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October 16, 2011
News Corp continues to be on the defensive as more evidence is emerging of the anything goes attitude--the schoolyard bully?-- that seems to pervade Rupert Murdoch’s the disinformation and populist tone of his papers.
The anything goes attitude is giving rise to a revolt by shareholders who have the Murdoch's in their spotlight. They are opposed to the re-election of Rupert Murdoch's two sons, James and Lachlan, at the News Corp annual meeting next week because of the phone-hacking scandal.
The more evidence emerging refers to Nick Davies of The Guardian outlining the circulation scam at News Corporation's flagship newspaper, the Wall Street Journal.
Davies says:
The Guardian found evidence that the Journal had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate, misleading readers and advertisers about the Journal's true circulation....The Journal's decision to secretly purchase its own papers began with an unusual scheme to boost circulation, known as the Future Leadership Institute. Starting in January 2008, the Journal linked up with European companies who sponsored seminars for university students who were likely to be future leaders. The Journal rewarded the sponsors by publishing their names in a special panel published in the paper. The sponsors paid for that publicity by buying copies of the Journal at a knock-down rate of no more than 5¢ each. Those papers were then distributed to university students. At the bottom line, the sponsors enjoyed a prestigious link to the Journal, and the Journal boosted its circulation figures.
Boosting circulation figures is standard practice in Australia--witness all the free Australian newspapers at airports and universities. Presumably these freebies are accepted as legitimate, rather than a circulation scam. Circulation equals revenue from ads.
However, the Murdochs know their voting strength makes it difficult for investors to unseat the family members or other directors who have close ties with them. The dual-class share structure of News Corp gives the Murdoch family almost 40% of the voting rights in the company despite owning only 12% of the equity.
In Australia News Ltd doesn't give the Coalition money to spend on political propaganda and then demand business favours in return, Murdoch's papers provide the political propaganda free of charge. No money changed hands. But the briber expects and will receive business favours--it's what has happened in the past--- and the bribed politicians get puff pieces. Even the ALP treads carefully---its media inquiry carefully avoids the issue of media ownership and so News Ltd dominance of the newspaper market.
Ownership matters given the media's relationship with democracy. The media matter because they are historically seen seen as a forum for democratic politics. Martin Wolfe of the Financial Times says:
Diverse media require diverse ownership. But economic forces may generate a degree of concentration incompatible with desirable diversity. Politicians will then find themselves grovelling before proprietors who control their communications with the public. At worst, the proprietor may so twist and distort this needed communication as to transform public life. I would argue that the Fox network’s rightwing populism has done just that in the US. This should not happen in the UK.
Nor Australia.
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Thats an interesting comment by Wolfe you cite.
Interesting in that he has carefully worded it to escape overly strong criticism of Murdochia.
Firstly he has used a hypthetical tone eg 'may', 'will then' [rather than 'do now'], 'at worst ... may', 'I would argue [rather than 'it is clear'] and secondly he has restricted the application of these muted criticisms to the US with his last line which implies that Murdochian misinformation and propaganda is not already a clearly observable reality in the UK [he probably is not aware of the situation in the southern antipode].
It seems Wolfe is very tentatively dipping just the tip of his toe into the water to test how hot it is just in case he gets a violent reaction.
He deserves some credit for his article, it involves a degree of courage, but I do wish he had called a spade a &%HKU^&!