Cracks in News Corp's show of unity
Tensions simmer as 'frustrated' Murdoch flies in to face phone-hacking affair, Andy Gray row and troubled Sky bid
153 comments - PM's dinner with News International
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Phone hacking: show of unity can't hide cracks in News Corp
Tensions simmer as 'frustrated' Rupert Murdoch flies in to face phone-hacking affair, Andy Gray row and troubled Sky bid
With his British media empire embroiled in three separate crises at once – its biggest challenge since he moved the company to Wapping 25 years ago this week – the News Corporation chief turned up for lunch in the staff canteen with his key executives by his side.
Around the table sat his son James– the head of News Corp's European and Asian operations – Rebekah Brooks, the chief executive of its British newspaper division News International, plus the editors of the Sun and the Times, Dominic Mohan and James Harding respectively. Meatballs were on the menu, although staff preferred not to get too close to see what the boss actually ate.
In the words of one friend, Murdoch was "frustrated, but ready to be decisive" by the failure to resolve the News of the World phone-hacking crisis, which had claimed the scalp of his former editor and No 10 spin doctor Andy Coulson. The plan had been to travel to Davos in midweek for the World Economic Forum, but Murdoch wanted to deal with both the hacking and the status of his £8bn bid for the 61% of BSkyB that News Corp does not own.
While senior executives and editors are rarely seen in the canteen otherwise, Murdoch himself is a regular – lunching with various members of his management in sight of journalists at least once whenever he is London, which is usually about six times a year. The meeting was quickly interpreted as a show of support at a time when there are cracks at Wapping over how to handle the hacking saga.
Insiders say the pressure has opened up faultlines within his business.
Divisions are said to have opened up between James Murdoch, whose background running Sky makes him the lead executive when it comes to seeing the £8bn bid past politicians and regulators, and Brooks and her ally, former Daily Telegraph editor Will Lewis, who is now group general manager at News International, co-ordinating the papers' spending.
Complicating the picture further is the presence of Elisabeth Murdoch and her husband, PR man Matthew Freud. Elisabeth has not worked for News Corp or Sky for 10 years, leaving to form her own independent television production business, Shine. But Shine is now likely to be bought or partly bought by News Corp, bringing her closer into the family fold.
Although she remains close to James and has little interest in a bigger job at News Corp – wanting to enlarge Shine further – her management style is noticeably less combative than her brother's – a significant distinction at a time when News Corp is short of allies in the British media.
Internal critics, meanwhile, accuse James Murdoch of being slow to engage with the hacking saga – leaving the company trapped in a policy of outright denial because he was so focused on the bid for Sky – while Brooks wants to be seen to be getting on top of it by demonstrating willingness to investigate new evidence that emerges from cases against the News of the World (NoW).
The efforts of Brooks and Lewis have – so far – largely consisted of investigating and suspending Ian Edmondson, the NoW assistant editor (news), whose name cropped up in notebooks belonging to Glenn Mulcaire, the private investigator jailed for hacking into phones of royal aides in 2007.
Once he arrived, one of Rupert Murdoch's early tasks was to review the evidence against Edmondson, and decide what to do next.
But on his first morning in the Wapping office, unexpected news was developing.
Andy Gray and Richard Keys, the stars of Sky Sports's football coverage, were recorded making sexist comments about assistant referee Sian Massey.
Gray and Keys were suspended by lunchtime, a decision which Jeremy Darroch, the chief executive of Sky, said he was involved with. Gray's position was all the more sensitive because he was also suing the NoW over alleged phone-hacking.
It is not clear if Murdoch was involved in the suspension – but he is likely to have been involved with Tuesday's splash story in the Sun, which made light of the row with a picture of Massey, 25, dancing at a party accompanied by the headline: "Get 'em Off: Sexist pundits axed from TV".
However, by the time the Sun front page had been drawn up there was a further development. News Corp already knew its bid for Sky was unlikely to get past the culture secretary, Jeremy Hunt, at the first time of asking, following private correspondence with Hunt's team the week before.
Murdoch's arrival, though, turned out to be handily timed, because on Monday afternoon he was informed that Hunt would make an announcement about the status of the bid the next morning shortly after 7am.
So as the Sun was picked up from doormats around the country on Tuesday, Hunt announced to the country that News Corp's bid for Sky "may operate against the public interest" because of its impact on media plurality.
However, in a surprise twist, before he referred the deal to the Competition Commission for further examination, Hunt said he would consider an offer of "undertakings" from News Corp – an offer to provide guarantees of the editorial independence of Sky News. It was a partial victory for Murdoch, a past master at negotiating with politicians and regulators. He had just avoided a six-month-long referral, at least while a modest concession was considered by Hunt.
