Did Murdoch Survive a Close Shave in the Hacking Hearings?

He’s still the CEO of News Corp., but Rupert Murdoch came off as a spent mogul during Tuesday’s Parliamentary hearings

Did Rupert Murdoch survive a close shave in Tuesday's hacking hearings?

Maybe, but in testimony before the British Parliament, he came off as a spent mogul.

"He seemed to me to be showing his age," observed Sarah Ellison, author of "War at the Wall Street Journal," a riveting account of Murdoch's takeover of the business newspaper. "It was obvious to everyone — the excruciating pauses. If he gained anything, it was sympathy."

In a nearly three-hour appearance with his son James at a Parliamentary committee hearing into the phone-hacking scandal, Murdoch's responses proved to be revealing of the limited grasp he has over his own organization. 

Also read: When He Was King: My Lunch With Rupert Murdoch

If his testimony is to be believed, News Corp. employees neglected to let on to their boss that they made mammoth financial settlements to victims of News of the World phone hacking — the very misdeeds at the center of the scandal that is now is rocking Murdoch's empire, not to mention the bedrock institutions of British civic life.

Also read: In Testimony, It’s Rupert Murdoch the CEO Dilettante

Of course, a well-known sign of organizational leadership failure is that the employees are loathe to bring unpleasant news to boss' attention.

Weekly or monthly, Murdoch testified, he would phone his top editors at the News of the World and other News Corp. papers to casually inquire about what was happening. Murdoch was asked by one his inquisitors Tuesday whether he was ever told by the editor of News of The World of a million-pound payoff in the phone-hacking scandal.

No, Murdoch answered. His editors, he said, "might say we have a great story exposing X or Y," but said he was never delivered news of any settlements.

Outside of his organization, meanwhile, top British political figures, while eager to court Murdoch's power, were reluctant to be seen associating with him.

Successive prime ministers, for example, required Murdoch to use the backdoor to, in effect, sneak into 10 Downing, the British White House.

Just days after his election in May 2010, Prime Minister David Cameron invited Murdoch to drop by, so the conservative party leader could thank the media mogul over tea for his endorsements.

Why had Murdoch entered through the backdoor, one of his inquisitors wondered?

“I was asked; I just did what I was told,” Murdoch squirmed. 

After briefly speculating — perhaps it was to avoid photographers at the front door? — he declared, “that’s the Prime Minister’s choice. I was asked, would I please come in through the back door.”

It seems that both Murdoch and Cameron were mutually intent on thwarting hard evidence of their cozy arrangement. 

Murdoch volunteered that he’d also frequently visited Gordon Brown, Cameron’s predecessor. “Though the backdoor?” his inquisitor asked. Murdoch replied: “Many times.”

Ironically, the phone-hacking scandal now haunts not only Murdoch, but also Brown and Cameron, though in dramatically different ways.

Brown was a victim when News of the World hacked into his personal records to discover and then report his child’s serious medical condition.

Cameron hired a former editor of the tabloid as his chief communications strategist, despite warnings of the journalist's deep involvement in the phone-hacking scandal. The ties to Murdoch now threaten his government.

But Murdoch's public image is certainly suffering, too.

"The effect has been to puncture the myth of Rupert Murdoch's power," Ellison said. "Much of it came from the fact that people believed he was powerful. That changed. That's definitely changed. He was someone revealed as not being effective and at the top of his game." 

Father and son, indeed, offered a stark tableaux of generational transition, assuming that is, that  the young Murdoch can sanitize the stain left by what many observers regard as his missteps in containing the scandal. 

As News Corp.’s top ranking executive for Europe and Asia, James gained responsibility of the tabloid’s corporate umbrella, News International, after the hacking had largely ended.

While the elder Murdoch often slumped in his seat and mumbled his answers, James at his side was polished and coached to a fare-thee-well.

Whereas Murdoch bluntly referred to the offense that required their presence before Parliament as “phone-hacking,” James more eloquently called it “illegal interception” of voicemail messages.

In the days and hours before the appearance, the inquisition was seen as a big test of the elder Murdoch's remaining viability as a top-echelon CEO.

Investment analysts noted that News Corp.’s value, which has plunged since the scandal explored two weeks ago, would be worth as much as 50 percent more without Murdoch at the helm. But after days of declines, with Murdoch still at the helm, News Corp. stock rebounded 5.5 percent Tuesday as long-term investors raced to acquire the battered shares.

Bloomberg reported that independent directors, in fact, were considering a plan to kick Murdoch upstairs and appoint his longtime executive Chase Carey as a transitional CEO who’d ultimately be succeeded by a Murdoch. The company vociferously denied the report.

Also read: Report: Chase Carey May Replace Rupert Murdoch as News Corp. CEO 

Some family confidantes say Murdoch may now favor his daughter Elisabeth to succeed him.

Whatever the News Corp. board decides, Murdoch survived a close shave today at the hearings — with only the stains of a protester’s shaving-cream pie on his suit jacket and wounded pride on public display.