OFF THE GRID

Hacking Scandal: Murdoch to Blair—Help!

Sep 21, 10 | 8:07 AM   byMichael Wolff
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A British banker once described for me what happened when Rupert Murdoch decided to make then-31-year-old son James the CEO of BSkyB, the UK satellite television company managed by News Corp. but in which it holds only a minority stake. (News Corp. is now trying to buy all of BSkyB.) There was a huge and predictable cry from other shareholders that Murdoch was autocratically imposing his son on the company. It was a tense moment in which the younger Murdoch might have been turned out and News Corp.’s grip on BSkyB loosened.

But then Rupert started working the phones—one of his underrated skills. When he was done there was hardly anyone in the City who’d ever benefited from Murdoch-related work who hadn’t been called. Murdoch was like a politician: affable, cajoling, and, deftly employing the assets of his favor bank. In the end, what uprising there was among the majority shareholders was quelled and James was installed in BSkyB’s corner office.

Rupert, I hear, is on the phone again. He’s annoyed by the way the phone hacking scandal has been dealt with by James and his number two, Rebekah Brooks. James and Rebekah are circling the wagons, Rupert feels; they’re acting defensive and guilty instead of strategic and political. He’s worried also that News Corp.’s deal to buy the rest of BSkyB could be hurt by the hacking crisis.

So Rupert’s taking over.

He’s in the war room.

Rupert understands that his problem with Labour politicians is greater now than it might have been with a Labour prime minister in power. Labour doesn’t owe Rupert anything now. Labour doesn’t have a beholden prime minister trying not to antagonize Rupert.

But Rupert does, however, still have a Labour prime minister who is beholden. Within recent days, Murdoch is reported by my sources to have consulted Tony Blair on his hacking problem and how best to defend his company and himself.
This in turn is causing consternation within News Corp., which is trying to keep Murdoch himself as far away from the scandal as possible. “He just can’t keep his hands off,” said a News source.

This round of calls may be, however, not so much a sign of Murdoch’s acumen and network—not like his defense of James at BSkyB in 2003—as much as it is a sign of Murdoch’s fading juice.

Blair may still be Murdoch’s man—Blair is close to the entire Murdoch family—but it’s unlikely that Blair can be much of a fixer for Murdoch anymore.

Murdoch, who has largely left the management of his company in the U.K., and the management of his British political interests, to his son, James, may no longer know who to call.

More of Newser founder Michael Wolff's articles and commentary can be found at VanityFair.com, where he writes a regular column. He can be emailed at michael@newser.com. You can also follow him on Twitter: @MichaelWolffNYC.
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OFF THE GRID is about why the news is the news. Here are the real motivations of both media and newsmakers. Here's the backstory. This is a look at the inner workings of desperate media, the inner life of the publicity crazed, and the true meaning of the news of the day.