Hackgate, Leveson & News Corp

Spinning out of control?

MAC301

Overview

• Media culture

• Corporate communications

• Misleading the public

• Enron

• #hackgate

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

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

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

News Corp ownership?

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)

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)

Industry definition

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

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

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)

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

Why does this matter?

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…

Example: Enron

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

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

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

Toxic brand

• Arthur Anderson split into 2:

– Accountancy

– Consultancy

• Rebranded consultancy firm as

Accenture – largest in the world

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?

Hackgate

The denials

Evade responsibility

Reduce offensiveness

Transcendence

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

Apology?

News of the World

• July 7th News of the World closure

announced

The Humble Murdochs

• July 2011 House of Commons

The Shocked Tycoon

The Mafia?

Leveson

One rogue reporter?

The truth will out

• But at what cost?

• Public trust?

• Press freedom

• Statutory regulation?

The Sun on Sunday

The Sun on Sunday

• Cynical maneuver?

• Business as usual?

• Leveson & the Met?

Bye-bye James

• 29th Feb 2012

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…

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”

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?