Rupert Murdoch's retreat to power

As legal action over News Corp phone hacking escalates, Rupert Murdoch's decision to distance his name from directorial responsibility may preserve his family's influence for another generation.

It may just be coincidence that this week’s charging of former News International executives Andy Coulson and Rebecca Brooks for alleged phone-hacking offences came just days after Rupert Murdoch announced he was giving up his directorships of the UK newspaper company. Events had been heading in that direction, after all, and neither the charges nor the resignations have in themselves been received as surprising developments.

News Corporation decided some weeks ago to separate its publishing and entertainment arms in an attempt to insulate the lucrative latter from the fall out of the UK phone-hacking scandal on the global business. James Murdoch had already walked away from the UK operation, and in resigning his directorships, Murdoch senior has now created further distance between the family name and News Corp’s British journalism interests. A final sell-off or closure of the remaining UK titles seems ever more likely, as the global corporation seeks to contain the damage caused by the constant drip-drip of phone-hacking revelations to its wider operations.

The prospect of lengthy court cases, generating blanket news coverage and a constant stream of negative publicity about the management and editorial culture of News International down the years – a culture which, as directors, the Murdochs could not duck personal responsibility for allowing to grow and persist – may well have been the prompt for Rupert’s very public distancing of himself from the business. He’ll continue to chair the board, but the message is clear: News International is no longer a Murdoch fiefdom in the way it has been perceived to be for more than 40 years.

In a comment piece for The Guardian this week, Murdoch’s biographer Michael Wolff notes the legal advantages of the move for Murdoch. "By vacating these board positions both he and his son have now moved their technical presence out of Britain – a step removed (although by no means out of reach) from subpoenas, further regulatory actions, and the ‘fit and proper’ standards.” This separation of powers, if we want to call it that, will be key to a corporate defence against any future legal actions against News Corp in the United States.

Wolff adds, as I also speculated some weeks ago, that the journalistic wing of News Corporation may now be moving its centre of gravity back to Australia, where everything began for the Murdochs, perhaps to be run by Lachlan in what Wolff describes as "the Murdoch model: using the cash flow from newspapers to buy television assets”. Few outside of his inner circle know what Murdoch senior has in mind, of course, and those who do aren’t telling. Australians might now ponder, however, the implications for their own political and media culture of a Murdoch empire once again centred here.

What can be said with certainty is that the extraordinary influence of Rupert Murdoch on British politics, exercised for decades through close oversight of his News International newspapers, is over. It ended with the closure of the News Of The World, the collapse of the BSkyB takeover bid, and the subsequent round of public testimonies and qualified mea culpas we have seen in the year since the phone-hacking scandal finally broke into the headlines. As suddenly and unpredictably as the monolithic apparatuses of the old Soviet bloc, seemingly absolute, untouchable power fractured and dissolved before our eyes, exposing the flaws and frailties of the flesh-and-blood human beings who once wielded it so arrogantly. Some of them may go to jail – the charges faced by Coulson and Brooks carry two-year prison sentences. Others, including James Murdoch himself, are reported to be persona non grata within an embarrassed and frightened corporation. All involved are tainted, fairly nor not.

Three big titles remain in the NI stable, though, and attention in the UK will now shift to the issue of their future and likely editorial direction. British politics is highly volatile right now, as the economic stats continue to worsen and the Coalition government strains to show unity around issues such as constitutional reform. How will News International’s still-powerful titles (in circulation terms alone) contribute to political debate in the coming period? No one knows. But detaching the Murdoch name from directorial responsibility for their activities may be intended, amongst other things, to preserve their influence at least until the next general election. We await signs of how that influence will be deployed.

Brian McNair is a Professor of Journalism, Media and Communication at Queensland University of Technology. This story first appeared on The Conversation. Reproduced with permission.


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