It sounds like a story from another time, and yet it was only four weeks ago when Rupert Murdoch hosted a party at the Orangery in Kensington Gardens in the west of London, a historic brick building with large white-framed windows that is famous for its afternoon teas and popular as a venue for stylish weddings.
The old man was holding court at his British publishing house News International's summer party, and everyone was there, just as they had been in earlier years. The guests included Prime Minister David Cameron and his wife Samantha, opposition leader Ed Miliband and many other prominent figures in British politics -- as well as those hoping to become prominent. The guests ate oysters, sipped champagne and engaged in discreet conversations.
Now Britain's leading politicians have issued their own invitation to the 80-year-old Australian-American media mogul. When the clock at Big Ben strikes half past two on Tuesday, Murdoch and his 38-year-old son James, who is head of News Corp's European operations, will be expected to appear before the media committee of the British House of Commons, along with Rebekah Brooks, who quit as CEO of News International on Friday. But this time there will be no sparkling wine or light-hearted conversation. In fact, this time the members of parliament will be asking Murdoch and his son some unpleasant questions.
Murdoch will be asked how he responds to the charges that editors at his tabloid newspaper News of the World hacked into as many as 4,000 mobile phones, including that of a girl who had been kidnapped and was later found dead, the widow of a soldier killed in Iraq and the phones of the family members of terror victims. He will also be asked about the charge that his employees bribed police officers to obtain mobile phone numbers -- and why he allowed all of this to take place.
Empire in Jeopardy
For Murdoch, the most important thing is not the question of whether he should sell the papers he still owns in Britain: the tabloid The Sun, the broadsheet The Times and the Sunday Times. The papers only make up about 5 percent of his company's total revenues.
What Murdoch is concerned about is preventing the fire from spreading across the Atlantic from London to the group's headquarters in New York. What is really at stake is the company Murdoch built, starting with the two local Australian newspapers he inherited from his father almost 60 years ago: News Corp., Murdoch's "empire," as he calls it. With $32 billion (€22.7 billion) in annual sales, News Corp. is bigger and more powerful than three major German media conglomerates -- Bertelsmann, Axel Springer and ProSiebenSat.1 -- combined.
In the old days -- all of four weeks ago -- summoning the great Murdoch before a parliamentary committee would have been unheard of. Murdoch, the clever puppet master of British politics and head of the world's third-largest media organization, is supposedly called "Rupe" by his friends, and yet he claims that he has no friends. He does have enemies, who have described him as a shark or worse, even as they grudgingly admitted that they also respect him.
But now, in July 2011, everything is suddenly different. With his reputation battered, his stock down and his life's work in jeopardy, Murdoch's appearance in the House of Commons is both an act of penance and an opportunity. This time Murdoch is not the puppeteer but the central character. He has the potential to shine in the role of the sincere old man, putting on a show of humility as he addresses the MPs with his thick Australian accent. He already began his humility offensive last weekend by placing a full-page ad in major British newspapers that began with the words "We are sorry," and was signed: Rupert Murdoch.
Murdoch has no trouble jumping through hoops to achieve his objectives. In 1985, he even became a United States citizen so that he could get into the American market without impediment.
Like a general, he has conquered media companies on all continents over the decades. His realm includes the studio 20th Century Fox, which owns treasures like "Star Wars" and "Titanic," and close to 200 newspapers, including the unsuccessful Internet newspaper The Daily and the highly respected Wall Street Journal.
Avoided Like a Leper
Nowhere in the world is Murdoch as powerful as he is in the United States. But America too is turning up its nose at what is currently being flushed out of the gutters of the British boulevard press. Even the FBI has become involved, now that journalists at News of the World are suspected of having hacked into the phones of family members of the 9/11 victims. Anything that relates to 9/11 is a sensitive issue in the United States.
At stake is the future of Murdoch's Fox News chain in the US, a political terrier in the fight against President Barack Obama and a moneymaker for his group. Under the regulations of the US Federal Communications Commission (FCC), owners of television stations are required to be "of good character" to maintain the stations' broadcast licenses. If Fox crumbled, the empire would be in trouble.
Meanwhile, the British are showing the Americans how quickly certain things can be changed. "The relationship between politics and the media is being redefined," says Steven Barnett, a professor of communications at the University of Westminster. "The Murdoch myth is dead."
As more and more misdeeds allegedly committed by Murdoch's employees are revealed in the scandal surrounding News of the World, the man who politicians lionized only a few weeks is now being avoided like a leper. Prime Minister Cameron is already publicly giving Murdoch advice on how to run his business.
Ironically, Cameron's former communications director Andy Coulson, who resigned at the beginning of the year, was the editor of News of the World until 2007. Prior to his resignation as editor, it was revealed that the paper had hacked into Prince William's mobile phone. Nevertheless, Cameron hired Coulson a short time later. Then, in January, it emerged that Coulson had known more about the hacking than he had admitted. He was arrested on July 8 in connection with allegations of illegal phone-hacking. Now the fallout even extends to Cameron, who had described Coulson as a friend until a few days ago.
'Rupert Wants to Rule the World'
For some politicians, the recent events are like waking up from a long nightmare in which they had believed themselves to be in Murdoch's stranglehold. "We in Labour were cowed from reforming the media," Peter Mandelson, a close adviser to former Labour Prime Ministers Tony Blair and Gordon Brown, writes in the Guardian.
