LONDON — It seemed inexplicable. Why would Rupert Murdoch sabotage his own bid to gain control of Sky, the European TV group?
For months, Murdoch’s $14.9 billion offer for the 61 percent of Sky he does not already own has been under scrutiny by U.K. regulators. Approval rested on the fact that part of the Sky deal is its journalistic arm, Sky News, and specifically whether giving control of Sky to Murdoch would give him too much influence over news content in the U.K.
Then, on October 25, came a move that appeared to put the whole deal in jeopardy.
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The Wall Street Journal published an editorial urging Robert Mueller to resign as special counsel investigating Russian involvement in the 2016 presidential campaign because he “lacks the critical distance to conduct a credible probe.”
If anybody needed proof that Murdoch used his news outlets to promote his political interests this was it – part of an orchestrated campaign also including Fox News and the New York Post to shut down Mueller on behalf of Murdoch’s best buddy in the White House, Donald Trump.
The Journal editorial appeared just as the British regulator in the Sky case, the Competition and Markets Authority, CMA, was hearing evidence from a succession of leading political and media industry figures who oppose the Murdoch bid. It was seen as a gift to them - an astonishing proof of their arguments because of the blatant way it undercut Murdoch’s assertion to the regulator that he would not use Sky News to further his own agendas.
But this week Murdoch’s real strategy finally broke into the open: if the independence and integrity of Sky News is the impediment standing in the way of gaining control of Sky, he is ready to dump Sky News.
The CMA released an anonymous five-page submission made to them by Sky in October that included a succinct section ominously headed: “The Continued Provision of Sky News should not be simply assumed.” in which they warned – supposedly on behalf of shareholders – that if sustaining the loss-making Sky News “unduly impeded and/or other corporate opportunities,” it would likely either be shut down or sold.
This explains the timing of the Journal editorial. By the time it appeared Murdoch had decided that he need not any longer be constrained by the politics of the Sky deal in Britain. If Sky News was removed as the problem there were no other grounds for the bid to be blocked by the regulator – and he was free to use the Journal’s editorial page as a surrogate for Trump’s campaign against Mueller—or anybody else deemed a threat to Trump. It was a fiendishly clever gambit and typical of the man.
When the bid was launched it was widely expected that it would be approved by the official media watchdog, Ofcom. But then the sexual scandal at Fox News broke and rapidly escalated.
One of the criteria Ofcom applied in screening the deal was whether the Murdochs – Rupert and his two sons, James and Lachlan – were “fit and proper” people to run a media company. To the astonishment of many, despite the extent of the Fox scandal, Ofcom cleared the Murdochs on those grounds but said it was concerned, instead, that when Sky News was added to the existing Murdoch-controlled British news outlets Murdoch’s potential influence would be too great.
For that reason, the government’s culture secretary referred the bid to the CMA, giving them 24 weeks to take new evidence and decide.
Since then there has been a stream of submissions to the CMA opposing the bid, including several from lawyers involved in handling the scandal at Fox News. They were angered by Ofcom’s failure to recognize Rupert Murdoch’s history of personal complicity in a culture that allowed free reign to sexual predators from Roger Ailes down – and consented to the massive payoffs made to victims, including a $32 million settlement in one harassment case involving Bill O’Reilly.
As dangerous as the Fox News scandal seemed to be to Murdoch’s chances of gaining control of Sky, these cases fall outside the CMA’s normal remit, which is to consider the public interest impact of mergers and changes in the control of companies. Consequently their main focus has been on Murdoch’s history as a puppeteer of prime ministers and an overmighty influence on their policies.
And, indeed, The Daily Beast has reviewed a flood of extraordinarily detailed accounts that have been given to the regulators about how, over the course of decades and in three countries, Britain, America and Australia, Murdoch has followed a pattern of acquiring influence and power through the unscrupulous and coercive use of his news organizations.
The exercise of that power is often more important than profits. The CMA has been told how the value of a newspaper to Murdoch as a political influence sometimes overrides its value to him as a business.
In Australia he owns the only national newspaper, The Australian, which has rarely made a profit but wields political clout; in Britain he owns The Times, still regarded as the paper of record for the political establishment, even though it, too, has consistently lost money; in New York he has owned the New York Post since 1976 and, again, run it at a loss because he was able so successfully to use it to ingratiate his way into the Republican power network, both in New York and in Washington.
Moreover, before getting control of a news organization Murdoch has frequently given an undertaking that he would not personally intrude in its handling of news and, just as frequently, reneged on those undertakings.
Murdoch doesn’t centralize editorial control because he doesn’t need to. Every newsroom on every continent knows his biases and most of them intuitively incorporate them in their coverage without needing to receive orders or consult. If they don’t they soon get corrected.
