Before I write on the British phone-hacking case convulsing Rupert Murdoch's News Corp., a bit of disclosure is in order. I work for TIME magazine, which is owned by Time Warner, whose cable channels, including HBO and CNN, compete with News Corp.'s, including FX and Fox News; whose 50%-owned broadcast network, the CW, competes with News Corp.'s Fox; whose film and TV studios (congrats, Harry Potter, on some record-breaking box office!) compete with News Corp.'s 20th Century Fox; and whose print outlets like this one compete for scoops and influence with News Corp.'s, like the Wall Street Journal.
In other words, I am writing for a great big corporation about a competing great big corporation, which got into great big trouble just as it was trying to get even great-bigger. Infer from that what you will. My employer is not perfect. But it is not presently accused of violating multiple laws or infuriating a nation to the point of possibly toppling its government. So I'm not going to dwell here on the sins of Time Warner, Disney, Comcast, Viacom or any other media megalosaur other than News Corp.
Murdoch's empire has been shaken by the forces that built it: tabloid-style gossip, political influence and sharp-elbowed aggression. Murdoch created a culture in which winning was everything, and he drove his company like an assault vehicle. Then his paper News of the World overreached, hacking into telephones and swiping voice mails from celebrities and the families of crime and terrorism victims. The outrage compounded by the incestuous network of connections to the British government and police that the case exposed moved News Corp. to close the 168-year-old tabloid and prompted a rash of resignations and arrests. "This is the most humble day of my life," Murdoch, 80, said in a prepared statement as he and his son, deputy COO James Murdoch, 38, testified on July 19 at a parliamentary committee hearing.
The bizarre sight of a humbled Rupert Murdoch, the real possibility that News Corp. will have to give up its newspapers in Britain, the spectacle of Murdoch's wife Wendi Deng leaping up to plant a volleyballer's spike on an assailant attempting to hit Murdoch in the face with a shaving-cream pie this story is the stuff of a British tabloid hack's wildest dreams. But it is also an object lesson in what can happen when a media company gets huge enough to become a law or an outlaw unto itself.
It would be simplistic and wrong to say that the hacking scandal happened simply because News Corp. was big. The invasions were a specific, vile practice stemming from a specifically amoral corporate culture. But the company's bigness facilitated its actions and its access. News Corp. had four London newspapers and controlled a good chunk of Britain's satellite TV; it had alumni in Prime Minister David Cameron's office and at Scotland Yard. Murdoch's newspapers were negligible lines on News Corp.'s balance sheets the money is in TV, other electronic media, Hollywood but they were force multipliers. Their circulation made them politically influential, which made Murdoch fearsome to politicians, whom he relied on to abet the growth of his holdings, which made him more fearsome.
If you wanted to get to the British people, you went through Murdoch. This fact held great sway in the government and among the police who were supposed to be investigating News of the World, even as evidence of the hackings languished in trash bags in a Scotland Yard evidence room. Sir Paul Stephenson, who resigned as Metropolitan Police commissioner because of the scandal, told incredulous MPs at a hearing that 10 out of Scotland Yard's current team of 45 press officers previously worked for News International, the U.K. newspaper division of News Corp. A full 30% of Stephenson's contacts with media from 2005 to 2010 involved Murdoch properties: the News of the World and its surviving sister tabloid, the Sun, plus the higher-flown Times and Sunday Times. "If I'm going to talk to media and [News International has] 42% of readers in this country, who am I going to talk to?" said Stephenson.
The News of the World scandal left News Corp.'s far-flung properties in the position of covering and occasionally covering for the boss. Fox News' morning show Fox & Friends aired a ludicrous defense of News Corp., arguing that the hacking scandal was overblown compared with the hacking of companies like Citigroup overlooking the tiny fact that Citigroup was not the company doing the hacking. The Wall Street Journal, once renowned for its independence, also stuck to the party line, arguing in a fiery editorial that Murdoch was being scapegoated by rivals delighting in "schadenfreude."
The scandal, ironically, could be the thing that cuts News Corp. down to size. Labour Party leader Ed Miliband has called for its downsizing and also tougher restrictions on the percentage of a media market one company can control. Here in the U.S., government interest so far has been limited to preliminary investigations of whether News Corp.'s British snooping violated American law or targeted Americans.
In the U.S., some media watchdogs cite the scandal as a reason to toughen our own regulations. America is not the U.K.: it's a bigger country, with a different culture (and the First Amendment). But there are other reasons to maintain limits on media concentration: to avoid conflicts of interest, encourage market competition and ensure a multitude of voices and ideas. And there are very good reasons to be wary of government and media institutions' getting too cozy. The way to avoid abuses like News of the World's is not through government control of media. But if we can thank Rupert Murdoch for one thing, it's for reminding us that it's no better for the media to control the government.