up, however high or low they go, must not only be brought to justice,” said each leader to their respective chambers on 13 July 2011. “They must also have no future role in the running of a media company in our country.”
Cameron’s statement came as he announced a huge and expensive two-part inquiry by Lord Justice Leveson into the ethics and standards of the media. The second part is – theoretically, at any rate – still supposed to look into the “corporate governance and management failures at News International” and other newspaper organisations.
Who did Cameron and Strathclyde have in mind when vetoing any future role in running a UK media company? The subsequent culture, media and sport committee report damned both Rupert and James Murdoch for ignoring, or failing properly to investigate, evidence of widespread wrongdoing and for the subsequent cover-up. Its report, published less than five years ago, added witheringly: “The integrity and effectiveness of the select committee system relies on the truthfulness and completeness of the oral and written evidence submitted. The behaviour of News International and certain witnesses in this affair demonstrated contempt for that system in the most
blatant fashion.”
The regulator Ofcom went further, finding that James Murdoch, who was the CEO and chairman of BSkyB from 2003 to 2012, “repeatedly fell short of the conduct to be expected of him” as a chief executive officer and chairman of News International from 2007 to 2012: “We consider James Murdoch’s conduct . . . to be both difficult to comprehend and ill judged.” That was just four and a half years ago.
Initially Rupert Murdoch behaved as any normal business leader would: one or two key executives were fired, even as a few others went to jail. Yet the two dominant figures within the company were – temporarily – simply removed from sight.
James Murdoch left the UK to run another bit of the family empire. Rebekah Brooks, who was running News International from 2009 and who had previously edited both the scandal-torn News of the World and the Sun, received a pay-off reported to be well north of £10m when she resigned in 2011, admitting a “deep sense of responsibility”.
She was cleared of criminal charges relating to phone-hacking less than three years ago. Both she and James Murdoch suggested in their defence that, in essence, the company was out of control while they were running it. Their period in quarantine did not last long. In September 2015, Brooks was given her old job back at News International, now rebranded as News UK. And Murdoch’s son James was – despite protests from investors – restored as Sky chairman in January 2016, while remaining the CEO of 21st Century Fox, which controls Sky as the biggest single shareholder with a 39 per cent stake. The message was hardly: “We’ve changed.” This was a piece of corporate trompe d’oeil.
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Nor have other parts of the Murdoch empire been a source of much reassurance. Fox News, which some credit with helping to create the conditions for Donald Trump’s presidency, has been rocked by allegations about its corporate culture, which, in some ways, recall those at the heart of Murdoch’s British tabloid operations a decade ago.
The CEO and chairman of the company, Roger Ailes, was forced to resign in July last year with a reported $40m pay-off, following allegations of sexual harassment by current and former employees. As with the British tabloid newspapers, the company initially tried to buy its way out of trouble by offering multimillion-dollar pay-offs rather than confront the issue. (Ailes denied the allegations.) As in London, there are internal investigations being conducted by a law firm. And as in London, there is much speculation about what the senior management did or didn’t know at the time about the allegations against Ailes and about who signed off the various settlements.
More worryingly for the organisation, New York magazine’s Gabriel Sherman recently reported that the FBI has been investigating Fox News for months, looking at how the company structured these settlements “to hide them”. These look very similar to the News International payment to Gordon Taylor, the chief executive of the Professional Footballers’ Association, when the company realised its “one rogue reporter” phone-hacking defence could not possibly be true. An FBI finding against the Murdoch corporation would raise renewed questions about the “fit and proper” test of Sky’s directors.
Meanwhile, Rupert Murdoch is cosy with Donald Trump, having backed him in the presidential election. The executive chairman of News Corp recently sat in on Michael Gove’s Times interview with Trump.
And, even while the embers of Leveson Part I are still lukewarm, Murdoch executives have enjoyed easy access with British government representatives. A recent study found no fewer than 20 such meetings over a period of as many months – 18 of them with the prime minister, chancellor or culture secretary. Seven involved Rupert Murdoch and a further eight were with the News Corp CEO, Robert Thomson. No other media group has anything close to that level of access. Has the Murdoch empire been completely transformed since 2011, when both houses of parliament were so resolutely against allowing it to take full control of BSkyB?
In fairness to James Murdoch, he is part of the clean-up team at Fox and did not need much persuading to get rid of Ailes. But in no other company in the world would he be back in charge of a huge media corporation, let alone when a prime minister had explicitly argued against such a role. That is the exceptional nature of the organisation that Rupert Murdoch has built. It operates to different rules.
When Nick Davies did his extraordinary prolonged investigation into phone-hacking and the cover-up within News International, I discovered at first hand how frightened people were of the Murdoch organisation. Nick and I were repeatedly warned by sources within the organisation to expect retaliation. More importantly, the checks and balances that I assumed existed in British society failed, one by one. With a few distinguished exceptions, MPs, regulators, the police and other journalists found any excuse not to take this company on.
I could see the fear, and I had some sympathy. The Murdoch empire can be very aggressive – and, back then, some of its operations had few qualms about using illegal methods to dig the dirt on people while the high-ups hosted golden garden parties for the political and media classes.
I cannot believe that the criminal enterprise still continues. Yet my original gut instinct in December was wrong. I wouldn’t wish to see this enormously powerful and dominant company – run in such an exceptional and defiant way – get any more powerful or any more dominant.
Alan Rusbridger is a former editor of the Guardian and is the principal of Lady Margaret Hall College, Oxford
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This article appears in the 08 Mar 2017 issue of the New Statesman, The return of al-Qaeda