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September 2, 2014

The Myths of Murdoch: Real, Unreal and Surreal

Forget the tired “gate” applied to this scandal, as in the limp Phonegate. This News Corp scandal so far surpasses mere phone treachery that the name diminishes what’s at stake. Perhaps our so-far unnamed scandal will lend “Murdochian” to the vocabulary, as in an all-in scandal of hitherto unseen proportions. If so, that would be fitting with the man’s life, his ambitions and his almost-likable penchant for doing everything on a grand scale and nothing on a small one.

The week’s news has bolstered the Guardian, in particular in U.S. readers’ eyes. All of us checking our iPhones and iPads in bed now have to do it on different cycles to mesh with the five-to-eight hours difference with London. The Guardian’s live-blogging, onrushing news breaks and first-day, if not first-hour analysis, shows us the joy of finalizing delivering The Big Story after a 70-plus-month gestation period of starts and stops. The coverage — and the cross-linkages between the UK and U.S. in the Murdoch/News Corp/what’s wrong with the press story — also reinforces how much the English-language press is making a mockery of the Atlantic (“The Newsonomics of the British Invasion“).

Media across the world have been trying to get a grip on the story for days. Family dynasty drama? Fall of Murdoch? End of the tab? Journalism’s hour of repentance? Big, often overblown topics, befitting, well, a tab.

As we breathlessly await each new newsbreak — what will David Cameron say today? — let’s quickly look a few of the myths of Murdoch now in wide circulation.

  1. This is the end of Rupert Murdoch. Don’t bet on it. The wily Murdoch was probably smart enough to maintain a deniability about all the multi-year transgressions of law and ethics. His remarkable record of surviving disaster and finding new triumph will be sorely tested though. He’s head of a company with $13 billion in cash and $2.5 billion in net profit. That’s quite a safety net.
  2. News International is toast, to be sold off, the next step in washing out the stain of UK wrongdoing. Maybe. News International isn’t what it once was. The daily Times of London has been suffering the largest circulation drop of any UK quality weekly, down 11% in the last tally. Its pay plan can’t be called a success — a run-rate of maybe $18 million – and a loss of too many page views and unique visitors, which must be affecting online advertising. The quality daily business is a financial loser in London; remember that Guardian CEO Andrew Miller recently made the point that his company would run out of money in three to five years unless it moved profoundly “digital first” and cut back its print costs. Word is that only the Telegraph, with more home delivery than most of the quality dailies, may be profitable. So if News of the World with maybe $100 million in annual revenues (and maybe 10-20% profit) is gone, that leaves the six-day, soon-to-be-seven-day Sun. The Sun is popular, but may well be caught up in this Murdochian scandal as well, as tabloid competitors double their circulation runs in an attempt to take away the Sun’s market share, amid roiling reader and ad boycott. The Sun will recoup some NOTW readers and ad revenue, but only some.
  3. The scandal will have no effect on News Corp. Or the opposite, the scandal will break apart News Corp. You can mark it: News Corp will concentrate even more on non-newspaper businesses into the future. That was inevitable as the 80-year-old Murdoch eventually loosened his newspaper grip, anyhow. Now, it will be accelerated. News Corp isn’t a newspaper company, despite its name and its founder’s passion. Fewer than 16% of the companies’ revenues come from newspapers, and probably no more than 8% of its profit — if that. The newspapers have long been a drag of News Corp’s earnings and focus; it’s a global, diversified TV and movie company that wants badly to expand its satellite/pipes of the future footprint. It will now — post scandal — get on with that, spurred by governmental, shareholder and even internal executive (including next-generation Murdochs) pressure.
  4. It’s not about the News of the World; it’s about the press overall. In David Cameron’s public handwringing (“We’re all in this”), he generously shared blame for his at-best egregious hiring  judgment and choice of summer house buddies with anyone in sight. Certainly, the UK coziness, part class, part power and a lot of Fear Factor (see Sarah Lyall’s excellent NYT piece on that) bears deeper examination, and will drag in, rightfully, some other tabloid practices. But, please, don’t tell me we’re “all guilty,” as well. We’ve heard a lot of citing of ABC’s checkbook journalism controversy, equating it with the litany of crimes apparently committed by those calling themselves journalists. Treading on society’s victims lives, paying off police for years and apparently conspiring to hide and destroy the truth all transcend checkbook journalism. Yes, we are all on increasingly slippery slopes as journalism quickly morphs these days, but there’s a big difference between sliding, debating that slide, and those who fell into the cesspool of arrogant lawlessness. Let’s make sure we don’t confuse the two and take on those who purposely annex them for political gain.
  5. It will have no impact on U.S. operations. In the short term, that may be true. As News Corp rationalizes its newspaper holdings — ironically, newspaperman Murdoch has been at the head of line saying they have little future at current trajectories — it’s hard to believe it will keep the New York Post open. The Post still loses tens of millions of dollars a year. Financially oriented executives would also question how well the Wall Street Journal investment (NYC edition and global/national non-business news expansion) is working out. The New York Times doesn’t look like it is being killed off by the moves, instead putting a successful stake in the ground with its new digital circulation strategy and today, repaying early some more of Carlos Slim’s loan. News Corp has a unique, global business news asset in Dow Jones, and that’s where smart money, not ideological leadership, would take the strategy.

The bigger question is Fox News. Yes, Jon Stewart was comically dumbfounded Monday evening with Brit John Oliver’s review of the Murdochian scandal. Yet, his razor-sharp media criticism almost daily draws a direct line between Fox News’ use of “journalism” as a political weapon and what Murdoch has done, quite legally as well as illegally, with his UK papers. We all know the difference between journalism, however clumsy, which attempts to report fact and the partisan masquerade that too much consumes Fox News. Will Fox News be chastened by the scandal? I doubt it, but Fox does stand out as America’s real mainstream tabloid news medium.

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