Is this the beginning of the end of Rupert Murdoch's media empire?

Mayne: James Murdoch’s resignation means nothing
by Stephen Mayne
The text message arrived from ABC News 24 at 6.58am.

“Any chance you could come to the studio to do an interview on James Murdoch’s resignation?”

Cripes, what a bombshell. This was going to be a huge day, a bit like when Lachlan Murdoch walked with a $10 million payout in 2005.

Alas, what News Corp announced this morning was nothing more than confirming what was announced on March 30 last year.

James Murdoch is moving to New York to be News Corp’s global 3IC, sporting the title deputy chief operating officer.

He is formally severing responsibility for the British newspaper operation and it is important that today’s announcement confirmed that News International’s new CEO, former Paul Keating adviser Tom Mockridge, is reporting directly to Rupert’s deputy, Chase Carey.

But don’t for a moment believe that James Murdoch has been appropriately sanctioned or punished for his role in the huge cover-up operation deployed to deny massive phone hacking and illegal payments to public officials. He’s even staying on as chairman of BSkyB.

You’ve got to hand it to the Murdochs — their undying commitment to nepotism above and beyond any normal notion of accountability is something to behold.

While every other senior News Corp executive connected to UK newspaper illegality has been thrown overboard, the Murdochs refuse to take meaningful responsibility.

Given the scale of what is unfolding at the Leveson inquiry, I very much doubt this is a sustainable strategy and still believe James Murdoch faces the serious prospect of being charged in the UK. Charges in the US are also in prospect and the move to New York will make James a bigger target for US authorities.

Similarly, I’ll be very surprised if Rupert is still executive chairman at the time of this year’s AGM in October.

What the Murdochs are refusing to accept is that almost 80% of the independent votes at last year’s News Corp AGM went against James and Lachlan Murdoch.

Lachlan Murdoch came a cropper when he moved to New York, so today’s comments by Murdoch’s most insightful biographer Michael Wolff, are instructive:

“James Murdoch does not have a role at News Corp. He is the shadow man. Nobody talks to him — not even, at least not meaningfully, his father. (They once spoke two or three times a day, managing the affairs of their world.) His siblings shun or pity him. He has not existed as a force, and hardly as presence, since the meltdown of the News of the World last summer.

And, to say the least, there is no possibility that he will inherit the top job.

The reality is stark: everybody in the company blames James for the terrible things that have happened in London. They blame his father for falling under James’s sway — but blame James more for swaying him.

In a way, it’s even starker than that: since he left the top job at BSkyB at his father’s behest and took over News Corp’s operations in Europe and Asia, James has become the most disliked man in the company. This is partly because, for all the obvious reasons, Murdoch’s entitled children would breed a predictable resentment. But additionally, it is because James is an extraordinarily cold, abrasive know-it-all.”

That is pretty savage commentary and you need to know the history. Like most journalists, Wolff’s observations are skewed to promote the interests of his sources, several of whom are sacked News Corp executives.

One of the biggest mistakes Rupert Murdoch made was giving Wolff carte blanche to the family and various News Corp executives.

It was Gary Ginsberg who recommended this and after the strategy went pear-shaped, he was and should have been fired.

Peter Chernin was the biggest loss and this happened after the crazy $US5.6 billion purchase of Dow Jones in 2007, something which the whole board should have prevented.

Lead independent director Sir Rod Eddington once told me that Lon Jacobs used to be very aggressive in the way he dealt with Rupert.

That’s fine, but he also made some big blunders, most notably the News America Marketing stuff-ups that resulted in a $US500 million settlement last year.

The result of this is that Rupert and James have burnt through some of their best executives and very few people remain who can stand up to them. Tactically, the family has played the UK newspaper scandal appallingly, but for mine that is more to do with Rupert than James.

If the company had any moral compass or sense of decency, both would completely resign as executive directors. But for that you’d need some independent directors with spine, which is still sadly lacking at News Corp.

The happiest moment of my year is about three hours before the first race at Cheltenham on Tuesday; queuing behind Alan Brazil for my, but not his, first pint of Guinness of the meeting.

Me, I love it.

Pay TV piracy hits Murdoch
Exclusive: Neil Chenoweth of The Australian Financial Review
March 28, 2012 - 10:10AM


More headaches for Rupert Murdoch. Photo: AFP

A secret unit within Rupert Murdoch's News Corporation promoted a wave of high-tech piracy in Australia that damaged Austar, Optus and Foxtel at a time when News was moving to take control of the Australian pay TV industry, a four-year investigation by The Australian Financial Review has revealed.

The piracy cost the Australian pay TV companies up to $50 million a year and helped cripple the finances of Austar, which Foxtel is now in the process of acquiring.

The AFR investigation has revealed a global trail of corporate dirty tricks directed against competitors by a secretive group of former policemen and intelligence officers within News Corp, known as Operational Security.

Their actions devastated News's competitors, and the resulting waves of high-tech piracy assisted News to bid for pay TV businesses at reduced prices – including DirecTV in the US, Telepiu in Italy and Austar. These targets each had other commercial weaknesses quite apart from piracy, the AFR says.

The Australian Competition and Consumer Commission is still deliberating on final details before approving Foxtel's $1.9 billion takeover bid for Austar, which will cement Foxtel's position as the dominant pay TV provider in Australia.

News Corp has categorically denied any involvement in promoting piracy and points to a string of court actions by competitors making similar claims, from which it has emerged victorious. In the only case that went to court, in 2008, the plaintiff EchoStar was ordered to pay nearly $19 million in legal costs.

The issue is particularly sensitive because Operational Security, which is headed by Reuven Hasak, a former deputy director of the Israeli domestic secret service, Shin Bet, operates in an area which historically has had close supervision by the Office of the Chairman, Rupert Murdoch.

The security group was initially set up in a News Corp subsidiary, News Datacom Systems (later known as NDS), to battle internal fraud and to target piracy against its own pay TV companies. But documents uncovered by the AFR reveal that NDS encouraged and facilitated piracy by hackers not only of its competitors but also of companies, such as Foxtel, for whom NDS provided pay TV smart cards. The documents show NDS sabotaged business rivals, fabricated legal actions and obtained telephone records illegally.

The actions are documented in an archive of 14,400 emails held by former Metropolitan Police commander Ray Adams who was European chief for Operational Security between 1996 and 2002.

The AFR is publishing thousands of the emails on its website at www.afr.com.

News Corp firm 'hired TV hacker'
Karen Kissane
March 28, 2012/the AGE

RUPERT Murdoch's TV media empire is being accused of corporate espionage, computer hacking and piracy in a campaign that allegedly destroyed a rival of the lucrative British satellite broadcaster BSkyB.

News Corporation's then-software security arm, NDS, recruited a hacker to unlock its competitors' smartcards in 1996, the BBC's investigative program Panorama claims. ...<cont>

News piracy allegations should be investigated by police: Conroy
March 28, 2012 - 12:22PM

Media reports that Rupert Murdoch's News Corp promoted the pirating of its international pay-TV rivals were serious, and allegations of any criminality should be investigated by police, the Australian government said today.

"These are serious allegations and any allegations of criminal activity should be referred to the Australian Federal Police for investigation," a spokesperson for Senator Conroy said. ...<cont>