Last roll of the dice

Rupert Murdoch has faced the worst twelve months of an astonishing career. So how will the 81-year-old media magnate respond?
Rupert Murdoch
By Ed Attwood
Sun 15 Apr 2012 08:27 AM

"It was the humblest day of my life.” With these words to a British parliamentary select committee in 2011, Rupert Murdoch summed up just how far his star had fallen. Until last year, the News Corporation (NewsCorp) chief executive was seen as untouchable; friend of presidents and prime ministers, the eminence grise behind some of the planet’s top news organisations and one of the world’s richest men.

Murdoch’s words of humility – in reference to a personal apology he had made to the parents of a murdered child whose phone had been hacked by his journalists – were intended to draw a line under a storm of criticism that has refused to go away.

In just the latest of a string of scandals to hit Murdoch’s UK-based media empire, a British blog posted the names of 300 News International journalists who have been accused of requesting personal information on celebrities, politicians and victims of crime. The scandal, which has been running since the beginning of last year, has resulted in the closure of the 178-year-old News of the World. According to company accounts released last week, the inquiry into the News International activities – Operation Motorman – has cost Murdoch more than $125m.

But the cash loss will not concern Murdoch as much as the damage to his reputation. Earlier this month, Murdoch’s son, James, quit as chairman of BSkyB – the most powerful satellite broadcaster in the UK. The departure of James Murdoch, who has taken most of the heat over the phone-tapping scandal, will ensure that his father is put back in the firing line as the inquiry draws to a conclusion.

The biggest task for the billionaire media baron is to decide where to take his empire next. Part of the strategy will come to fruition next month, when Sky News Arabia launches on 6 May.

Murdoch’s direct link to Sky News Arabia comes through NewsCorp’s controlling stake in BSkyB – one half of the channel’s 50:50 joint backers. Although Sky News Arabia has been at pains to distance itself from NewsCorp – as our interview with channel chief Nart Bouran overleaf shows – it remains to be seen whether its close connections, real or perceived, with Murdoch will hinder the brand.

But Sky News Arabia is by no means Murdoch’s first foray into the Arab world. His long relationship with Saudi Arabia’s Prince Alwaleed bin Talal, the chairman of Kingdom Holding is bound to stand him in good stead.

But Prince Alwaleed will also be posing hefty competition to Sky News Arabia in the form of his own channel, Al Arab. There is some irony in the fact that Murdoch – ever the canny operator – has interests in both camps. NewsCorp recently upped its stake in the Rotana Group, one of Al Arab’s backers, to just under fifteen percent.

In recent years, deals signed between NewsCorp subsidiary Fox International Channels (FIC) and Rotana have allowed for content from the likes of the Walt Disney Company to be beamed across the region.

Likewise, Prince Alwaleed is himself a significant shareholder in NewsCorp. He owns seven percent of Class B voting shares in the media giant, making him the second largest individual shareholder behind the Murdoch family itself.

But what are Murdoch’s other options? If recent reports are to be believed, the octogenarian has no plans to throw in the towel just yet. Aside from his moves into the Arab world, it looks like NewsCorp will also manage to secure its grip in Australia, Murdoch’s home country. Foxtel, 25 percent owned by NewsCorp, looks set to have its $2bn takeover of pay-TV rival Austar.

And Murdoch clearly has no intention of taking criticism lying down from those he feels has jumped on the anti-NewsCorp bandwagon.

“Seems every competitor and enemy piling on with lies and libels. So bad, so easy to hit back hard, which preparing,” Murdoch tweeted at the end of March.

“Enemies many different agendas, but worst old toffs and right wingers who still want last century’s status quo with their monopolies,” he added.

The backlash, it appears, is about to begin.

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