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Even on the defensive, Murdoch can steal thunder

Source : REUTERS
Last Updated: Wed, Jul 13, 2011 21:31 hrs
Even on the defensive, Murdoch can steal thunder

Even as he scrambles to contain the phone hacking crisis that has rocked his British media empire, News Corp boss Rupert Murdoch has maintained the aura of a man in control.

Three times in the last week Murdoch made bold political and commercial moves that set the news agenda and put politicians, who have quickly turned on the man they once courted, on the back foot.

All a part of a damage limitation exercise that has been forced on the 80-year-old press baron, they nonetheless underlined his reputation as a decisive, sometimes ruthless boss who has dominated the British media landscape for decades.

The first bombshell came last Thursday with the shock closure of News of the World, the first newspaper Murdoch acquired in Britain more than 40 years ago and the country's most popular weekly tabloid.

The title is accused of illegally eavesdropping not only on celebrities and royals, but also ordinary people including the voicemail of a kidnapped girl later found to be murdered and the families of British soldiers killed in action overseas.

The decision stunned staff at the sensationalist tabloid, who were convinced they had been sacrificed to save News International boss and Murdoch favourite Rebekah Brooks, editor at the time of some of the worst hacking offenses.

Murdoch hoped the move would be enough to rescue plans to buy up the whole of British broadcaster BSkyB, a $12 billion deal that needed government approval to go through.

But the phone hacking revelations kept coming and other Murdoch titles the Sun and Sunday Times were dragged into the scandal, forcing News Corp to move again.

On Monday the company withdrew commitments it had made to allow it to bypass a full Competition Commission enquiry, stealing the thunder of Culture Secretary Jeremy Hunt who referred the bid to the commission as expected.

And two days later News Corp withdrew its BSkyB bid, hours before rival political parties were about to vote in a rare show of unity to urge the Australian-born magnate to do exactly that.

"This is not what he wanted, but I think he realised he had to and that the sooner he did it, the sooner you go forward," said Lawrence Haverty, a portfolio manager at Gamco Investors Inc whose firm owns millions of shares in News Corp.

"I've known him (Murdoch) for a long time and don't think he directed wrong to be done, but he did put the environment in place allowing it to happen," he told Reuters.

Asked whether he approved of Wednesday's decision to ditch the bid, which had raised concerns about Murdoch's domination of the British media, Haverty replied:

"That's a big positive. We as investors didn't want another six to eight months of review of this thing (the BSkyB deal)."

TAKING ON THE ESTABLISHMENT

Few are willing to bet against the Australian-born businessman, who has outfoxed rivals throughout his career in British media, even at a time when his public standing is at an all-time low.

In 1969, aged 37, he beat rival tycoon Robert Maxwell to win control of News of the World, prompting a backlash from the British establishment. Indeed, according to Murdoch, Maxwell called him a "moth-eaten kangaroo" during heated exchanges.

In 1981 he bought the Times, much to the chagrin of the political and social elite, and five years later controversially moved his operations from Fleet Street, the historic heart of British journalism, to nearby Wapping.

He sacked striking print union workers, in keeping with then Prime Minister Margaret Thatcher's desire to curb the power of the labour movement, and his cosy relationship with leading politicians since has often come under scrutiny.

Initially a champion of the Conservative Party under Thatcher, his popular Sun tabloid switched to Labour in 1997, the year its leader Tony Blair swept to power.

In 2009, it changed allegiance again with the headline "Labour's Lost It", helping Tory leader David Cameron into Downing Street.

Facing his biggest test yet, Murdoch may have to do without the friendship and support of politicians, who are queueing up to scorn his company and its newsgathering techniques.

"The public being so revolted and disgusted has meant politicians have had to stand up to Rupert Murdoch," said Max Clifford, the country's most prominent PR guru. "None of them wanted to," he told Reuters.

Opinions vary as to what Murdoch should do next, and whether he has done enough to contain the scandal.

Several analysts and fund managers expect News Corp to return to the BSkyB deal when the furore dies down, although for that to happen more heads may have to roll.

"Until somebody carries the can, and somebody apologises at the top of that company, I just think this is going to run on and on," Tom Watson, the Labour member of parliament who campaigned against police and political reluctance to widen the inquiry into phone hacking after 2007, told Sky News.

(Reporting by Mike Collett-White; Editing by Jon Boyle)




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