In the case of the Wall Street Journal it might, however, be less clear. The editorial page attacks on Mueller contrast with what appears still to be unfettered and aggressive reporting in the newsroom on the course of Mueller’s investigation. The problem is that, in that dichotomy, a reporter can feel like a eunuch if his story is countered and undermined by editorial opinions that are more likely to reflect a reader’s prejudices. That doesn’t happen at the New York Times or Washington Post.
Meanwhile in London it has to be said that some of the people now so agitated about the prospect of Murdoch gaining more influence in Britain seem to be late stage apostates. These are people who served as cabinet ministers in governments, both Tory and Labour, that over the years shamelessly pandered to Murdoch.
Their hypocrisy was put into words by David Cameron, the former Tory prime minister, who said “never again should we let a media group get too powerful…we all did too much cosying up to Rupert Murdoch.” In fact, Cameron and his ministers frequently enjoyed the largesse of Murdoch-hosted parties and drank his champagne without showing any signs of guilt dyspepsia.
Murdoch’s motives are not always as clear as people suppose. For example, submissions made to the regulator argue that Murdoch’s purpose in acquiring political clout is always to advance his commercial interests. That is surely true in the U.S. but in Britain Murdoch’s two most consequential political campaigns were disasters for the country and had no perceptible commercial benefits for him.
The first was British involvement in the Iraq war. In 2012 it was revealed that in 2003, a week before the British parliament voted to commit troops to the war, Murdoch called Prime Minister Tony Blair insisting that there should be no British hesitation in backing president George W. Bush, implying that if there was Blair would lose the backing of the Murdoch papers. Alastair Campbell, the Blair aide who disclosed the call, saw it as a crude move made by Murdoch on behalf of his neo-con pals in Washington. Blair’s reputation has never recovered from his playing lapdog to Bush.
The second Murdoch-supported fiasco was the 2016 referendum that led to Brexit. Murdoch’s principal mouthpiece, the tabloid Sun, played on a blend of anti-immigrant sentiment and jingoism to urge exit from the European Union with headlines like “BeLEAVE in Britain!” The Sun crowed about its role in the result but now, with Brexit becoming an economic calamity, there is widespread buyers’ remorse and no obvious profit for Murdoch.
Astonishingly, within a year of that result and with his bid for Sky becoming of paramount importance to him, Murdoch was suddenly claiming that his newspapers’ political clout had been permanently diminished by more and more people getting news via social media. As proof, he cited Prime Minister Theresa May’s failure to win a predicted landslide victory in this summer’s election even though Murdoch’s papers had backed her.
In presenting his case to Ofcom, Murdoch said, “despite exerting all the influence they had, newspaper titles, including The Sun, were unable to sway the outcome.”
Always beware Murdoch pleading impotence. This was nakedly disingenuous. According to a poll by YouGov, 59 percent of Sun readers voted Tory in 2017 compared to 47 percent in the 2015 general election. In other words, without Murdoch’s support May might well have lost the election.
Sky News has never been part of Murdoch’s political leverage in Britain. Even though he is a major shareholder in Sky, the Sky News newsroom operates with clear independence of any Murdoch interests or doctrines and, even as it runs up losses it has become the fourth most viewed source of television news in Britain and is a nimble-footed competitor to the BBC. For Murdoch, though, this has long been a problem.
In a statement that has come back to haunt him, Murdoch told a British parliamentary committee in 2006 that Sky News would be more popular if it were more like Fox News. That would, he said, require a change in Britain’s rules about impartiality in news coverage on television. Sky, he said, had not made the “presentational progress” that Fox News had. The only reason that Sky News was not more like Fox News was that “nobody at Sky listens to me.”
All of this leads to one question: What does Rupert Murdoch really want in his twilight years? His daily drug of choice is omnipotence. America has always been Murdoch’s biggest game. And now he has the first president who will, apparently, actually listen to him, often on an almost daily basis.
Under normal circumstances a White House would make sure that no media mogul had that kind of access. For one thing there is the question of broadcasting standards and federal oversight of them. But the U.S has never attempted to deliberately legislate the plurality of media ownership as a matter of public policy in the way that the British do. It’s usually been left to market forces.
In Britain operating something like Fox News would have been impossible. (James Murdoch has described the British system as “an impingement on freedom of speech and on the right of people to choose what kind of news to watch.”) Now Fox News is Trump’s most reliable bulwark and Murdoch’s business practices and principles are as free to flourish in America as Trump’s. In this picture, giving up Sky News is a small loss in a small country far, far away.
