Making sense of events in the Murdoch empire
Quite a lot has been happening at News Corporation over the past few days. So here are a few tenuously connected thoughts about it all.
First, what to make of James Murdoch's move to New York to become deputy chief operating officer of News Corporation?
That has been widely interpreted as a promotion, and as his anointing as heir apparent to Rupert Murdoch, his father, the chairman and founder of News Corp.
Is it quite as clear as all that?
It can be a bit of nightmare having the title "deputy" anything. The incumbents of such roles often lack the autonomy to prove themselves, and they're conveniently placed to soak up criticism when things go wrong.
Those of us who've been deputies in our time, albeit with shared responsibility for a few men and a mangy hound rather than a great media empire, usually see these positions as rites of passage of the most hideous kind.
Also, in the role he's leaving - Chairman and Chief Executive, Europe and Asia as well as Executive Chairman of the British newspaper subsidiary, News International - James Murdoch has the very great advantage that he is in London, a long way from the mothership in the US. That in itself delivers power.
And remember that this is a chap who till 2007 was chief executive of a very substantial, separately listed company, British Sky Broadcasting.
Arguably therefore James Murdoch is sacrificing quite of lot of personal independence and autonomy in the relocation to New York.
Finally, and this is the oddest thing of all, the press release announcing James Murdoch's appointment contains a flattering quote about him from Chase Carey, his immediate boss as chief operating officer. But there is nothing at all from the bloke who really matters, the ultimate boss, his dad, Rupert Murdoch.
Kremlinogists would see that as a symbolically important public confirmation of the hierarchy: Rupert Murdoch is unambiguously in charge; and James Murdoch reports to Rupert Murdoch's number two.
So although James Murdoch may well be in the best position to ultimately assume control of the whole of News Corporation, he is probably more of an heir presumptive than an heir apparent: there are normally personal risks associated with working in close proximity to what the French would call "le patron"; the press release naming James Murdoch as next chairman of News Corp could yet never be written.
Second, how damaging for News International and News Corporation are the arrests of the former news editor of the News of the World, Ian Edmondson, and the current chief reporter of the News of the World, Neville Thurlbeck?
Well News Corp sources tell me they were not surprised. "We assumed this day would come" said one. "We supplied the evidence to the police. If we hadn't given vast numbers of e-mails to the police, what would they have?"
The point is that News Corporation and News International have already suffered serious reputational damage from the disclosure that a private detective hacked into mobile phones to obtain stories for the News of the World.
What matters now is whether the police build a case implicating News International executives in the alleged crime, whether News International as a corporate entity is vulnerable to being charged, and how News International deals with compensation demands from those celebrities and prominent individuals who claim that their right to privacy has been breached (see my post Murdoch employs BP strategy for more on this).
Thirdly, and lastly, with James Murdoch relocating to New York, does News Corporation retain its appetite to own all of British Sky Broadcasting - since James Murdoch was running the takeover bid for BSkyB?
I think it does. But I would be surprised if News Corporation were to attempt to agree a price behind the scenes with BSkyB's board.
My hunch would be that as and when Jeremy Hunt, the culture secretary, makes his formal announcement that the bid can proceed - which probably won't be till after the royal wedding (for reasons that are slightly opaque) - News Corp will announce that it is prepared to pay around 820p per share for the 61% of BSkyB it doesn't already own.
That's broadly in line with the current share price. But way less than is wanted by some independent shareholders, such as Odey.
The threat from News Corp would be that if the board and investors turn down that offer, BSkyB would come back in a few months time - when various commitments on the takeover process it agreed last year elapse - with a much lower offer, of around 750p per share.
This would be the tricky question in effect posed by News Corp for BSkyB's board and shareholders: is BSkyB's recent strong performance sustainable in a consumer climate in the UK which appears to be deteriorating very fast and where there are huge looming disruptive technological challenges to be faced (from TV delivered over broadband internet, in particular)?
