Powerful business leaders: Rupert Murdoch

Powerful business leaders: Rupert Murdoch

Eventually, even Rupert Murdoch must slow down or die. But at 81 he shows no sign of doing either.

And, as we wrote recently, if he lives as long as his mother, Dame Elisabeth, he’ll have at least another 22 years to rule the roost, provided he can stop the News of the World hacking scandal from knocking him off his perch.

This week, his new man in Oz, Kim Williams has been waxing lyrical about the future of his Australian newspapers, promising that they, too, will still be flourishing in 2020, and that News Ltd and Foxtel can only get stronger. “News knows no other life than in the media,” he told staff in a video address. “It’s what we do and what we believe in. That’s why we’re confident about all forms of media”.

He’d be confident, too, that Rupert is not about to pop his clogs.

Now bald and a cancer survivor, Australia’s (and the world’s) most powerful media magnate has recently been looking fitter and sharper than for many years. Anyone who watched him give evidence to the Leveson Inquiry in London’s High Court in April could see he’s whip smart, and as tough as ever. And similar vital signs were visible on his latest trip Down Under last November.

Back in 2008, in The Man who Owns the News, Michael Wolff portrayed Murdoch as a deaf, doddery old man who can’t keep up with the conversation, is remarkably ignorant about modern technology, and makes increasingly bad decisions.

But Rupert has neither lost his marbles nor loosened his grip on the $50 billion global empire he built. And, with 40% of the voting shares in News Corporation, it will take an earthquake to wrest it from his grasp.

Murdoch’s local company, News Ltd, employs close to 3000 journalists and publishes two-thirds of the daily newspapers sold in Australia, and even with the radical surgery (and inevitable job cuts) announced this week, it will continue to wield considerable market and political power. In fact, by mopping up James Packer’s 25% share in Foxtel and 50% of Fox Sports, plus its $30 million takeover of Business Spectator, it is likely to become even more of a dominant force.

In recent times, The Australian and the Daily Telegraph have been hammering away at the Labor government, with relentless attacks on the carbon tax, the mining tax, the Rudd stimulus, the Pink Batts scheme, and, of course, Labor’s allies, the Greens. And you can see the results of this in the polls and in the tone of the national conversation, (though we don’t claim that’s all Rupert’s doing).

It’s perfectly possible, of course, that Murdoch didn’t decree the “jihad”, as communication’s minister Stephen Conroy has dubbed it, but it’s inconceivable that it would have survived without his approval. As one senior News Ltd insider told The Power Index recently, “It’s a family company. No one thinks they don’t work for Rupert.” And as John Hartigan recently discovered, even his most trusted executives can catch a bullet.

What this means is that Murdoch doesn’t have to tell everyone exactly what to do, because his editors—who are an incredibly loyal bunch—are constantly trying to second-guess him and keep him sweet. Pleasing the boss is the way to get on.

A more difficult question is what his power brings him nowadays. Back in 1995, Paul Keating warned Britain’s would-be prime minister, Tony Blair, that Murdoch was only interested in dealing with governments to advance “his business”. But it seems clear that he also loves being a player, both for the thrill of the game and to propagate his view of the world.

That’s why his 175 newspapers around the globe backed the Iraq War in 2003. It’s also why he was such a supporter of Margaret Thatcher, Ronald Reagan, George Bush and (for a time) Tony Blair.

But while Rupert is a free marketer and right-wing conservative, he’s also an opportunist who likes to back winners. He studies the polls, sniffs the air, and backs those he thinks will prevail, because he knows that governments can give him access to the corridors of power, while oppositions cannot.

Once there, he uses his opportunities ruthlessly. One of the most shocking revelations from Britain’s Leveson Inquiry is the way in which Murdoch’s editors and executives lobbied the British government over News Corp’s $12 billion BSkyB takeover deal in 2010-11, and how enthusiastically the Murdoch bid was backed by Culture Secretary, Jeremy Hunt.

Another is the extraordinary number of high-level meetings between Murdoch’s executives and senior British government ministers. Rupert revealed in his witness statement to Leveson that he met Tony Blair for lunch dinner, tea, drinks or a chat 31 times in nine years. He met Gordon Brown (who was Chancellor of the Exchequer before becoming PM) 17 times in 12 years.

Murdoch’s court favourite and ex-CEO, Rebekah Brooks—previously editor of the News of the World and The Sun—confessed to 185 meetings with prime ministers, opposition leaders and cabinet ministers in little more than a decade, including 31 lunches, dinners, drinks and chats with Blair, 17 with Brown, and six with Britain’s current PM, David Cameron.

Cameron, for his part, revealed 31 meetings with Murdoch’s editors and executives in 15 months, including seven with Rupert himself. He also had that famous free flight to Santorini in 2008, before he was elected, to meet Murdoch on his yacht and petition for support.

The fascinating question, of course, is whether anything like this happens in Australia … and if not, why not.

Could it be that Australia is too small to bother with? Are our politicians less easily swayed? Are Murdoch’s Australian newspapers less powerful and less rabid than The Sun? Or does Murdoch no longer need favours from government because he has already got what he wants? Or does it just happen and we don’t know about it?

Sadly, we don’t know the answer. But it’s time somebody asked.

One might argue that Murdoch has won few major favours from Australian governments since 1986, when Keating and Hawke’s changed the media laws and allowed him to buy the Herald & Weekly Times (which had been vigorously anti-Labor). But since that deal sealed his control of two-thirds of Australia’s print media, there’s been precious little left for him to ask for.

He did get Fox Studios from Keating in 1995 and won approval of Foxtel’s mergers with Optus TV and Austar. But, just as importantly, he has been left alone. No government has been game to inquire into media concentration or propose that News Ltd sell newspapers to reduce its market power: they simply wouldn’t dare.

In the aftermath of the phone hacking scandal, Britain’s politicians and media have become much braver in standing up to Murdoch’s power. The Labour Party is even saying he should be forced to sell The Times or The Sun, to take his national newspaper market share below 40%.

But no one in Australia has ventured anything so drastic, even though the concentration is much higher. The most the Gillard government has dared to do is accuse The Australian and Telegraph of running a campaign of regime change and stop News Ltd getting the Australia Network contract, which would have increased its footprint further.

But in the long run, neither of those acts will dent Murdoch’s political and market power. Nor will they deter him and his editors from using it. Indeed, it’s hard to see an Australian government ever doing anything to achieve either of those things.

The only way Rupert’s power will diminish is through the continued decline of the newspaper industry or if, to his great surprise, he turns out to be mortal after all.


This article first appeared on The Power Index.


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