Hackgate, Leveson & News Corp Spinning out of control? MAC301
Jan 14, 2015
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?
The denials
Evade responsibility
Reduce offensiveness
Transcendence
See also: ‘How Brooks tried to “destroy the Daily Mail”’ via The New Statesman
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?
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?