Sunday, July 17, 2011

Some thoughts on the whole Murdoch/Hackergate thing

Here are some random thoughts in no particular order. They're generally based upon things I read and wanted to clarify.

  1. It doesn't appear that there's hard evidence in the "NotW bugged 9/11 victims" scandal. That is to say, one newspaper, the Daily Mirror, apparently is the source for the allegations, but other newspapers haven't dug up anything to corroborate the allegation.
  2. Even if she's entirely innocent, legally, I don't see how the person who was editor during the start of the NotW hacking campaign, and who headed the UK newspaper division of Murdoch's empire, could possibly have seen it as reasonable to not quit for as long as she did. Most executives would, at the very least, accept they had responsibility for the atmosphere that caused such acts to be committed, even if they, themselves, didn't know the specifics.
  3. Despite claims to the contrary, there is no threat to Fox News from this scandal. The FCC might require that the Murdoch Empire divest itself of its broadcast stations and, possibly, its broadcast network, but the FCC doesn't really have the same kind of jurisdiction on cable channels, movie studios, newspapers, or any other aspect of Murdoch's corporation. Moreover, the Fox Network is essentially apolitical, it carries very little centralized Murdochian news or comment, with the exception of Fox News Sunday.
  4. Despite the regulatory differences between the UK and US, and "something must be done" atmosphere in parliament, it's not entirely clear anyone in power can actually force a Murdoch exit from the UK media, with the exception of BSkyB, which has a similar legal status to Fox Network in the US.
  5. BSkyB is a satellite network that includes a variety of different channels. Regulatory differences between the UK and US, and the lesser influence of Murdoch within the organization, means that those channels contain very little political commentary, and are largely entertainment oriented. 
  6. The rumors are focusing on Murdoch exiting the UK newspaper market.
  7. It is unclear to be how Murdoch would benefit by divesting himself of his UK newspapers.
  8. Murdoch uses his UK newspapers the same way as he uses Fox News in the US, propagating a kind of right wing populist rhetoric to make money and buy influence.
  9. Murdoch controls over 40% of the voting shares in News Corporation, despite only owning a much smaller fraction of the company itself. It is very, very, unlikely he'll be pushed out by investors. They'd have to be pretty much unanimous that he has to go. 
  10. One of the two major parties in the US benefits immensely from Rupert Murdoch.
Conclusions? I'm not sure there are any yet. Murdoch's been dealt a bloody nose in the UK, and it's possible that regulators there will severely cripple his influence in that country if given the power to do so. But...
  • I don't think Murdoch is going close/get rid of Fox News or The Sun
  • I think there's sufficient plausible deniability for Murdoch to be able to shift the perceived blame on his subordinates, particularly Brookes.
  • I think Murdoch may be forced out of BSkyB.
  • If any effort is made to push Murdoch out of his UK newspaper holdings, I think the UK press will be concerned because of the precedent this sets, and as such I think such a move wouldn't go anywhere.
  • I don't think any serious effort will be made to counter Murdoch's influence in the US.
That said, I wouldn't put money on any outcome right now.

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