Any respite gained from that, though, was limited. By Tuesday, a review of Edmondson's case file and emails had concluded and – in a decision almost certainly overseen by Murdoch – it was decided that day to fire him. To add to the excitement, Gray had also been sacked by Sky, after footage emerged on the internet of him asking co-presenter Charlotte Jackson to tuck a microphone down his trousers.
Wednesday's Sun was much harsher on Gray, describing a "toe-curling sexist suggestion" to Jackson. Meanwhile, the information obtained from Edmondson's emails was passed to the Metropolitan police. On Wednesday afternoon the Met said it had received "significant new information" that meant that it had to reopen its hacking investigation.
Yet, if Murdoch was quietly controlling the agenda, he still chose to abandon the Davos trip.
Going would have been a clear signal that it was business as usual despite the phone-hacking row, but with allies saying he is "mid-process" – as in part of the way towards resolving the issue – he deferred leaving until this weekend.
At the same time, although Murdoch is highly respected as the News Corp chief executive, his sustained presence is rarely welcomed because he is so keen to involve himself in all sorts of detail.
There was a clear example of that on Wednesday when Murdoch, with Brooks, went to the Times's morning editorial conference.
While his presence at the Sun is regular and frequent when he is in Wapping, he rarely visits the Times in person. However, a recent move means the Times is no longer across the road from his office, but just a few floors down in the lift.
True to his newspaper roots, Murdoch offered opinions on various news items. But it was when he referred to the Andy Gray story that eyebrows were raised. First he said "this country has lost its sense of humour" and anything Gray said was "not worse that what women say about other women".
When reminded that Gray had been sacked, Murdoch silenced the meeting, saying: "There are other reasons for sacking Andy Gray." Later that day, News Corp confirmed the other reasons referred to Gray's remarks to Charlotte Jackson.
When Murdoch bought the Times and Sunday Times in 1981, he agreed, as a condition of the takeover, to be bound by a group of editorial undertakings in which he committed to "in all respects to maintain the titles as editorially independent newspapers of high quality" in which "editors will not be subject to instruction from either the proprietor or the management on the selection and balance of news and opinion". Murdoch wants to attach similar undertakings to Sky News, but his presence at the Times show that whatever conditions are in place he is still prepared offer firm opinions.
Efforts were made to tighten up external communications, and for the first time all week, Murdoch lost control of the agenda.
Thursday saw the NoW battered by more hacking revelations, first by the announcement of the Kelly Hoppen privacy lawsuit by the BBC and the Guardian, then by new allegations about Glenn Mulcaire from Leslie Ash and Lee Chapman.
Yet even though Murdoch may have been surprised by the revelations, he is a veteran of many long takeover battles – from the year-long struggle to beat Robert Maxwell to the NoW in 1969, through to the dogged, successful pursuit of the Wall Street Journal in 2007.
He remained calm, but ready to move: "He knows the chips are down; he knows he has to act – but he'll do what he thinks is right, not be bothered by what the Guardian or the Independent write," said one source.
Significantly, it was on Thursday that he chose to lunch in the canteen with Colin Myler, the NoW editor, and a handful of senior staff.
Back in 1987, after a year of riots and intense criticism, it was Murdoch who prevailed in the original Wapping industrial dispute. By comparison, this week's events seemed less dramatic – but Murdoch also knows there is a long way to go before all the evidence about phone hacking is made public and the whole affair is laid to rest.
Murdoch's inner circle
Elisabeth Murdoch, chief executive officer of ShineRupert Murdoch's eldest child by his second marriage wants the backing of her father to help enlarge her television production company. That will bring her closer to the fold, but she doesn't want a greater role at News Corp, at least yet.
Matthew Freud, chairman of Freud Communications
The husband of Elisabeth and an independently wealthy, connected public relations man. He has the role of family disturber-in-chief, advancing his own views fearlessly when he chooses to and sometimes promoting the cause of his wife.
James Murdoch, chief executive, News Corp, Europe and Asia
The London-based heir presumptive to Rupert. He remained loyal to the family business, but was criticised for failing to defuse the phone-hacking crisis because of a combative personal style and lack of fingertip feel for the newspaper business.
Rebekah Brooks, chief executive, News International
The former Sun and News of the World editor who has been leading the company effort to resolve phone-hacking cases. Closely identified with her tabloid past and socially connected to David Cameron via the Oxfordshire set.
William Lewis, group general manager, News International
The energetic former Daily Telegraph editor, brought in by Brooks to act as a counterweight to the powerful editors at News International's titles. Allied to Brooks in efforts to make some hacking-related disclosures.
