The Restoration of the House of Murdoch

By Media Reform Coalition / Sunday January 31, 2016 Read More
by Des Freedman James Murdoch, younger son of billionaire media mogul and keen tweeter Rupert Murdoch, has been appointed as chairman of the UK’s biggest broadcaster, BSkyB. Normally, top boardroom appointments would merit perhaps a mention in business blogs and the City pages of the press but this is more significant for what it tell us about corporate power and governance in the UK today. Firstly, it signals Murdoch senior’s determination to sort out the thorny question of who controls Sky. Murdoch’s 21st Century Fox has a 39% share in the company and famously tried to take full control back in 2011. The bid was cleared by European Union competition regulators and was eventually scuppered only by the phone hacking crisis. The threat of a takeover, however, has never really disappeared and indeed James Murdoch himself made it clear last autumn that not having full control of Sky was ‘not an end state that is natural for us’. According to industry experts, a bid for Sky is imminent – ‘when not if’ – which would create a company with an even more dominant position in the British media than it currently has. Second, it tells us a lot about corporate ethics in the biggest boardrooms in this country. Remember that, following his involvement in the phone hacking crisis, James Murdoch resigned from his position both as chair of News Corp’s UK newspaper division and Sky. Ofcom, the UK’s media regulator, condemned Murdoch at the time for his ‘lack of action’ over phone hacking and concluded that his behaviour ‘repeatedly fell short of the conduct to be expected of as a chief executive and chairman. The punishment for this incompetence? His Dad banished him to New York to look after his US TV interests before eventually taking charge of 21st Century Fox last year. Now he is back even though some Sky shareholders are questioning the legitimacy of his appointment. How can it be right, they argue, that you can put the chief executive of a company that wants to control Sky in charge of Sky itself? Which way do you think James Murdoch would vote if the Sky board was divided on the question of whether to accept a bid from his dad’s company? It really is like asking a fox to babysit your chickens. Third – and most significantly – it’s very revealing about class power and loyalty. Rupert Murdoch’s position as chief ideologue of Thatcherism and neoliberalism was shaken by the phone hacking crisis. His favourite editor, Rebekah Brooks, was forced to take gardening leave and his son had to retreat across the Atlantic. For a while, he retreated from frontline politics but now he is firmly back. In between his engagement to Jerry Hall, he found time to meet with government advisers at least eight times in the year leading up to the 2015 general election and with George Osborne twice just ahead of the government’s decision to inflict substantial cuts on Murdoch’s great institutional rival, the BBC. Buoyed by the election of a Tory government, Murdoch felt confident enough to restore Rebekah Brooks back to her rightful position as boss of News UK last September and organised a high-profile Christmas party attended by the ‘great and the good’ of the British establishment including David Cameron and George Osborne. And now he has his son back at the top of the company that, only a few years back, he was deemed to be unsuitable to run. Last week, in a tweet that shows not only his confidence but also a keen sense of irony, Murdoch senior attacked Google – one of his other great rivals – for its successful lobbying effort in reaching a shady tax deal with the UK government despite Murdoch’s own long history of allegations concerning tax avoidance, let alone his ideological commitment to low tax economies. The restoration of the Murdoch dynasty to the heights of British politics will now shape public debate about key political issues including the forthcoming local and national elections as well as the referendum on EU membership. This presents Labour, and Jeremy Corbyn in particular, with a problem and an opportunity: a problem because a focussed Murdoch will encourage yet more attacks on the Labour leader; an opportunity because millions of people will want to support a challenge to one of the most vociferous supporters of austerity, war and neoliberalism.