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The current advertiser boycott of London tabloid The News of the World is the fourth recent incident in which marketers have publicly displayed their revulsion at Rupert Murdoch’s media empire. No other media network so routinely attracts the ire of the companies whose ads provide its revenue. As the complaints are not limited to just one sector of News Corp. (NWS), they suggest that the corporate culture for which Murdoch is responsible is now threatening the underlying basis of its business.
Among the companies that have either withdrawn adspend from the newspaper, or have said they will consider doing so, are Ford, Cadbury, Halifax, T-Mobile, Orange, Mitsibushi, The Co-operative Group, Vauxhall, Lloyds, Virgin, Vauxhall, Vodafone, easyJet, Tesco and Renault. That list is not exhaustive.
Advertisers — following the general public and members of Parliament — are disgusted that News of the World reporters hacked into the voicemails of 13-year-old murder victim Milly Dowler, two other murdered girls, Holly Wells and Jessica Chapman, and the son of Graham Foulkes, who was murdered in the 7/7 terrorist attacks of 2005.
Ask yourself, at what other media companies would the following debacles be tolerated without a single resignation:
- The phone hacking scandal may have cost News £40 million in legal bills. That’s on top of losses from the £1 million npower account involved in the current boycott, the £1.5 million Halifax business and Ford’s £600,000 ad biz.
- Fox News Channel commentator Glenn Beck was forced off the air after more than 100 advertisers pulled their spots from his show.
- News Corp. paid $656 million in legal settlements to end accusations that it monopolized the grocery coupon business with its News America Marketing Group unit. During that litigation, a Sara Lee executive complained that she felt like News America was “raping” her and enjoying it; a Pepsi executive said she believed News America was unethical in the way it forced advertisers to take bundled coupon deals; a Del Monte exec said she felt her company was “held hostage” by News; and a Heinz executive wanted to “rip a new A hole” at News because of the way its business was treated.
- Fox Soccer Channel host Stephen Cohen was forced to leave the network after an advertiser boycott that included Heineken protested his belief that the death of 96 Liverpool F.C. fans killed in a 1989 stadium crush were the fault of other fans (a government inquiry blamed the police and the design of the stadium).
The focus is now on News International CEO Rebekah Brookes, who was editor of News of the World at the time of the hacking and is now resisting calls for her to step down.
The fish rots from the head
But observers should really look at the top of the company, from which Murdoch’s decades-old corporate culture extends. Talk to anyone employed at News and they will tell you that although Murdoch never explicitly gives orders everyone knows that employees are encouraged to go to extremes for the company, politically or in business. News America CEO Paul Carlucci once said of his boss:
I work for a man who wants it all and doesn’t understand anyone telling him he can’t have it all. And know this, if you ever get into any of our businesses, I/we will destroy you.
It was Carlucci who supervised the $656 million antitrust fiasco. Carlucci is also the publisher of the New York Post, currently being sued for libel for accusing an alleged rape victim of being a prostitute based on a single anonymous source. The fact that he is still a senior executive at News tells you something about Murdoch’s misplaced priorities.
The circus caused by Murdoch’s empire may be about to impinge on his ambitions: The U.K. government, perturbed by the hacking scandal, has delayed approval of News’s acquisition of the remaining portion of the Sky Broadcasting network it does not currently own.
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