RUPERT MURDOCH

Born in 1931, Rupert Murdoch has built a vast business empire and he is now the scion of a formidable media dynasty. In recent weeks Mr Murdoch’s name has been splashed all over the press as a result of his involvement in the phone hacking scandal which has gripped the British media. However, prior to these unsavoury allegations Mr Murdoch was still a very public figure: the 13th most powerful person in the world according to Forbes. So, we must question the old maxim and ask ourselves, is there really no such thing as bad publicity?

The son of Sir Keith Murdoch and Elisabeth Joy Murdoch, Rupert grew up in Melbourne, Australia. His is not a rags-to-riches tale, and he enjoyed a comfortable childhood as the son of a distinguished journalist, attending the prestigious Geelong Grammar School where he got his first hands-on experience of the media, co-editing the school newspaper. In fact, one could argue that newspaper ink runs through the Murdoch family veins instead of blood – Rupert’s father was a renowned war correspondent and later, he owned News Limited, established in 1923. Boasting impressive academic credentials, Murdoch read PPE at Worcester College, Oxford University. However, within a fairly short space of time after finishing his degree Rupert decided to return to Australia in order to take over the family business upon his father’s death in 1952. This was an important step in Rupert’s career – he turned the corporation’s main newspaper (The Adelaide News) into a roaring success, something that would come to be a hallmark of his later career moves. Even at a relatively young age, Rupert was never satisfied with simply being competent – he never rested on his laurels, and was always looking for the next challenge. It would seem that Rupert was not even happy with being successful – he wanted to be the most successful.
In his early newspapering years, Rupert was to pursue a strategy of M&A in order to further the expansion of the family business. Some of his early acquisitions included the Perth Sunday Times and over the next few years, he went on to acquire a number of other regional and suburban newspapers across Australia. In 1984, Murdoch was awarded the Companion of the Order of Australia for his services to publishing – proof of the level of industry recognition that he had already garnered.

Although Rupert Murdoch enjoyed commercial success in the newspaper industry, he was not without his critics. He applied a set formula to the majority of his newspapers (specifically, the tabloids) whereby he used a combination of salacious headlines, gimmicks to garner sales and a plethora of stories featuring sex, drugs and scandal in order to increase profits. Journalists who prided themselves on intrepid investigative reporting and high quality writing professed to be disgusted with the Murdoch brand of fast news and scandalous stories. Yet at the same time, one could be forgiven for thinking that this was jealousy disguised as distain. He shocked the world in 1969 by acquiring British publication The Sun and transforming the ageing liberal paper by featuring a topless model on page three. This was a shocking move at the time, but Murdoch has more than confounded his critics because in 2011 the two words, ‘Page Three’ are more often associated with a scantily clad model than with the pagination of a newspaper. Given the fact that The Sun is now one of the most popular tabloids in the UK, Murdoch really has had the last laugh when it comes to his inimitable red top repertoire.

His style may not have been that of the traditional serious model of journalism, but his publications undoubtedly gave the public what they wanted – the fact that The Sun had 10 million daily readers by 1997 says it all.

Rupert Murdoch might be frequently associated with the tabloid press, but that it not to say that he has no interests in the broadsheet newspaper industry. In 1981 he acquired the esteemed British broadsheet, The Times seeking to turn it around from the loss-making but prestigious publication it formerly was, to make it a profitable and prestigious paper. By bringing a broadsheet into the stable, Murdoch was expanding his empire to include the high brow as well as the high volume sales of the tabloids. This was to prove a canny business move, bringing him the credibility to go hand in hand with the cash. This move was to coincide with Murdoch’s increasing politicisation in the UK throughout the eighties and nineties when he was a vocal supporter of Margaret Thatcher. However, when the Iron Lady finally fell, Murdoch was later to switch his allegiance to the Labour Party and in particular, to its leader – one Mr Tony Blair. On 18 March 1997 the paper ran the headline, ‘THE SUN BACKS BLAIR’ just six weeks prior to the landslide victory of Blair’s New Labour Party. This allegiance between Blair and Murdoch was to prove an important political manoeuvre – Blair had access to the readers of one of the country’s biggest media outlets and in return he had given a number of exclusive interviews and comments. The paper’s pro-Labour stance would remain for subsequent elections in 2001 and 2005, which Labour won both times. Notably, in 2009 the paper switched its colours yet again and backed the Conservative Party who went on to form the current Coalition government with the Liberal Democrats after the 6 May 2010 election. As these election results show, Murdoch’s red top has become like an additional key ‘seat’ for politicians to win in order to enjoy political success.

Now, we have established that Rupert Murdoch has been a runaway success in the newspaper business but that is not where the Murdoch media empire ends. In fact, News Corporation (of which Rupert Murdoch is Chairman and CEO) owns a 39% stake in broadcaster BSkyB and Murdoch had sought to acquire the whole of the company in a bid worth £8bn. However, in July 2011 Murdoch was somewhat backed into a corner as a result of public outcry over the phone hacking scandal. He was also facing the prospect of a call by MPs to withdraw the bid for BSkyB and was facing a Select Committee Hearing to investigate the extent of his knowledge regarding alleged malpractice by employees. News Corporation issued a statement saying that it was, “too difficult to progress in this climate” and that was why the bid had been withdrawn. While the retraction of the bid is dispiriting enough, it must be a real kick in the teeth for Murdoch that the existing 39% stake in BSkyB could be at risk if News Corporation is deemed by Ofcom to fail the “fit and proper” test for ownership. Watch this space.

So, having beaten about the bush we need to discuss the phone hacking allegations although it is worth noting that regardless of the waves of bad publicity, entrepreneurs should not let negative headlines overshadow Murdoch’s achievements in the world of business. The media storm hit News Corporation when The Guardian revealed that The News of the World had targeted the voicemail of the murdered schoolgirl Milly Dowler. It was alleged that investigators had been listening in to her voicemail, and that they had even deleted messages when her mailbox was full. What makes this all the more shocking is that it was done while Milly was still missing, leading police and as a result, Milly’s family to believe that she may still be alive. This led to widespread public revulsion as well as a cavalcade of negative press. The culmination was a political inquiry and the closure of News of the World. The whole affair initially had a negative effect on the share price of News Corporation with the company losing several billion dollars in market value after the scandal broke. However, the share price later rallied after the company announced that it was buying back £3.1bn of its own shares. Although many mourned the closure of the News of the World, there has already been speculation that News International is set to launch a Sunday edition of The Sun to replace NOTW – rumours which gathered steam when it transpired that sunonsunday.co.uk and thesunonsunday.co.uk has been registered by News International Newspapers Limited.

Love him or loathe him, Rupert Murdoch is a prime example of a man who knows how to run a business. With a net worth of US$ 7.6bn according to Forbes, Rupert Murdoch is the 117th wealthiest person in the world. Of course, there is more to being a powerful and influential player in the world of media than mere monetary success. Murdoch is wealthy, certainly, but it would be entirely possible to be as rich as Croesus without being truly powerful. Murdoch’s power stems from his political allegiances, his canny business acquisitions and his shrewd commercial decisions. It remains to be seen whether Murdoch’s strengths will ultimately become a victory that is Pyrrhic – the very political moves that saw him listed at number 13 in the Forbes list of the most powerful people could be his undoing. However, with Rupert’s resilience it seems unlikely that the injury to his reputation will be terminal. Time will tell, but from where we are sitting, it looks like there really is no such thing as bad publicity.