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Murdoch – Will he survive?

Posted on: July 28th, 2012

Crisis Management: Murdoch – Will he survive?Crisis response

(Written in 2011)

Old saying: lie down with dogs and you get fleas.  And fleas, like crises, can be devilishly hard to get rid of.

Faced with the monumental phone hacking scandal in Britain, News Corp. Chairman and CEO Rupert Murdoch called every play in the crisis PR playbook: 1) closed the offending tabloid News of the World, 2) hired an international PR firm and other advisors, 3) testified at a parliamentary hearing alongside his son, 4) forced out senior executives at the tabloid and even Dow Jones & Co., 5) dropped the purchase of  a British broadcast company, 6) apologized in person to the family of a teenage murder victim who’d been hacked, 7) ran newspaper ads of apologies and corrective actions, and 8) ordered a board committee independent review.  The efforts didn’t stanch the bleeding.  Why?

  • The tactics were familiar.  Many big companies (BP, Toyota) in serious trouble have done much the same.  They’re the right steps, it’s just that we’ve seen this movie before and they’re less persuasive.
  • The wrongdoing was so egregious that necessary crisis PR couldn’t un-ring this disgusting bell.  Phone hacking royalty and celebrity for juicy stories was one thing, but targeting a dead girl and military war victims and bribing police reached another order of magnitude.
  • Bad news outpaced and eclipsed corporate attempts to right wrongs with a parade of headlines tarring News Corp., Scotland Yard, and the political system.
  • With no “money” invested in the bank of public goodwill there was no goodwill in return.  Tabloid hammering of public figures sells newspapers (and not just for News Corp.) but doesn’t win Nobel Prizes.  How many Brits rallied to Murdoch’s side?
  • Many observers found Rupert and James Murdoch’s testimony disingenuous, disconnected or unbelievable for claiming they didn’t know of the extensive misconduct (perhaps 4000 hacking targets) and saying they weren’t responsible.

The public roar has subsided some but hard questions remain.  Should Rupert Murdoch remain CEO given his un-reassuring testimony and analyst opinions that his departure would actually raise the stock price?  Were deputy-COO James Murdoch’s denials truthful given that two co-executives claimed they informed him of extensive hacking?   Is the internal investigation truly independent since the board committee chief reports to Murdoch Senior?  Most ominously, what is the FBI probe into hacking and bribery finding especially now that company attorneys have ordered New York Post employees to save all related documents.

Barring the scandal spreading significantly to the U.S., News Corp. will prevail over time.  (We don’t talk about BP or Toyota much anymore, do we?)   Nevertheless, Murdoch will never again wield power and fear in the U.K.

Finally, as a former journalist, it’s been fascinating to watch the discrepancy between the way News Corp. entities The Wall Street Journal and Fox News reported their owner’s travails.  The Journal dug into it. Fox mostly gave it a pass.

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