Others are apparently suffering from temporary memory lapses. On Thursday, Blair broke his silence and, in an interview on the BBC, complained that he had always felt "uncomfortable" about the close relationship between politicians and the media. Ironically Blair, as opposition leader in 1995, made a trip to Australia specifically to meet Murdoch. As prime minister, he spoke with Murdoch on the phone several times before the Iraq War to secure the support of his newspapers. If Blair felt uncomfortable about his relationship with Murdoch, he kept it well hidden.
Sumner Redstone, founder of the Viacom media group, once wrote: "Rupert wants to rule the world -- and he seems to be doing it."
But Murdoch isn't ruling at the moment. Instead, he is reacting -- and he is doing so very quickly. He has shut down the News of the World. He has also withdrawn his offer to acquire BSkyB, Britain's largest pay TV broadcaster. He had planned to spend about €9 billion on the remaining 61 percent of BSkyB that he doesn't own already. In a rare show of unity, the House of Commons called on Murdoch to withdraw his offer, and Murdoch complied.
From across the Atlantic, the New York Times is crowing over what it calls the "British spring" and writes, without the least bit of irony: "Democracy, aided by sunlight, has broken out in Britain." Will an American spring follow?
In a fiery op-ed piece in Newsweek, journalist Carl Bernstein, whose revelations about the Watergate affair ultimately brought down President Richard Nixon in 1974, wrote that the scandal could become "Murdoch's Watergate."
Democratic Senator Jay Rockefeller, chairman of the Senate Commerce Committee, wants an American fact-finding commission to investigate whether Murdoch's employees hacked into the voicemails of the families of 9/11 victims. He warned of "serious consequences" if Murdoch's journalists did in fact violate the privacy of US citizens.
For the Democrats, the scandal could signify the long-desired weakening of a powerful adversary -- even if it happened at an inopportune moment. Now that President Obama is trying to negotiate a compromise with the Republicans to resolve the current budget crisis, the government's criticism of an old enemy, Murdoch, could also be seen as a declaration of war on the opposition. It is quite possible that US prosecutors will seek to apply anti-corruptions laws, which also cover the payment of bribes outside the United States, to the News of the World scandal.
Merely reporting on politics would probably have bored Murdoch, who wanted his media organizations to reshape politics. For decades, this was made abundantly clear to any American who watched television or read the newspaper.
For Murdoch, good politics meant anything that benefited his empire. Those who shared his goals could count on his support. It could come in financial form, such as the $1 million donation Murdoch made to the Republican Governors Association shortly before last year's midterm elections. Or it could come in the form of a political endorsement, such as when Murdoch's New York Post promoted a then-political nobody, Ed Koch, as candidate for mayor of New York City in 1977 -- because Koch shared Murdoch's virulently anti-union positions.
Murdoch's Fox News became the station of choice for Sarah Palin, the 2008 Republican vice-presidential candidate, a woman as reactionary as she is telegenic. Some of the potential Republican candidates in next year's presidential election are paid commentators at Fox News.
Murdoch's efforts to acquire this much influence in Germany were in vain, despite efforts by some German politicians to curry favor with the media mogul. He paid a visit to the center-left Social Democratic Party in 1998, wearing a red cardigan, to match the party's official color. Gerhard Schröder, the SPD's chancellor candidate at the time, who would go on to serve two terms, predicted a "glowing future" with Murdoch. But as it turned out, everything Murdoch touched in Germany was a failure. In frustration, he sold his shares in private broadcaster Vox to Bertelsmann, and he also parted ways with the now-defunct station tm3, which targeted a female audience.
In 2000, he invested in Premiere, an ailing pay-per-view channel, a majority of which was held at the time by the media entrepreneur Leo Kirch, who died in Munich last Thursday. Premiere plunged Kirch into ruin, and Murdoch dumped €1.7 billion into the venture. He returned years later, and today he owns more than 49 percent of Premiere's successor Sky, which was recently losing €1 million -- a day.
Familiar with Crises
Such setbacks are annoying but tolerable for Murdoch, who has an estimated net worth of $7.6 billion. He and his third wife Wendi Deng, a Chinese-born woman who is 38 years his junior, live in a Fifth Avenue apartment in New York that's worth an estimated $40 million.
He survived a near bankruptcy in the 1990s, and he also repelled a hostile takeover attempt by media entrepreneur John Malone. He also survived prostate cancer 10 years ago. Murdoch is familiar with crises. It is quite possible that his decision not to buy the remaining shares in BSkyB is nothing but a trick, and that he will gear up to buy the station again in a year, perhaps after calm has returned to Great Britain.
It is about time Murdoch relinquished his power to the next generation. But the crown prince, Murdoch's son James, seems poorly suited for the job. He is too deeply mired in the British scandal. He has already admitted that the payments, authorized by him, of hush money to celebrities whose phones were hacked were a mistake. He could be affected if US authorities decide to launch a bribery investigation.
"James is sometimes described as trying to out-Murdoch his father," Murdoch biographer Michael Wolff wrote in an April 2010 blog entry. "That may be too much Murdoch even for Rupert."
'Appetite for Change'
The younger Murdoch was reportedly a rebel in his younger days, dropping out of Harvard and having his body pierced. Later on, when he became the European head of News Corp., he was a colorless man who seemed more like an intern than a top executive.
Even as adults, he and his brother reportedly end their telephone conversations with the old man by saying: "I love you, Dad!" When James Murdoch used the word "fuck" several times in an interview years ago, his mother publicly reprimanded him.
In a conversation with SPIEGEL two years ago, he said: "News Corp. is an enterprise that has a real appetite for change." If that is true, James Murdoch must be feeling sated at the moment.
MARC HUJER, ALEXANDER KÜHN, MARTIN U. MÜLLER AND CARSTEN VOLKERY