That said, I am clear that Rupert Murdoch is determined to press ahead with the bid for BSkyB. And, funnily enough, I wasn't persuaded of that a few weeks ago.
I'm 
Comment number 1.
At 6th Apr 2011, NorthSeaHalibut wrote:This comment was removed because the moderators found it broke the house rules. Explain.
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Comment number 2.
At 6th Apr 2011, not-shakespeare wrote:Obsessing about News Corp again Robert?
Is there some sort of counselling available?
How about some non Murdoch business news?
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Comment number 3.
At 6th Apr 2011, Sasha Clarkson wrote:"Kremlinogists" Robert? I love it!
It reminds me of the old Russian joke about '袩袪袗袙袛袗' and '袠袟袙袝小孝袠携', ('The Truth' and 'The News' respectively.)
"In 'The Truth' there's no truth, and in 'The News' there's no news!"
"Fair and Balanced" :-D
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Comment number 4.
At 6th Apr 2011, Kieran wrote:Anyone want to take a guess how long before a post comes in attacking the 91热爆? It seems inevitable whenever the media is mentioned.
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Comment number 5.
At 6th Apr 2011, costmeabob wrote:Robert, did you forget to mention the possibility that, with James Murdoch in New York
so suddenly, it pre-empts any future extradition proceedings regarding New of the
World investigations, allegations and prosecution of managerment and directors?
Which is why Mr Murdoch Jnr, has been so publicly demoted.
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Comment number 6.
At 6th Apr 2011, EazilyGrizly wrote:This comment was removed because the moderators found it broke the house rules. Explain.
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Comment number 7.
At 6th Apr 2011, Seer wrote:Robert, Why do you have a photo of Herr Flick on your blogg?
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Comment number 8.
At 6th Apr 2011, watriler wrote:"What matters now is whether the police build a case implicating News International executives in the alleged crime, whether News International as a corporate entity is vulnerable to being charged," and will they identify individual culpability that in these blogs dare not speak its name.
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Comment number 9.
At 6th Apr 2011, EazilyGrizly wrote:Would be curious to get the inside, uncensored view on what the people who had to climb their way up Murdoch's slippery pole feel about Murdoch Junior.
In ways the grooming the heir shows Murdoch senior as being quite a traditionalist.
"One day my son, all of this will be yours"
"Whatever"
"You'll be captain of the not so good ship Murdoch and all who sale in him"
"Get a life pops"
"Your own office at the top, looking out over the world"
"Can I have a jelly bean machine? and a playstation with an enormous TV screeen for that, you know, completely immersive experience?"
"Your own PA"
"Whoah, will she be hot?"
"Private jets, helicopters waiting to take you anywhere in the world"
"Jimmy's house? his mum's so hot, they've got their own helipad"
"You ungrateful little..."
"Loser"
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Comment number 10.
At 6th Apr 2011, jammydodger wrote:It would be reassuring to see the whole affair this time thoroughly and competently investigated for all potential breaches of the law by those whose job it is to do so. It would also be reassuring to see a full judicial inquiry into the original "investigation", using that word in its very loosest sense, of course.
I would not advise anyone to hold their breath on either aspect- the consequences would almost certainly be fatal.
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Comment number 11.
At 6th Apr 2011, hughesz wrote:Its is Dad , he does n't need glowing public remarks.
I am willing to bet within 5 years James is in charge of News International.
On the arrests , we will have to see, as no one is publishing much information . Interesting that it is "Alleged" Andy Gray is one of the people seeking damages by legal action when he was still working for SKY.
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Comment number 12.
At 6th Apr 2011, The Itinerant ex-pat wrote:Anything that Mr Murdoch doesn't like is fine by me.
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Comment number 13.
At 6th Apr 2011, EazilyGrizly wrote:"Ve haf vays of listening to you talk"
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Comment number 14.
