Rupert Murdoch - a colossus who has definitely lost the Midas touch

When precisely did Rupert Murdoch lose the Midas touch, asks Frank Kane.
Rupert Murdoch, right, and his son James. AP Photo
Rupert Murdoch, right, and his son James. AP Photo

When precisely did Rupert Murdoch lose the Midas touch?

In the past 10 days, his decline has been tangible, even visible from the shots of him arriving in Wapping, east London, to "rescue" News International.

Is this the same man who once bestrode the worlds of media, business and politics like a colossus?

The gathering pace of shocking revelations about the goings-on at the extinct News of the World, and his apparent inability to stem the flow, is a clear sign that he has lost the characteristic that singled him out from all other press barons: his intuitive sense of news.

For a man born with printers' ink in his veins, it is so out of character that you almost begin to think there has been some kind of personality swap.

The decision to close the UK's biggest-selling Sunday newspaper may have been the call of his son, James, but Murdoch Sr would have had to agree and approve.

Some have compared it to the audacious move to the new print plant in 1986. I don't get that.

The Wapping move was a strategic initiative that overnight changed the economics of the British media business; the closure of the News of the World was a panic reaction forced on the Murdochs by the rising "toxicity" of the brand.

How did it come to such a rock-and-a-hard place situation? Rupert Murdoch has faced crises before with sangfroid. In the early 1990s he very nearly went bust, but pulled out of the vicious spiral with a poker player's skill.

The year-long industrial confrontation that followed the Wapping move showed him at his most steely steadfast.

It would be foolish to write him off, especially outside the UK, but there has been a quantum change in his standing in the global English language press. He is reduced, maybe not terminally, but permanently.

In fact, the signs have been there for a while of the slow degradation of management talent at News Corp, the family-controlled master company for his global media empire.

Murdoch Sr never really got to grips with the age of the internet. He dithered over a web strategy for years, then produced a mediocre website for his UK print titles, and improved it only when he decided he had to charge for it, a move that has not been successful.

Signs of management failure are there for all to see: the purchase of MySpace for US$580 million (Dh2.13 billion) in 2005, sold last month for $35m; the decision to buy his daughter Elisabeth's TV production company for a staggering $615m, opening him up to renewed charges of nepotism; the $2.8bn write-off on The Wall Street Journal, a vanity purchase if ever there was one.

The bid to buy BSkyB was flawed from the start. Not telling investors the price he planned to pay made a moving target of the share price at both the satellite TV company and at News Corp. The arbitrageurs loved it; the serious investors hated it.

But above all, his usually impeccable judgement of people seems to have deserted him.

His son Lachlan walked out - he was heir apparent at News Corp; younger son James, though successful at BSkyB, is obviously struggling with the broader responsibilities as chairman and chief executive of News International in Europe and Asia.

Rebekah Brooks, the former editor turned boss of the UK newspaper business, looks anything but chief executive grade.

Despite the Murdochs' "total" loyalty, she seems certain to exit once her role as "lightning conductor" is completed.

How much worse can it get? In the UK, the legal side is a bottomless pit, with new investigations and arrests announced almost daily.

Politically, Mr Murdoch has lost the influence forever he had with UK governments for more than 30 years.

In business terms in Britain, the empire is also staring into the abyss. The BSkyB deal has been postponed, the hacking contagion has spreads to other titles, and shares of News Corp have been in free fall. It is impossible to say where it will end.

The closure of all News Corp's once sacred UK print titles - from The Times to The Sun - was a ludicrous and unthinkable notion just a week ago. Now such an outcome is being discussed, if only in hushed tones, up and down Fleet Street.

News Corp strategists are hoping the damage can be confined to the UK. Some US and Middle East investors have expressed support for the Murdochs in their time of crisis. But that could all change with another new setback.

That's the problem with toxicity: it's very difficult to stop it spreading throughout the body, corporal or corporate.

Published: July 13, 2011 04:00 AM

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