What Can We Learn from the Murdoch Scandal? Part 1

While the hacking scandal is losing steam in the mainstream press, the revelations keep coming. Only yesterday, the Independent revealed that, among other things, Murdoch executives and editors met with members of the Cabinet over 60 times since last May. The damage done to Cameron and the coalition is as yet unclear. While things grind on, I’m taking this moment to reflect on the significance of what’s happened so far. Before continuing, I just want to say that there has been some excellent coverage of this in online media, with hats off to Ryan Chittum at the Columbia Journalism Review and Richard Seymour at Lenin’s Tomb, whose work has contributed to the arguments I’m considering here. For a good blow-by-blow account of what’s come out so far, I would check here.

The Meaning of Murdoch

For some, Murdoch is the most powerful right-wing demagogue of our time, combining odious conservatism with a global reach.  Looking into the workings of his business, however, something altogether more banal emerges.

First of, there is the question of Murdoch’s reach. While the scale of News Corp is often discussed, and it is indeed a massive organization, owning over 1445 subsidiaries in more than 50 countries, I would argue that this is more a reflection of current media dynamics than anything else. As one article points out, the media industry has contracted from 50 companies in 1980 to 5 today, of which News Corp is one among CBS, Disney, Bertelsmann and Time Warner.[1] In 2010, News Corp ranked second to Disney, according to the Fortune 500. Where it ends up, with $6.6 billion already lost from the market value of the company and the possibility of losing it’s broadcasting license in the United States, is not entirely clear. News Corps reach as a news organization may be vast, what should be emphasized is that behemoth-like media organizations have become a hegemonic feature of today, and in this News Corp is not alone. The tendency towards conglomeration has been a feature of capitalism for some time.

Secondly, there are the politics. Here I think it’s worth considering the possibility that, like any large multinational, News Corp is primarily concerned with profit above all else. When viewed from this angle the political bullying and smears, as well as the support, look closely entwined to whatever Murdoch’s needs are at that time.

As Arsenault and Castell’s wrote in the Journal of International Sociology[2], Murdoch’s personal conservatism can subside when regulation of the media comes up as a question. Hence the switch to Labour support when media regulation was under discussion, documented in Pilger’s Breaking the Mirror, and hence The New York Post’s endorsement of Hillary Clinton for Senator of New York when her position on media regulation chimed with Murdoch’s. This pattern is also reflected in the company’s financial contributions to politicians, as well as Murdoch’s personal ones. As the authors write: “News Corp’s contributions exhibit little political loyalty. Depending on the regulation under review and the broader political climate, these expenditures vary across political lines, but almost always coincide with critical media ownership legislation.”[3]

The bullying power of Murdoch, when seen as part of a broader strategy, makes sense. This position is also reflected by Jay Rosen at the Guardian, in an article I was pointed to here:

“Here’s my little theory: News Corp is not a news company at all, but a global media empire that employs its newspapers – and in the US, Fox News – as a lobbying arm. The logic of holding these “press” properties is to wield influence on behalf of the rest of the (much bigger and more profitable) media business and also to satisfy Murdoch’s own power urges.”

Interestingly, theories about Murdoch-the-politician and Murdoch-the-businessman are both aired in Rob Greenwald’s documentary Outfoxed, without a decisive ruling either way. Fox News is an interesting case, which I’ll be discussing more below.

At the same time, there are things that make News Corp different. As Arsenault and Castells point out, News Corp has a unique style of “vertical leadership” which permeates the entire organization, as well as remarkable consistency in management. As Thussu argues: “What distinguishes News Corporation from its rivals such as AOL-Time-Warner and Disney Corporation, is the fact thatit is the only media conglomerate created, built and dominated by the vision and tenacity of one individual”.[4] The effect of this is that News Corp can be respond rapidly, attack consistently and, as politicians have often found, maintain a grudge for some time.

While the authors don’t argue this, I would add that this type of power will doubtlessly inspire megalomania, with the results being a kind of spiteful pettiness.

The individualistic nature of the empire has also been linked by some to News Corps criminality. As Fortune Management writer Geoff Colvin argues (in the same article cited in paragraph 1):

“…consider the most infamous scandal companies of the past several years – Enron, Worldcom, Healthsouth, Adelphia, Parmalat. Like News Corp., each had risen from nothing to huge success under one man, and through various means he had maintained total effective control. Employees felt they were beholden to a person who was beyond outside governance. The results were devastating to shareholders, employees, customers, suppliers, and communities.“

So what we have is a rather stark example of capitalism creating a force that pushes debate to the right when it suits its interests (as it did, for example, when Murdoch was attacking the print unions), demands political loyalty through a regime of fear, and throwing his excessive circulation behind those who suit his purposes. If you weren’t already convinced political parties served the interests of capitalism, you here have an example of one sector of capitalism virtually creating a political force of it’s own. At the same time, the weakness of the individualistic structure that invites scandal is also one of the strengths.

Interlude: Fox News

There are, of course, times when the lines are blurred and, here, Fox News is the most interesting case. Originally launched by Murdoch in an attempt to diversify into news broadcasting, Fox News has become one of News Corps biggest assets. Costs are low (which one suspects is a useful byproduct of not actually reporting the news) with 30 fewer bureaus than CNN and a third of the staff. Profitability is also assured by political partisanship, as above. As an excellent Rolling Stone article, from which the above figures come, reports, the FCC permitted News Corp to purchase DirecTV in 2002, having blocked EchoStar’s acquisition as being anti-competitive, and gave it to them for $6.6 billion, around a 5th of the original bid.[5]

What’s interesting about Fox, and this is what the above article primarily focuses on, is the fact that the right wing agenda is now spiralling out of control, causing considerable discomfort within the Murdoch clan.

For more on the effects of the Murdoch scandal and radical ideas for changing the media, see part 2, up later today.

[1] Kratz, M Corporate Influence: How the Media Merger Trend Changed the Book Publishing Industry and the Distribution of Information, (2009) Thesis, Pace University

[2] Arsenault, A, Castells, M Switching Power: Rupert Murdoch and the Global Business of Media Politics: A Sociological Analysis (2008) Journal of International Sociology, Vol. 23, pp. 488-513

[3] ibid. pp. 498

[4] Thussu, D K The ‘Murdochization’ of news? The case of Star TV in India (2007) Media, Culture and Society, Vol. 29 pp. 593

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