At 6th Apr 2011, bryanL wrote:Why is everyone so apoplectic about News International? Who is being forced to buy the Sun, the NotW, the Times or watch only Sky News? There are other news sources, all available at no different cost to the "people" than that of Murdoch's. I have a Sky subscription, but seldom watch Sky News. I, like many, watch 91热爆 news and find that is not blameless in its content. The 91热爆 itself is not unknown to use devious practices to gain an intrusive "exclusive".
Is there a smell of hypocrisy around? Or bonuses to salaries?
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Comment number 15.
At 6th Apr 2011, nautonier wrote:A good starting point ... what level of UK competition here would be fair among all of the the players ... Are new entrants required and to be encouraged?
How much effect is EU law having on the UK with this one? EU law may be saddling the UK with two big competitors ... 91热爆 and Sky as both subsidised?
How can this be fair on ITV and C4?
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Comment number 16.
At 6th Apr 2011, avalanche-jersey wrote:7. At 10:02am on 6th Apr 2011, Seer wrote:
Robert, Why do you have a photo of Herr Flick on your blogg?
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I didnt notice first time but the similarity is quite remarkable
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Comment number 17.
At 6th Apr 2011, Chris I wrote:Fact....
"The News International chief executive, Rebekah Brooks, was asked by the chair of a Commons committee late on Wednesday to provide details of payments made by the Sun newspaper to police officers".
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Comment number 18.
At 6th Apr 2011, NorthSeaHalibut wrote:#7. At 10:02am on 6th Apr 2011, Seer wrote:
"Robert, Why do you have a photo of Herr Flick on your blogg?"
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Damn, you beat me to.
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Comment number 19.
At 6th Apr 2011, movedtocomment wrote:I read this post with some resignation.........
I may be boring people here, forgive me, but don't tell me that a whole pack of journalists were allowed to think for themselves, spend money from the corporate pot by themselves and get supposedly 'scoop' after 'scoop' without management thanks and comendation.
Phone hacking..... well was anyone suprised any of the papers aren't doing it ? Damage limitation on the Murdoch family....... move the heir to distant shores - I'm with costmeabob. I'm resigned to the workers being shot...... management will be sipping martini's in the oak bar courtesy of dad.
With BP they 'supposedly' removed the head over the wrongdoing, they didn't jail the driller.
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Comment number 20.
At 6th Apr 2011, openside50 wrote:For god sakes Mr Peston will you stop banging on about the 'Murdoch Empire'
Yes they are a massive player yes they are in a monopoly position - using the UK version of monopoly that is, 25% of market share - but so are the 91热爆
Which is why your obsession is both laughable and hypocritical
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Comment number 21.
At 6th Apr 2011, M_T_Wallet wrote:Welcome to the future.
You can have any News as long as it is Sky
You can have any food provided you buy it from the Supermarket Oligopoly Cartel
You can have any car fuel provided you buy it from the Oil Industry Oligopoly Cartel
You can have any buy any household fuel provided you buy it from the Energy Supplier Oligopoly Cartel.
Your child can attend schools sponsored by Fast Food Chains and the education provider can be a Creationist.
You can get better provided you can get an op and make sure you are really really in pain first.
/news/health-12964360
Oh and the City Financeers and their Glove Puppets in Westmister can continue to live in their Ivory Towers.
Just yesterday Blair-Max (Clegg) standing in for Blair-Light (Cameron) was blathering on about internships. Work experience it is called.
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Comment number 22.
At 6th Apr 2011, U14833513 wrote:All this user's posts have been removed.Why?
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Comment number 23.
At 8th Apr 2011, Stephanni Snape wrote:All this user's posts have been removed.Why?
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Comment number 24.
At 10th Apr 2011, perkinwellbeck wrote:Why should we need to discuss this lot in the first place??it is a disgrace that our politcians and the british media/establishment live in fear of this lot.show some guts and fight,tell them where to get off.the people of this country should join the fight against them too,don't subscribe and don't buy certian papers.we need to find what made this country great again,because since 1979 we have been going down hill fast! time to put on the breaks.....
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