Here are potential responses to those questions: 1. News Corp does not appear to have been fully open or truthful initially about the extent of phone hacking at News of the World. There were repeated denials that went beyond what has since been revealed. 2. News Corp failed to take appropriate action for many years despite signs that phone hacking went beyond a single rogue reporter. A proper internal investigation should have been conducted much earlier. 3. To recover, News Corp needs to fully acknowledge responsibility, make a sincere apology, reform governance and compliance, and rebuild trust over the long term through transparent and ethical journalism. 4. The closure of News of the World does seem like a strategic decision aimed more at reputation management than

1. Hackgate, Leveson
& News Corp
Spinning out of control?
MAC301

2. Overview
• Media culture
• Corporate communications
• Misleading the public
• Enron
• #hackgate

3. Media-based society
• ‘Those who controlled the language
controlled society and could bring humankind
to slavery or to freedom… Those who
controlled the press controlled the ideology
and the social order.’
– Altschull, 1995: 206

4. Media-based society
• The mass-media is seen by pluralists as for
the most part representing the diverse range
of views in society, and fairly autonomous
from the state, with individual operatives and
journalists enjoying a fair degree of freedom.
The relationship between the government,
the media and public opinion is seen as
essential to the operation of any fair
democracy
– Saeed and Laverty, 2006

5. The Rise of Corporate Communication
• The twentieth century has been characterized by
three developments of great political importance: the
growth of democracy, the growth of corporate power
and the growth of corporate propaganda as a means
of protecting corporate power against democracy
– Alex Carey, Taking the Risk of out of Democracy in New
Internationalist July 1999: 18/19

6. News Corp ownership?

7. News Corp ownership?
• “Rupert Murdoch argued strongly for a war
with Iraq in an interview this week. Which
might explain why his 175 editors around the
world are backing it too...”
– Roy Greenslade (2003, Guardian.co.uk)

8. Industry definition
• Henslowe argues that PR is concerned with
„ the different ways of establishing and
maintaining a sound two-way
communication ‟ between its clients and
everything outside of the organisation. This
includes stakeholders, the public and perhaps
more importantly, the media.
– (Henslowe, 2003:3)

9. Industry definition
• Cottle writes that the industry is „ the
deliberate management of public image
and information in pursuit of
organisational interests’
– (Cottle, 2003:3)

10. Agenda Setting: PR
• Wilcox (2003) refers to this as the ‘technician’s mentality’, which
means that PR practitioners are solely concerned about how the
message is communicated, and not about the content of the
messages. This argument can be supported by a survey published
in the PR Week in May 2000. The findings showed that 25 % of PR
executives admitted lying, 39 % said they exaggerated the truth,
44% was unsure about the ethics of tasks they would be asked to
perform and 62% believed they compromised in their work
– http://www.prwatch.org/prwissues/2000Q2/liars.html

11. Truthfulness
• “We would argue that telling partial truths is
inherent to PR practice”
• “But … such is the transparency of internet-
mediated discourse … the pragmatic
response has to be openness”
– Philips and Young (2009:227)

12. PR Tactics: Crisis Management
• Prof. William Benoit suggests the following:
A. Denial
B. Evade Responsibility
C. Reduce offensiveness
D. Transcendence
E. Offer apology
• In Dennis Wilcox, 2006, Public Relations: Strategies and
Tactics

13. Why does this matter?

14. Why does this matter?
• Corporate entities mislead the public (the market) all the
time
– eg keeping new product development secret has been part of
Apple’s strategy for a decade
• They use strategic communications to do so
– Eg high profile public announcements
• The vast majority of the time they are not breaking any
laws
• Occasionally, however, a line is crossed…

15. Example: Enron

16. Enron
• US energy company rose to prominence in 1990s
• Stock value rose far above normal market rates
• By 2001 Enron stock was valued at $83 with a
market capitalization of > $60 billion
• Rated the most innovative large company in
America in Fortune

17. Enron
• Enron's nontransparent financial statements did
not clearly depict its operations and finances
• Enron's auditor, Arthur Andersen, was accused of
applying reckless standards in its audits owing to
a conflict of interest over the significant
consulting fees generated by Enron

18. Enron
• Biggest corporate collapse ever at the time
(Oct 2001)
• Exploited accounting loopholes
• Hid billions of debt in failed deals
• Arthur Anderson found guilty of destroying
documents

19. Toxic brand
• Arthur Anderson split into 2:
– Accountancy
– Consultancy
• Rebranded consultancy firm as Accenture –
largest in the world

20. From Enron to News Corp
• When the watchdog role of the press is
compromised by accusations of illegal
practices, how should the company in
question respond?

21. Hackgate

23. The denials

24. Evade responsibility

25. Reduce offensiveness

26. Transcendence
See also: ‘How Brooks tried to “destroy the Daily Mail”’ via The New Statesman

27. Apology?

28. News of the World
• July 7th News of the World closure announced

29. The Humble Murdochs
• July 2011 House of Commons

30. The Shocked Tycoon

31. The Mafia?

32. Leveson

33. One rogue reporter?

34. The truth will out
• But at what cost?
• Public trust?
• Press freedom
• Statutory regulation?

35. The Sun on Sunday

36. The Sun on Sunday
• Cynical maneuver?
• Business as usual?
• Leveson & the Met?

37. Bye-bye James
• 29th Feb 2012

38. And on it goes…
• BBC Radio 4 The Media Show (14/3/2012)
• James Murdoch's written to the Commons
committee investigating phone hacking at the
News of the World, reasserting that he has not
misled Parliament while sharing responsibility
for not uncovering wrongdoing earlier…

39. And on it goes…
• BBC Radio 4 The Media Show (14/3/2012)
• Why has he written this now, without being
asked and what hangs on the committee's
delayed report?
• Dan Sabbagh – “This is a man fighting for his
professional reputation”

40. Questions?
1. How open or truthful have News Corp been in relation to the
phone hacking scandal?
2. To what extent did News Corp fail to take appropriate action?
How and when should it have done so?
3. How can News Corp recover from this crisis? What strategies
should they employ in the short term and the long term?
4. Was the closure of the News of the World a cynical decision based
on reputation/brand management?
5. Have News Corp managed to regain control of the situation?