Home / Media / Tuesday September 29, 2009 at the Labour Party conference – was this the day the wheels came off the News Corporation chariot?

Tuesday September 29, 2009 at the Labour Party conference – was this the day the wheels came off the News Corporation chariot?

The scene was Brighton, England and embattled UK prime minister Gordon Brown had just tried (and mostly failed) to rally his battered troops. Leading Labour politicos at the party conference were no doubt looking forward to a few sustaining snifters at the News International party, News International being the News Corporation-owned company that published the Sun, the News of the World, The Times and the Sunday Times in the UK.

But then the big-selling tabloid Sun announced gleefully that, after 12 years of supporting Labour, mostly Tony Blair as PM, it was switching allegiance to David Cameron’s Conservative Party. Not only that, News executives took to the airwaves to lambast Labour and the company even festooned its fortress-like Wapping HQ in Tory blue (floodlit to boot) and pumped blue smoke out of the air conditioning system.

By any standards this was a staggering display of crass malice, far outweighing former Sun editor Kelvin MacKenzie’s boast that it was ‘the Sun wot on it’ after Tory John Major’s surprising victory over Labour’s Neil Kinnock in 1992. At least MacKenzie had flair, in his sometimes brutish way. The Sun’s noisy posturing in 2009 and its timing just struck everyone as gratuitously nasty.

So whose idea was it? Not newly-appointed Sun editor Dominic Mohan it seems but his predecessor new News International CEO Rebekah Brooks (who’d only been in the job a few months), eagerly cheered on by James Murdoch (pictured), newly in charge of News Corp’s UK newspapers as well as BSkyB and the Asian Star TV business.

Some important folk were far from pleased at these antics: PM Gordon Brown for one, clearly, but also News Corp founder, chairman and CEO Rupert Murdoch, James’ father.

Brown and Murdoch (and their formidable wives Sarah Brown and Wendi Deng) were friends but following the Sun announcement a telephone call took place in which, according to MacKenzie, Brown told Murdoch that, as he (Murdoch) was trying to destroy him and his party, he would do the same to Murdoch and his company.

This must have seemed like so much hot air shortly afterwards as Brown lost the subsequent General Election and a Tory-dominated coalition government came into power, one that was even more eager than Labour had been to suck up the powerful News International papers. New PM David Cameron and wife Samantha were frequent dinner companions of Brooks and her husband racing figure Charlie Brooks at their weekend pads in Oxfordshire.

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All the while, though, a time bomb was ticking under News International and, ultimately, News Corporation; the phone hacking scandal at the News of the World.

News executives thought they had put a lid on this after Royal affairs reporter Clive Goodman was jailed for phone hacking back in 2006, along with private investigator Glenn Mulcaire.

But the impulsive James Murdoch had made another big error, agreeing to settlements worth several hundred thousand pounds to PR man Max Clifford and Professional Footballers’ Association boss Gordon Taylor in return for them withdrawing legal actions about alleged phone-hacking.

When the British press, chiefly the Guardian newspaper, woke up to the fact that this looked remarkably generous, therefore fishy, the phone hacking scandal flared into life. Brooks and a number of News of the World journalists have since been arrested, the News of the World has been closed and James Murdoch, now deputy chief operating officer of News Corporation, may still face criminal charges if evidence emerges that he authorised the payment to Taylor knowing that a criminal offence (phone hacking) had occurred.

Now the New York Times reports that there is a growing rift between Rupert, who is 80, and heir apparent James over not just phone hacking but the best way to manage the vast, sprawling News Corporation which also includes the Fox film and TV businesses.

And their different ways of doing things are thrown into sharp relief by the events of Tuesday September 29 2009 at the Labour Party conference.

Rupert knows full well the value of political influence but he also knows how to exercise it in the shadows. He was the first non-politician to see David Cameron in Downing Street after the 2010 election, but he went in the back door.

He disagreed with the September 29 decision to back Cameron so soon (the election was still six months away), hated the way it was done and was distressed by the abrupt loss of his friendship with Brown, whom (rather against the odds) he liked and admired.

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He probably also recognised that politicians have long memories and the humiliation James Murdoch and Rebekah Brooks had inflicted on the Labour Party (Labour minister Peter Mandelson was seen around the Grand Hotel in Brighton hissing with rage) would come back to haunt him.

As indeed it did when Labour MP Tom Watson, a long-time Brown ally, led the charge against the Murdochs in the televised Parliamentary culture, Media and Sport committee into phone hacking which shone a fierce light on News International’s murky doings and parent company News Corporation’s apparent ignorance of them.

MP Watson is due in the US this week to attend News Corporation’s annual meeting at which a sizeable minority of shareholder votes are due to be cast against Rupert and his two sons James and Lachlan being re-elected to the board. Watson may speak at the meeting.

The Murdochs own about 12 per cent of News Corp but speak for 40 per cent of the votes due to its two-tier structure, so they’ll probably survive, in the short term at least.

But the real point at issue is not phone hacking but an old-fashioned, unrepresentative and (maybe) unethical way of running a huge company. It’s ironic that the modernising, tech-minded James (no fan of newspapers either) is most at risk from this.

It’s the colossal hubris, demonstrated to all and sundry in the noisy abandonment of Labour at its own event, that most concerns shareholders and all the other enemies the Murdochs have accumulated recently (not that they were ever short of such).

So maybe Gordon Brown, that unlikely Gladiator de nos jours, will have his revenge.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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