The shake of Rupert's power finger

There is still much strength and power behind media mogul Rupert Murdoch, but as the hacking scandal continues to weigh, 2012 could see his influence wither.

The Power Index

Rupert Murdoch is the one man who really fits the media mogul mould, made famous by Evelyn Waugh's fictional press baron, Lord Copper, in the 1938 novel, Scoop. As proprietor of the Daily Beast, the great Lord Copper was so fearsome that none of his employees ever dared disagree with him.

The closest they ever came to ‘No’ was to tell him bravely, "Up to a point, Lord Copper, up to a point."

At 80, the Sun King is much the same. He still flies into Australia to sack his right-hand man, rip apart the front pages and terrify his editors, and they hang on every word, in case they should fail to catch a passing wish.

Meanwhile, his 175 newspapers around the world dutifully spout his views – on the Iraq War at least – and back whatever political leader he decides to endorse, be it George W Bush, Ronald Reagan, Margaret Thatcher, Tony Blair, John Howard or even Kevin Rudd.

Most recently, in Australia, several of his papers have been striking fear into the Labor government by declaring ‘jihad’ on Gillard and running "a campaign of regime change”, as communications minister Stephen Conroy has described it. We have no doubt the old man has given it his blessing.

Eventually, Rupert must slow down or die, but if he lives as long as his mother, Dame Elisabeth, he'll have at least another 22 years to rule the roost, unless the News of the World hacking scandal knocks him off his perch. And word is he was looking fitter and sharper on his recent trip Down Under than he has for many years.

Back in 2008, Michael Wolff's seminal biography, The Man who Owns the News, 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, like paying $US5.7 billion for the Wall Street Journal, $2.8 billion of which had to be written off within two years. Yet his board and top executives apparently still think he's a genius who sees things they cannot.

Many stockmarket analysts, meanwhile, view him as an old man with a fixation for newspapers, who can't stop buying things, and whose departure could only push up the share price.

Yet Murdoch still publishes two-thirds of the daily newspapers sold in this country, and enjoys using his media might to get what he wants. In Australia, he has recently installed himself as News Ltd chairman to keep an eye on newly-appointed chief executive Kim Williams, so it will be interesting to see who wins the battle for colonial supremacy. But ultimately there's no doubt that the power flows down from Rupert and his family, who control around 40 per cent of the votes in the international media empire. And they won't be vacating their throne in a hurry, however hot things get with that UK hacking inquiry.

So how much influence does Murdoch have on what we read in Australia?

The simple answer is, ‘a huge amount’. 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 just discovered, even the most trusted executive can get the bullet at any time.

What this means is that Rupert 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.

The Iraq War is a case in point. Out of Murdoch's 175 newspapers around the world, only Hobart's The Mercury failed to get the message (or pick up the signals) that Rupert wanted his papers to support George W Bush's war, which he believed would cut the oil price to $20 a barrel. Naturally, The Mercury was soon told when it stepped out of line.

Similarly, The Power Index doesn't believe for a moment that Murdoch actually tells Chris Mitchell or Paul Whittaker what to put on the front page of The Australian or the Daily Telegraph. But we're damn sure the old fella looks at those papers regularly and knows exactly what they're doing. And we're sure they wouldn't be doing it if they thought Murdoch would disapprove, or if he did.

Nor would they be attacking the Greens and the Gillard government so ferociously, and campaigning against action on global warming, if Rupert hadn't given them the nod. His approval is vital.

As a guide to how this relationship works, we love the story of how News Ltd's papers hedged their bets at the 2007 federal election, when Melbourne and Adelaide plumped for John Howard, while Sydney and Brisbane went for Kevin Rudd. The explanation is that Murdoch dined with his two sets of editors, four days apart, and decided between the two dinners that Rudd was probably going to win. He didn't tell his editors whom to back, but they all did their level best to please him.

That said, Murdoch's editors don't only listen to him because he's the boss. He also knows what he's talking about, because he started life as a journalist, genuinely loves newspapers and probably understands them better than anyone in the world. He also reads his papers all the time and knows what's in them. And one of his attractive qualities is that he believes in the profession, and supports it wholeheartedly, unlike many proprietors who view journalists and their ilk with distaste.

There was a great illustration of this many years ago at Gretel Packer's wedding in Sussex, England, where Kerry Packer was rude and obstructive to the media who had flown in to cover it, while Rupert happily held court in the churchyard with his family, answering questions and posing for pictures.

Murdoch believed the media had every right to be there. Packer clearly did not.

Famously a socialist when he was at Oxford University, Rupert is now evidently a right-wing conservative. Yet, above all, he's an opportunist. He studies the polls, sniffs the air, and backs those he thinks will win, because he knows that governments can give him what he wants, while oppositions cannot.

He's also an outsider, who likes to attack the ‘establishment’, of which he claims not be a part. In the culture of his media empire, this allows his journalists and executives to divide the world into ‘Them’ and ‘Us’, and cast themselves as victims and battlers, fighting against a cynical and comfortable elite.

And this leads to the other essential element of News Ltd culture, which is aggression. When Murdoch's papers pick a fight, they go in hard, boots and all, to kick their enemies. In the UK, they tap their phones and put them under surveillance too. And there's little doubt this comes from Murdoch himself. In his business style and editorial strategy he has never pulled any punches; he has always been ready to attack and always ready to characterise his aggression as self-defence.

To portray that culture in any other light, as Rupert has strenuously tried to do with phone hacking in the UK, simply does not wash.

The big question now about Murdoch is how much his power will be damaged by the News of the World hacking scandal and the various police and parliamentary inquiries that follow. We wouldn't expect him or his emissaries to be as welcome with the British government as they were between May 2010 and July 2011 when they met ministers twice a week on average. And we'd also be surprised if his son and heir James makes it through the process unscathed. But whether the examination and excoriation will really spell the end of Murdoch power is too early to say.

However, even back in Australia, politicians and the media no longer fear Murdoch's News Ltd as much as they did, and more have been prepared to stand up and criticise. That's partly because the Gillard government has sunk so far in the polls it has little left to fear. But it's also because the revelations in the UK have rendered Rupert and his papers so far beyond the pale that it feels safe to throw stones at him.

In the next year, The Power Index doesn't expect too much in the way of regulation from the Finkelstein media inquiry (apart from a strengthened Press Council). But we would expect Murdoch to try to repair his reputation and restore his power. If the Coalition gets back into government, he'll obviously find that much easier, but ultimately his fate will be settled by what happens in the UK. As he is rapidly discovering, there are a lot of people there with scores to settle, and 2012 will prove an interesting year.

This article first appeared on The Power Index on December 15. Republished with permission.