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Posts Tagged ‘Murdoch’

Murdoch and the Nuclear Option

Tylenol’s epic crisis response has finally been trumped.

The decision by Tylenol manufacturer Johnson & Johnson to pull the product from every store in the U.S. after a rash of fatal poisonings in 1982 has stood for decades as the most dramatic response to a PR crisis in history.  On Thursday, Rupert Murdoch leapfrogged past that milestone with a hyper-epic response to the crisis plaguing one of his media properties, London’s News of the World – he closed the paper down.  Forever. One commentator aptly called it “the nuclear option.”

It was hardly like shutting down the Shrewsbury ChronicleNews of the World is England’s largest-circulation Sunday newspaper. It’s been publishing since John Tyler was president (1843, in case you’re a bit hazy on the term of the president mocked as “His Accidency“).  And for 200 employees, it’s pink slips all around.

The cause of all this, in case you missed it, is the tabloid-titled “phone hacking scandal,” which has lead to the arrest of three News of the World senior staffers on charges of tapping voicemails to get stories – not just the voicemails of wayward politicos and celebrities, but of murder victims and their families as well. Charges also have been made that the paper paid the police for inside information.  Torrid and horrid stuff.

Murdoch defended his action, saying “it was the right thing to do,” and calling the alleged behavior of his employees “inhuman.”  We like that choice of word a lot – there’s no mousing around going on here, as tough words follow grand actions.  But are Murdoch’s actions the right actions?

We think so, for a lot of reasons.

  • The News of the World brand has suffered long-term, possibly permanent damage. You can’t repackage a newspaper in ethics-meltdown-proof packaging, so it’s likely most of the publication’s readers and advertisers will go elsewhere.
  • The closure allowed Murdoch to claim some high ground as bad stuff was swirling all around him, an artful feat in a crisis. Whether he’ll hold on to the high ground or not will become more clear as details on the extent of the scandal emerge.
  • It also took some of the wind out of the hacking story. Yes the story is still there and will continue for some time, but with less ferocity than would have been the case were News of the World still publishing.
  • It gives Murdoch an opportunity to build his other London tab, the Sun, into a much larger vehicle.
  • And it shows Murdoch to be a man who is truly horrified by what took place under his watch, and one who is willing to take dramatic action to ensure that such behavior will not happen again.

That last point is the one that made the closure decision a go, in our estimation.  After all, Murdoch is in the final stretches of a $12.5 billion take-over of the parts of Britain’s BSkyB satellite network he doesn’t already own, and the character of the acquirer is one aspect regulators consider before giving such transactions the government’s approval.

Sky is a more valuable asset than just another London tabloid, so Murdoch’s move, while dramatic and controversial, was well-reasoned and sound.

We’re just waiting for some news regarding how the 200 dismissed workers will be treated. Little loose ends like that have the potential to do great damage if not handled well.