RIP NOTW: Where now for Murdoch and News Corporation?

By Andrew Nowell

The News of the World closed down, suspicions of police corruption, the phone hacking scandal, a judicial inquiry – where now for News Corporation’s takeover bid for BSkyB?

The events of the past few days have rocked the British media to its core and unleashed a wave of public anger not seen in Britain since the initial days of the MPs’ expenses crisis two years ago.

The shock stems from the sheer scale of the allegations against News International, and the seemingly endless twists the story is taking, as more and more people allege that their privacy has been breached and whistleblowers and journalists uncover a network of payments, favours and corruptions winding its sinuous way through almost every aspect of British life, including Parliament, the Metropolitan Police and the entire press industry.

However, behind all this lies another subtext. Since March, News Corporation has been making its second bid to take over BSkyB, which would give the company almost unprecedented power over Britain’s television and, therefore, public opinion.

So, where do these revelations leave that deal?

To sum up the situation first, the deal is currently at a largely-expected standstill.

OFCOM and the Office of Fair Trading are yet to report back with any findings they may have, and Culture Secretary Jeremy Hunt has been at great pains to point out he will make no decision until all these findings are in.

Furthermore, he has also pledged to look at every submission he receives about the takeover, and these currently number over 100,000, the vast majority of them criticising the proposals.

In addition, events took another twist on Wednesday when Mr Hunt, in a tumultuous House of Commons session, announced he was referring the entire takeover case to the Competition Commission.

With all this in mind, any decision on BSkyB’s future will not come until September, by which time, cynics point out, all the fuss and moral outrage over phone hacking will have long died down.

For now, however, Mr Hunt remains in the eye of a political storm dwarfing anything so far experienced by Conservative ministers attempting to carry the can for ideologically-coherent but deeply unpopular policies.

DECISION: Jeremy Hunt announced to the on Wednesday he was referring the entire takeover case to the Competition Commission

In the wake of the revelations, the stock markets panicked, with investors rushing to pull out as the BSkyB takeover looked increasingly unlikely.

News Corporation shares fell more than 3% in Sydney and on Wall Street, while BSkyB shares fell by 4% on the London Stock Exchange over just two days.

The Internet was immediately flooded with campaigns and petitions attempting to block News Corporation’s takeover of BskyB.

New York-based website Avaaz collected hundreds of thousands of signatures on their petition, while  38 degrees had already reached 100,000 signatures by last Thursday.

In addition, 38 degrees’ website reveals an important second strand to the anti-Murdoch campaign.

Their website statement reads: “We can’t trust Murdoch’s “promises” about respecting UK democracy and media plurality if he takes over BSkyB, while his newspapers stand accused of immoral and criminal activities.”

A heated exchange in the House of Lords went over much the same ground with Lady Royall, tabling the matter as a private notice question, demanding action in the face of: “the loss of public and commercial confidence in News International.”

 “The Culture Secretary takes the view that News Corporation has given serious undertakings and discussed them in good faith,” government spokeswoman Baroness Rawlings replied.

“There are sufficient safeguards.”

Lady Royall responded: “The country knows that is the wrong answer,” before asking for further time to be set aside to debate the matter further next week.

Answering further objections, Baroness Rawlings said: “The Secretary of State has quasi-judicial discretion after the decisions of OFCOM and the Office of Fair Trading. He will need to consider all the presentations, and there is no date at present for his decision.”

“He will not be rushed, and will be fair. He has to make it strictly on grounds of media plurality, within the law.”

Her line was audibly unpopular, with loud support for peers expressing views distrustful of News International.

Among backbench MPs the picture is equally clear, with little obvious support for Rupert Murdoch or News International.

John Leech, Liberal Democrat MP for Manchester Withington, said: “I have always been opposed to domination of the media by a small number of individuals and I have always opposed the full takeover of BSkyB.

“The way in which both the Tories and Labour have cosied up to Rupert Murdock in recent years is shameful. If anything can be done to stop the takeover I would certainly support it.

“Ofcom should investigate whether BSkyB is a fit and proper broadcaster and whether this would be affected by a complete takeover by News International.

“What has happened with the News of the World doesn’t change my opinion, although it does reinforce it. However, we must avoid a knee-jerk political reaction to the situation that could be successfully challenged in court.”

Labour MP for West Bromwich East Tom Watson has also emerged as a vociferous critic of News International, and in particular of the decision not to sack Rebekah Brooks.

Speaking at Parliament’s emergency debate last week, he told the Commons: “Glenn Mulcaire has accepted some share of responsibility for this moral sickness (of phone hacking), but the editor in charge of him refuses to take responsibility. Indeed, far from accepting blame, she has—amazingly—put herself in charge of the investigation into the wrongdoing; the chief suspect has become the chief investigator.”

“The whole board of News International is responsible for the company. Mr James Murdoch should be suspended from office while the police investigate what I believe is his personal authorisation to plan a cover-up of this scandal,” he added.

SPEAKING OUT: Tom Watson has been a vocal critic of Murdoch’s decision to stand by Rebekah Brooks

“Their behaviour towards the most vulnerable, their knowledge of lawbreaking and their failure to act, their links with the criminal underworld and their attempt to cover up lawbreaking and to pay for people’s silence, tell the world all we need to know about their character—that they are not fit and proper persons to control any part of the media in this country.”

