After an unprecedented protest vote against his sons and other sympathetic News Corp directors and with increased calls to step back, Rupert Murdoch has come to Australia and explicitly shown who is charge with yesterday’s sweeping News Ltd management reshuffle.
Without any need to consult Telstra, Kerry Stokes or James Packer, the trio that together own 75% of Foxtel, Rupert was able to poach the well-regarded Foxtel CEO Kim Williams to take News Ltd in a different direction.
And no matter what the other shareholders think, News Ltd executive Richard Freudenstein was then unilaterally slotted straight in to run Foxtel.
That’s pretty handy power for a bloke whose family owns just 3.25% of Foxtel, the pay-TV company that is negotiating with the federal government to pay $1.9 billion for Austar to create an Australian pay-TV monopoly.
The Murdoch family’s management monopoly over Foxtel and 70% of Australia’s newspapers is emerging as a key issue.
For instance, Rupert Murdoch was able to simultaneously shun the Finkelstein inquiry at the same time as imposing himself as non-executive chairman of News Ltd. That was the strangest element of yesterday’s announcement.
Kim Williams told Fran Kelly this morning this move was designed to “confirm Rupert’s continuing relationship” with the newspaper empire his late father helped build.
It will also provides comfort to those remaining long-serving Rupert loyalists in the newspaper division, such as Chris Mitchell, Terry McCrann, Peter Blunden, Piers Akerman and Andrew Bolt.
In other words, opera-loving Kim Williams, who was once married to Kathy Lette and is now married to Gough Whitlam’s daughter, won’t be allowed to turf out any protected species in the newspaper business without Rupert signing off.
That said, as Stephen Rue’s infamous leaked September 7 memo to Crikey shows, Rupert has endorsed savage News Ltd cost cuts of 15-20% and Kim Williams has a very strong cost-control record at Foxtel. Time will tell whether indulgences such as Piers Akerman’s bloated six-figure salary remains off-limits from the trimming.
At one level the shake-up is a potential win for Lachlan Murdoch. John Hartigan refused to indulge many of Lachlan’s demands and the two fell out after he returned to Australia in 2005.
Similarly, The Australian’s editor-in-chief Chris Mitchell hasn’t intervened extensively after several direct complaints from Lachlan Murdoch about the Media section’s coverage of his disastrous stint running Network Ten. Lachlan would be more respected if he called the reporters directly, rather than continuing a long tradition of throwing his weight around because of the family name.
With Rupert sitting above him and no newspaper experience, it will be interesting to see how Williams responds to the next complaint from Lachlan.
That said, Lachlan’s tenure at Ten expires on December 31 when James Warburton starts as CEO, so the other theory is that Rupert’s appointment would potentially ease the way for Lachlan to return to News Ltd as non-executive chairman.
It is hard to see Rupert, who turns 81 in March, having much time for the News Ltd business. This latest two-week visit is one of the longest trips here that he’s made in decades.
There have been no reports of any contact with politicians, although I wouldn’t be surprised if the likes of Bill Shorten, Malcolm Turnbull and Tony Abbott hadn’t answered the call for a private chat. Maybe some enterprising journalists will ask them directly once Rupert’s private jet departs on Saturday.
Hartigan’s departure is a big blow for Abbott, as the two remain very close. Now that the carbon pricing legislation has cleared both houses, News Ltd’s nuclear strategy of pushing for regime change in Canberra will have to be reconsidered.
The commercial and reputation damage has been substantial. Foxtel’s Austar takeover bid is in doubt, Sky News has been thrown out of the Australia Network race courtesy of completely unsubtle leaks to Harto’s great mate Mark Day and the dynamic Ray Finkelstein QC has a blank canvas on which to cross-examine News Ltd practices.
The contrasting media coverage today was quite comical. The Australian produced almost North Korean-style tributes to the “Dear Leader” as if he was some sort of super-natural genius while Bruce Guthrie was allowed to paint Harto very black indeed across a variety of Fairfax and ABC platforms.
Guthrie even wrote in The Age that, apart from Col Allan, “other friends are said to be few and far between”.
That’s just not right. Harto may have been way out of his depth commercially, but he was a charming and popular schmoozer who understood the subtle power plays of newspaper publishing and journalism.
News Ltd’s greatest achievement on his watch was the $800 million paper gain on realestate.com.au, but there were far too many stuff-ups ranging from Melbourne Storm to ongoing NRL fiascos, the Guthrie court case, the Sky tender leaks, the Paul Whittaker appointment at The Daily Telegraph and those two recent damaging leaks to Crikey that just wouldn’t have happened if he was on top if his team.
Kim Williams will play a much more strategic and subtle game, but he got off to a bad start this morning, telling Jon Faine he had “no idea” if The Australian makes a profit.
Having only been offered the job a week ago, it just goes to show that Rupert did very little preparing for Hartigan’s departure even though it has been well flagged ever since Mark Day’s 2008 column tipping his mate would retire “in the next 12 to 24 months”.
This is the Chase Carey move. Rupert’s added his own fig leaf. The real question is whether a megalomaniac like Williams will be running the show or, more likely, that the fiscal reins are where the power is. You’d have to bet on the latter, which is bad for the “favourites” mentioned above, all of whom damage the business one way and another.
This substantial reorganisation is not the action of what appeared to be a semi-senile degenerate who appeared before the recent UK media enquiry .
It would now be on the cards for Rupert to get an invitation to join Actor’sEquity for that performance, and an Academy Award nomination would not be out of the question.
So Big Harto is out of the frame and Williams is installed. He can say, as he did regarding the profitability or otherwise of the national masthead, that, like Manuel of Faulty Towers fame, he knows nothing.
We knows nothing about the Storm rorts, the Sky tender leaks and all the other fiascos which remain unsorted.
I give him two or three years as front man with straight bat, always returning the ball to the sender. Ditto Rupert, whose shareholders must eventually express concern about the low dividends, the red ink and the continuing chaos.
These are interesting time, indeed, but not in the papers. For the first time in several years, I sampled the Oz last weekend. A curate’s egg, if ever there was one.
Today, I picked up a Terror whilst sipping a coffee. Nearly ruined the coffee. A bit more bleating from Miranda about Tuesday’s stale news regarding the attempted rebuttal of News’s 70% share of Australian papers. Didn’t anything happen yesterday? Why is the Telegraph banging on and on and, by so doing, drawing attention to the very thing that they wish would go away?
Shredded, at least the papers make reasonable mulch. As will, in the fullness of time, Rupert’s earthly body.
Well Harto’s got his comeuppance! Rupert is fighting fires on many fronts and doesn’t need the Harto’s mindless fight with the Gillard Government to add to his worries. Fact is Harto has cost him dearly on a number of fronts in Australia and the Murdoch hip pocket won’t take any more!