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‘Transfixing’ Testimony Puts Spotlight on Future of Murdoch’s Media Empire

July 19, 2011 at 12:00 AM EDT
There was plenty of drama in London Tuesday when Rupert Murdoch, James Murdoch and Rebekah Brooks testified before a committee of Parliament about the phone-hacking and alleged police-bribing scandal rocking Britain. Jeffrey Brown discusses the proceedings with The New York Times' John Burns and NPR's David Folkenflik.
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JEFFREY BROWN: And more now on today’s hearings and the Murdoch media empire. We’re joined from London by John Burns of The New York Times, and from New York by David Folkenflik, who covers the media for NPR.

So, John Burns, what struck you most about the Murdochs’ message today?

JOHN BURNS, The New York Times: Well, it was a heavily lawyered performance, but, for all that, I thought it was pretty skilled.

The lawmakers, who were a lot more briefed, and better briefed themselves than the parliamentary committees in London and Britain usually are — they are not — they are a shadow of their counterparts on Capitol Hill. But, today, I thought that the lawmakers did pretty well.

But they didn’t lay too many gloves on the Murdochs. I think that it was greatly to their advantage, in a paradoxical way, that Mr. Marbles, I think his name is, entered from stage right with his custard pie or his shaving foam pie, whatever it was, because it presented Rupert Murdoch, who is not altogether the easiest man in the world to like, in a rather vulnerable light.

Here’s an 80-year-old man who had spent much of the afternoon apologizing, being attacked by a much younger man in a public place. And I think, if the public relations people for the Murdochs had wanted to fashion an incident which would have somewhat softened Mr. Murdoch’s image, all the more for the fact, not shown in the clip that you have just shown, or at least not shown quite as clear as it was live, Wendi Deng, Mr. Murdoch’s much younger wife, leaping like a basketball player to her left at an angle of about 45 degrees to the horizontal to apparently impede, maybe strike back at Mr. Marbles.

It made for quite spectacular theater, all the better for the fact that Mr. Murdoch appeared not to be injured.

JEFFREY BROWN: I saw that. She — it looked like she almost decked him.

(LAUGHTER)

JEFFREY BROWN: Now, David Folkenflik, let me bring you in here.

The Murdochs seem to be walking a line here today. They’re saying they’re hands-on executives who run a huge business, but they don’t know everything that is going on. They didn’t know a lot of particulars here.

How does that jibe with what’s known about the way they formed and run their business?

DAVID FOLKENFLIK, NPR: Well, I think what they were doing was portraying themselves as capable executives and capable managers, who nonetheless didn’t know some of the operational details that have gotten their British newspaper division in a world of hurt.

I think it doesn’t quite jibe with what we know about particularly Rupert Murdoch, his love of newspapers, although the company’s future is really in media, in entertainment, in television. You know, he came up through newspapers. It’s said ink runs in his veins. And he’s known for calling up editors and suggesting new tips or even a change in headlines.

When he first acquired The Wall Street Journal, he is said to really enjoy prowling the newsroom at first and making suggestions and really being invigorated by it. The idea he had no idea, it is possible. It is, as he said, you know, the News of the World less than one percent of his media empire at News Corp.

And yet, at the same time, that tabloid was his entree into London newspapering, and along with the tabloid The Sun served as the launchpad for his empire in the U.K. and then subsequently the U.S. So it doesn’t — it disconnects from what people hear about Mr. Murdoch’s operation. He’s a guy that is fairly direct. He enjoys having control of some of his objects. They’re — it’s fun for him.

JEFFREY BROWN: And, John Burns, tell us a little bit more about his — Murdoch’s personality and history as a media mogul. He’s had to fight, survive troubles in the past here. What — what — tell us what you can about him.

JOHN BURNS: Oh, he’s — he’s a tough guy.

He’s been known in Britain for about 40 years as the “Dirty Digger.” I need to explain that digger is a common slang for Australian, dirty referring to the roughhouse tactics that he’s been prepared to use, most notably, famously, against the print unions, who wanted to hang on to the old days of hot type in newspapering.