However, despite all this, Murdoch’s moves in the hours and days following the crisis could actually do his takeover of BSkyB more good than harm.

By ditching the toxic News of the World brand, News International clearly hope to draw a line under the entire issue by promising to co-operate with investigations while underlining the successful and largely respectable nature of their other newspapers, The Sun and The Times.

The resultant streamlining of News International’s British operations also helps to remove a key plank in critics’ objections to the amount of power Murdoch’s organisations wield.

Furthermore, the sheer difficulty of getting people to testify against a figure wielding as much money and influence as Rupert Murdoch makes any inquiry’s task an unenviable one.

The Culture, Media and Sport Committee which looked into the first police investigation into phone hacking at the newspaper in 2007– the one accepting News International’s findings that jailed royal correspondent Clive Goodman was a lone agent and then-editor Andy Coulson had no idea what was happening in the newsroom – reported: “Throughout our inquiry, too, we have been struck by the collective amnesia afflicting witnesses from the News of the World.”

Another issue a public inquiry will face, also mentioned in Parliament this week, is that most of the celebrities involved in actions for breach of privacy came to out-of-court settlements, leading to the files being sealed and very few details of the cases seeing the light in court, where they would immediately become a matter of public record.

A businessman as canny as Rupert Murdoch is certainly not going to be unaware of all this.

Chorley and Leyland Guardian editor Chris Maguire said: “Rupert Murdoch is incredibly intelligent.

“He’s like a chess player, he sees the next four moves. He knows there’s a bigger game being played here.

“The BSkyB deal is the one he really wants, and I think the News of the World has been sacrificed because of it. He’s prepared to take one step back to take two steps forward.”

However, recent events have rather shaken Murdoch’s unflappable coolness, and now he increasingly seems on the back foot.

Compare the picture of the suave businessman expertly fending off the journalists with a shrug, a hand gesture and a refusal to comment on that golf course in Utah, with the pale-faced man being rushed out of the glare of a scrum of wildly clicking cameras in a Range Rover accelerating at top speed.

Events have also conspired against him unexpectedly. It was reported, for example, that the decision to restructure Sky News into a semi-independent organisation part-funded by News Corporation, cut loose from the main body of Sky as part of the takeover deal, had sidelined the Competition Commission.

It is an open question about what this arrangement would do to the quality of Sky News’ journalism.

Critics will point both to theories such as those of Noam Chomsky and Edward Herman, suggesting that radical journalism will never make money, and the practical example of the annual losses made by The Guardian, one of Britain’s more openly left-wing newspapers, and draw their conclusions.

However, now the Competition Commission are back at the very centre of the case, with the power, awarded them by the Culture Secretary, to look once again at the entire business and rule against it if they desire, and as hundreds of thousands of people hope they will.

However, some of the criticisms that have been levelled against the takeover simply don’t hold water.

For example, it has been suggested that it will open the doors to a right-wing free-for-all on the news channels along the lines of Fox News. Actually, this isn’t quite true.

Rupert Murdoch doesn’t need to buy Sky in order to introduce Fox News here. If you’re a Sky customer, it’s already there on channel 509 in all its dubious glory.

It is also arguable that News Corporation’s takeover of Sky will not greatly affect the level of interest and influence they enjoy, given that they already own a controlling stake of 39.1% in the company.

Former Channel 5 director David Elstein has also criticised of the anti-takeover campaign, writing an article earlier this year for the Guardian about the consequences if the deal were blocked and BskyB decided to get around competition rules by moving its domicile and stock market listing to Luxembourg.

He said: “This would isolate the News Corp/BSkyB transaction from any UK newspaper consideration, thereby ensuring its completion. But it would involve significant losses: of thousands of jobs in the UK, of more than £1bn a year in VAT, and of hundreds of millions a year in corporation tax.”

In addition, criticism of monopolies within the media may ring a little hollow when the BBC enjoys a taxpayer-funded monopoly all of their own.

“I think the problem is generally that they are too big,” Chris Maguire said.

“The BBC are the only industry that has this huge monopoly. The BBC don’t want Sky to be too big, and Sky don’t want the BBC to be too big.

“Which one is the enemy?”

With self-interested reasons to allow the takeover to go through, and the legal grounds to oppose it looking a little dodgy, that brings us back to public anger and the words of organisations such as 38 degrees: to the fitness of a company accused of criminal practices to run large sections of the broadcast media, and to philosophical objections to News International’s tone and style of journalism.

To sum up this latter point, I can offer no finer example than the late playwright and director Dennis Potter’s final interview, given to Melvyn Bragg in 1994.

Announcing that he had named the pancreatic cancer that was killing him ‘Rupert’, Potter offered an eloquent and passionate rejection of Murdoch’s values.

He said: “There is no one person more responsible for the pollution of what was already a fairly polluted press, and the pollution of the British press is an important part of the pollution of British political life, and it’s an important part of the cynicism and misperception of our own realities that is destroying so much of our political discourse.”


More related stories:

It’s Twitter wot won it: Social Networking and the end of (News of) the World

My Big Mouth: MM opinion on phone hacking and the closure of NOTW

My Big Mouth: MM opinion on where the NOTW closure leaves Murdoch’s BSkyB bid

Piccadilly Pulse: News of the World phone hacking scandal – 07/07/2011

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