The Rise and Fall of the Murdoch Empire. John Lisners
his detractors to win. Once again, as with his battle for the UK Times, there were those who loudly voiced opposition, declaring that he was unfit to run such a prestigious and influential newspaper and that he was bound to take it downmarket. Dow Jones and its WSJ subsidiary are the largest and most influential financial information provider and newspaper in America. It is the supreme powerbase from which to assert influence with the country’s elite. Murdoch’s aggressive battle to achieve victory came at a high price. He paid more than $5 billion for the privilege but while that may have satisfied him it did not please all of his shareholders. There was considerable rumbling among a large number of News Corporation investors who considered Murdoch had paid well over the odds for a trophy at a time when the print industry was being overshadowed by digital media.
But what may seem like an unprofitable investment at first instance can very soon bring greater dividends. In monetary terms, what Murdoch loses on the swings he mostly gains on the roundabouts. This may come about in gaining a political advantage concerning regulation or by smoothing a path to a future takeover. He has proved this time and again, despite the occasional bad investment. He started The Australian, a national newspaper, in the mid-1960s and, despite years of loss-making, it proved to be a great asset considering the leverage it has given him in his country of birth. There he still controls the majority of newspapers. Murdoch’s influence on Australian politics is unbelievably powerful. He can make and break prime ministers as will be seen in a later chapter on the sacking of Gough Whitlam, a former Labour PM of Australia whom Murdoch had initially supported.
As with The Australian newspaper, Murdoch has continued to support influential loss-makers like the Times of London and the New York Post. It is a given that the proprietor of a national newspaper is granted access to politicians and governments apart from any social cachet such ownership brings.
In his 80th year, Murdoch focused on taking full ownership of British Sky Broadcasting. It was a prize Murdoch felt entitled to, in spite of a minority holding of 39.1 per cent, which gave him the controlling interest. Murdoch had nearly bankrupted News International companies through his belief in the future of Sky. His then managing director in London, Australian Bruce Matthews, urged his boss against funding Sky. Bruce, with whom I had shared many a drink in Fleet Street, told me, ‘I warned Rupert it wouldn’t work and that it could bring the whole organisation to its knees.’ And, to a degree, Matthews, who had managed the London newspapers’ move from Fleet Street to Wapping, was right. The crisis of the early 1990s came close to bankrupting the group. But Murdoch had faith in his vision and urged his shareholders to ‘hang on in there’. Those who supported Murdoch’s vision were not disappointed. By 2011 BSkyB had become a cash cow.
Bringing the whole of BSkyB into the News Corporation fold was also part of Murdoch’s dynastic planning strategy. Murdoch had always made it clear that his family would inherit his vast fortune. He had scoffed at public declarations made by Robert Maxwell, his old adversary in the battle for News of the World, who boasted he would leave nothing to his sons. True to his word, Maxwell’s toxic legacy was written in red. His sons Ian and Kevin Maxwell were left a massive company debt and endured years of agony, having to account to police and financial regulators for their father’s fraudulent stewardship of London’s Mirror Group Newspapers.
Murdoch launched his £7.8 billion bid for full control of the satellite broadcaster in June 2010, although BSkyB rejected the offer as being too low. The cost, however, would be the least of the bid’s problems. The primary considerations were EU and UK regulations and opposition to Murdoch’s dominance of the media by interested parties, including Parliament and members of the public. The first hurdle to overcome was Europe but anti-trust regulators at the European Commission in Brussels gave clearance for the bid in December 2010. The next hurdle was a possible intervention by the UK business secretary, Vince Cable. He could prove difficult and was expected to intervene on grounds of media plurality and to demand that the press regulator Ofcom investigate the bid before granting approval. In the meantime, some of Murdoch’s competitors, including the Telegraph, the Daily Mail, Trinity Mirror – whose interests include the Daily Mirror – and executives at the BBC and Channel 4 wrote to Cable urging him to block the takeover.
At this juncture good fortune smiled on Murdoch. David Cameron became prime minister in the Conservative-Liberal coalition government following the general election of 6 May 2010. His director of communications was Murdoch’s former editor Andy Coulson, who remained a close pal of Rebekah Brooks. James Murdoch, as head of News International, had given his newspapers’ backing to Cameron, as had Rebekah Brooks when she was editor of the Sun and then as chief executive officer of News International. She had by now become a member of the influential social and political circle known as the Chipping Norton set. This was made up of high fliers with country houses in the Cotswolds. Brooks was on first name terms with Cameron, as she had been with the two preceding prime ministers, Tony Blair and Gordon Brown. Such was her political clout that both Brown and Cameron had been guests at her wedding to racehorse trainer and author Charlie Brooks who, like Cameron, had been educated at Eton. The elite circle of friends of the PM extended to Murdoch’s daughter Elisabeth, a successful independent TV company owner and film maker, and her PR guru husband Matthew Freud, a great-grandson of Sigmund Freud and who in earlier times had pedalled PR tidbits to the NoW. With such an astonishing power group rooting for the Murdoch takeover of Sky, business secretary Vince Cable would have to tread carefully if his intention was to stop News Corporation taking over. Whatever Cable’s private views he would have to appear neutral. In the event, what happened can only be described as media mayhem bordering on comedy, despite the seriousness of the business at hand.
The Daily Telegraph has always been a solidly conservative newspaper catering to an affluent centre-right readership. It has an enviable record for excellent news coverage. In recent years it has become more adventurous in its content and won wide acclaim for its exposé of the expenses scandal involving Westminster politicians. In the past, however, it has often looked down from its lofty perch on the red-top newspapers and their undercover operations. It was surprising, then, that the Telegraph was to write to the business secretary imploring him to reject News International’s bid and barely a week later devised a newspaper trap for the politician in the best underhand tradition of News of the World reporters.
Employing a classic scam, the Daily Telegraph sent two attractive women reporters in their twenties pretending to be concerned mothers, one blonde, the other brunette, to speak to Cable at his constituency meeting. The purpose of their sting was to elicit information on how the coalition was getting along. Cable sang like a canary. Unbelievably, the government minister felt compelled to give vent to his innermost feelings to two women who minutes previously had been complete strangers. Commenting on the state of the coalition government, he offered, ‘Well, there is a constant battle going on behind the scenes. We have a big argument going on about tax and that is party political because I am arguing with Nick Clegg [the deputy prime minister and Lib Dem leader] for a very tough approach and our Conservative friends don’t want that.’
When the conversation turned to Rupert Murdoch’s takeover bid, the business secretary hurled discretion to the wind. ‘I am picking my fights, some of which you may have seen … and I don’t know if you have been following what has been happening with the Murdoch press, where I have declared war on Mr Murdoch and I think we are going to win. Majority control [of BSkyB] would give them a massive stake. I have blocked it using the powers that I have got and they are legal powers that I have got. I can’t politicise it but from the people that know what is happening this is a big, big thing. His whole empire is now under attack…’ As if to emphasise his own might as a cabinet minister, Cable boasted of a ‘nuclear option’ available to him. ‘Can I be frank with you? And I am not expecting you to quote this outside. I have a nuclear option. It’s like fighting a war. They know I have nuclear weapons but I don’t have any conventional weapons. If they push me too far then I can walk out of the Government and bring the Government down. And they know that.’
A report of his conversation with the reporters was published in the Daily Telegraph but notably omitted his views on Murdoch. Executives at the newspaper must have been well aware that to reveal his antipathy to the takeover would have been