Anna Burnside: Rupert Murdoch faces the moment of truth

Published on Friday 28 January 2011 19:55

HE IS a continent-straddling media baron with interests that range from the News of the World and Fox News to Asia's Star satellite channel. Acknowledged as one of the world's most powerful men, he has his finger in more pies than Greggs the baker, and, at the moment, 79-year-old Rupert Murdoch seems to be making the news as well as selling it.

Despite last week's sacking of senior News of the World editor Ian Edmondson, the phone hacking story refuses to go away. It transpires that reporters hacked the voicemail of actress Sienna Miller's stepmother, the interior designer Kelly Hoppen, last year. Former Cabinet minister Tessa Jowell has hired lawyers to find out who hacked her phone on 28 occasions. Gordon Brown and Alastair Campbell suspect that they too have been victims. So does Tommy Sheridan. It also emerged that David Cameron had dinner with James Murdoch, who runs the UK end of his father's empire, over Christmas.

This tangled mess, combined with the unedifying behaviour, and subsequent sacking, of Andy Gray and Richard Keys from Sky Sports, is cumulatively affecting another story close to the billionaire's heart: his campaign to take over BSkyB. Murdoch currently owns 39 per cent of the satellite broadcaster and would dearly love to buy the rest. But the heat generated by the many controversies currently being generated by his empire is making this difficult.

"It's very hard to argue that the conduct of the News of the World has improved standards of journalism in the UK," says David Hutchison, professor of Media Policy at Glasgow Caledonian University, who believes that the fact that one of News International's most successful papers is under investigation for having a culture of illegal phone hacking at the heart of its journalism raises the stakes over BSkyB. "It poses the perfectly legitimate question: is this a fit and proper organisation to gain more power than it already has in the UK?"

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It was never going to be easy for News Corporation - News International's parent company - to take control of the country's largest satellite broadcasting company. Culture Secretary Jeremy Hunt has the unenviable task of deciding if one of the most influential and intimidating entrepreneurs in the world should be allowed to expand his already formidable British operation. Hunt is playing for time, allowing News Corporation to submit "undertakings", thought to be some kind of structure to guarantee Sky News's editorial independence. If these do not satisfy him, News Corp's bid will be referred to the Competition Commission.

This is what Murdoch does not want: it would mean a drawn-out six-month investigation which may damage the deal, currently estimated to be worth 7 billion, and increase the asking price. The phone hacking saga is threatening the bottom line, so is being taken seriously at the highest level. This means Rupert Murdoch himself.Instead of spending last week with his peers at the World Economic Forum in Davos, the 117th-richest person in the world has been prowling the corridors of News International's headquarters in Wapping.

It's a long time since he has dropped into the Times newsroom and sat in on conference. Since buying the Wall Street Journal in 2007, Murdoch, who at one point discussed the front page with the Sun's editor every day, has taken a hands-off approach. With 38-year-old James at the helm of News Corp's European and Asian operation, Murdoch's focus has been on the US.

But James has patently failed to make the phone hacking story go away. While he has a strong track record when it comes to technology, he lacks the news sense of his grandfather - Sir Keith Murdoch, who ran newspapers in Melbourne and founded the family's business - and father. Dealing with regulatory authorities is another weak suit. So in jets dad.

The conclusions drawn by media observers have involved much talk of stables being cleared out. "It's a strategy that might backfire," observes Hutchison. "It suggests there was a lot of muck in there to begin with. It draws attention to what caused the fuss in the first place."

It has also allowed the Guardian, which has pursued the phone hacking story with zeal, to poke fun at Murdoch's heir apparent. Its cartoonist, Steve Bell, depicts James as Mini Roop, a pocket-sized version of his father, echoing his words, issuing threats in a comedy Australian accent. But failing to put out the phone hacking fire on his own has clearly undermined James Murdoch's status and raised doubts about his ability to take over when his father, who will be 80 in March, finally retires.

It is still Murdoch senior, with his folded jowls and famously abrasive manner, who is the bogey man. On being arrested for perjury, Tommy Sheridan claimed that the charges against him were "orchestrated and influenced by the powerful reach of the Murdoch empire". It was a symptom of a far more widespread antipathy that dates back to 1986, when Murdoch moved production of his four UK titles - the Times, the Sunday Times, the Sun and the News of the World - from Fleet Street to Wapping. It was the start of a protracted and bitter industrial dispute which weakened the unions' power in the industry.

"A lot of people on the unthinking left consider the name Murdoch to be something they spit like an obscenity in the pub," says Tim Luckhurst, a former editor of The Scotsman and now professor of journalism at the University of Kent. "This is preposterous. It ignores his enormous investment in loss-making, quality newspapers: The Australian, the New York Post, the Times. None of these would exist if he didn't invest in them."

Luckhurst maintains that, while Murdoch clearly cares deeply about money - his net worth is estimated at $6.2 billion - he also cares about journalism."He has decided to put his capital into an industry that does not pay anything like the return he would get from property, or arms dealing. If you look into his family history you will see that his father revealed the squalid history of Gallipoli. There is ink in his blood, he knows that journalism has a social purpose."

No-one doubts Murdoch's business acumen or what David Hutchison calls his "terrific chutzpah". For Paul Connew, a former deputy editor at the News of the World, "anybody who has built the empire he's built up, from relatively modest beginnings in Melbourne and Adelaide, has to be admired. He has taken gambles and almost lost his company. He is one of the great media figures of all time."

Connew does not think that a News Corporation-controlled BSkyB would have a compromised news agenda. "You can't say Sky has a biased news agenda at the moment - quite the reverse. Their coverage of the resignation of (Andy] Coulson (pictured below) was tougher and more immediate than the BBC's. And I do think if Sky News were to be closed down, it would hardly help the plurality of news coverage in the UK. If they hived it off for sale, who could afford to maintain its quality? I would hate to see anti-Murdoch hysteria colouring that decision."

If there is anti-Murdoch hysteria at large in the country, it has missed the House of Commons. Labour's Tom Watson was the only opposition MP to raise phone hacking at Prime Minister's Questions last week. For Kevin Williamson, co-editor of the Bella Caledonia website, the reason for this is clear: fear. "Murdoch corrupts the democratic process wherever his fingerprints are left. He has so much power concentrated in his hands that it amounts to unstated blackmail: 'You do what I want, or I'll come and get you.'" His newspapers are so ruthless and well-resourced, says Williamson, that few individuals are willing to speak out. "No party is willing to challenge him. There is no attempt to restrain Murdoch by anyone. They are all afraid."

David Hutchison concurs that it is a brave politician who will take on News International. "People are frightened of them. There is this terrible sense that these people can destroy you."