And the revolution that swept over newspapers here in the U.K. and, I dare say, to some considerable extent also in the United States, in the 1980s owes much to Rupert Murdoch having bulled his way through that. He has also been, notwithstanding his profession today to be absolutely a hands-off guy, he’s also been very much a hands-on guy with those newspapers.

He’s picked his friends and his enemies. And he has certainly pursued his enemies with some vigor. Now, what we saw today was a different Rupert Murdoch. At the beginning, he seemed inhibited. But as the time went on, he said very little. Most of what he said in the first half-an-hour or 45 minutes could be summed up in the one sentence that he said, which was, “Today is the humblest day of my life.”

He repeated that later on. It was in a statement which he wasn’t allowed to read until the end. But as the day wore on — and there was about three hours of questioning, one side and another of the custard pie incident, if I can call it that — you began to see a strategy.

And the strategy appeared to me to be this. And they followed it religiously. James Murdoch, as the executive clearly in charge of overseas operations, including the British newspapers, could not deny absolutely the forensic questions. He had to engage with them.

Rupert Murdoch could take the high road, as he did, and stay silent for much of the time, only occasionally stepping in when he felt that James Murdoch needed some help.

After the pie incident, we saw a different Murdoch, a much more assertive one, where he said — and at this point, he appeared to be talking, I thought, to the investors on the other side of the Atlantic Ocean, principally, and to his own board at News Corporation, where he said very clearly: I’m in charge. I am the founder of this corporation. I have been at this for over 50 years, and I am going to lead this corporation out of this mess.

JEFFREY BROWN: Well, let me ask…

JOHN BURNS: That seemed to me the clearest signal that he’s going to hang on.

JEFFREY BROWN: Well, let me ask David about those investors, about the board here. Is there a real question about Murdoch’s ability to hold on to his empire at this point? And is it up to him? How much power do investors and does the board have?

DAVID FOLKENFLIK: Well, almost singularly in the media world, you have a publicly traded company based here in New York with a global reach which is really driven by the vision and the ambition of one family and, in effect, one man K. Rupert Murdoch himself.

And it’s been — he’s been able to run this corporation as though it’s a family concern. You have seen a board which has been viewed by outsiders anyway as being largely quiescent, allowing him to pursue to a great degree the vision that he wanted, assenting to the major — what was attempted, the $12 billion takeover of BSkyB that was doomed by this scandal in the last couple of weeks.

That said, you’re seeing some other signs. There was a dissident shareholder lawsuit in the last 10 days questioning his leadership in the wake of this scandal. You have seen the independent board members acknowledge late this afternoon that they have hired lawyers, former U.S. Attorney General Michael Mukasey, former U.S. Attorney Mary Jo White, as lawyers to advise senior News Corp. legal executives about their management and their inquiry into what went wrong, in the interest of the independent directors, that is, the non-family members, the non-major shareholders who sit on the board.

And I think that is a subtle indication that they may acknowledge that their interests are distinct.

JEFFREY BROWN: And, David, brief — very briefly, are there implications, therefore, for the U.S. side of the business?

DAVID FOLKENFLIK: There’s implications for the whole side of the business.

I mean, fundamentally, you get down to the question of what particularly James Murdoch, who had been seen as the heir apparent, but also Rupert Murdoch, what did they know? When did they know it? How did they respond?

And if there was an ignorance, as was professed, of the tactics used, of the laws that were broken, of the efforts to cover that up, the question reasonably could be, given — even if all that is true, why should we entrust you with the leadership of this company, if you’re not in control of something that could so — be so damaging for our company’s financial future?

JEFFREY BROWN: And, John, just in a word here, just to sum up, how unusual a day was this to watch what you watched today?

JOHN BURNS: Nothing — nothing like it in my lifetime, certainly nothing like it in my experience of British public life. Quite extraordinary. The whole country, and I dare say a good deal of America, too, was transfixed by what in the one hand is an absolutely compelling political story, but which is also, of course, an irresistible soap opera.

JEFFREY BROWN: All right. Thank you for that.

John Burns and David Folkenflik, thanks a lot.