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Summary:

For a man who’s spent his entire life in the media business and understands it as well as anybody who’s ever lived, Rupert Murdoch is quite…

News of the World
photo: News of the World

For a man who’s spent his entire life in the media business and understands it as well as anybody who’s ever lived, Rupert Murdoch is quite astonishingly inept at crisis management.

The News of the World hacking scandal was broken by the Guardian two years ago, and has been getting worse for him ever since; he’s had all the time in the world to do what every crisis-management professional has at the very top of their list: get out in front of the story, take full control of the situation and full responsibility for all mistakes made, and demonstrate in as public and visible a manner as possible that such things can and will never happen again.

Instead, what we’ve seen from Murdoch and his top executives is lies, obfuscation, pushback, bluster, dissembling, and generally the unedifying spectacle of extremely rich and powerful people doing their very best to never be called to account.

Today’s decision to shutter the News of the World in no way means that Murdoch is finally in control of the story. It’s a business decision, mainly: the NotW brand was fatally tarnished, to the point at which it would have been more expensive to keep it going than to shutter it. The advertising dynamics were poisonous and inescapable: there was little upside and significant downside for any brand which continued to advertise in the paper. On top of that, there would probably have been a reader boycott, too. The newspaper business is all about selling readers to advertisers, and the NotW suddenly had many fewer of the former and almost none of the latter. It was toast.

Murdoch’s axe is falling, tragically, on a group of journalists almost entirely unconnected to the scandal which brought down their paper. None of this is their fault, they don’t deserve this at all, and they didn’t get so much as a “sorry” from James Murdoch, in his official statement, who talked only of how unfair the decision “may feel” and how he intended to “communicate next steps in detail and begin appropriate consultations”.

And as if to prove that he still Doesn’t Get It, Murdoch is – for the time being – standing by Rebekah Brooks, the chief executive of News International, a former editor of the News of the World, and someone whose position is clearly untenable.

Murdoch, then, is being sensibly ruthless when it comes to the News of the World brand. Yes, it’s venerable – 168 years old – but it’s also a liability, and there’s literally nothing he could do to resuscitate the newspaper’s reputation. That explains what happened to the NotW journalists: like it or not, brands still matter, a lot, in media. Think how much more likely you are to get any given call returned if you’re working for the New York Times. Murdoch knows from first-hand experience that once a newspaper brand is sullied, it’s sullied for decades: The Sun‘s Liverpool circulation never recovered from the boycott following its atrocious coverage of the Hillsborough disaster. In media, one dreadful mistake really can redound for generations.

And while the NotW‘s journalists are sadly necessary collateral damage from the closure of the newspaper, Murdoch is being self-defeatingly sentimental when it comes to Brooks in particular and his News International executives in general. In contrast to the seemingly heartless treatment of the frontline hacks, Murdoch is extremely loyal to his most senior executives, and especially to Brooks. And it’s also worth noting that if James Murdoch weren’t Rupert Murdoch’s son and heir apparent, his job would be on the line as well.

The moral of this story, for anybody observing from the outside, is that it’s very, very bad idea for a company to circle the wagons and try to protect its senior executives when they get into trouble. If a handful of senior heads had rolled two years ago, and if News International had volunteered information about how far over the line the NotW had transgressed, then the newspaper would still be a cash cow for Murdoch. Instead, the closing of the NotW, plus the inevitable launch of the Sun on Sunday, is surely going to cost him a significant nine-figure sum.

As for the idea that the Sun on Sunday is just going to be the News of the World under a different name, I’m not sure I buy it. The name of a newspaper is the single most important part of its identity: it can’t simply be changed at will while maintaining its identity, in the way that Rebekah Brooks used to be Rebekah Wade. The Sun on Sunday will perforce be a very different beast from the News of the World, and the staffing will look very different too.

What’s more, insofar as the Sun on Sunday is similar to the News of the World circa 2011, remember that the NotW‘s current staff are the innocent victims in this story. If many of them can get their jobs back, that’s a good thing, not a bad thing. Is the NotW in its current incarnation purer than the driven snow? Of course not – and neither are most of the other newspapers in the UK. The NotW was not the only newspaper to hack into telephones. Unless you want to see pretty much every UK tabloid shuttered, the Sun on Sunday rising like a Phoenix is something all newspaper lovers should welcome. Even if they shudder to think that Rebekah Brooks could yet keep her job and be the person in charge of launching it.

Felix Salmon is a *Reuters* blogger. This post appears on his Reuters blog and is published here with his permission.

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This article originally appeared in Reuters.

  1. Jill Kennedy Friday, July 8, 2011

    Deep down Rupert knows he will survive this scandal.  Many others won’t.  Lives will be ruined.  But Rupert is like a mob boss – he’ll always have journalists “in his pocket” writing good stuff about him to off-set the bad.  Look, he even participated in the “Mogulympics” competition at Herb Allen’s Sun Valley Conference yesterday – he’ll be fine.

    http://mankabros.com/blogs/chairman/2011/07/06/mogulympics-herb-allens-sun-valley-conference-day-2/

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