Articles: Blogs

The News of the World could easily have been saved

Media - 8th July 2011
The News of the World could easily have been saved

Regardless of whether the News of the World is your sort of newspaper, until recent days it has been a highly valuable asset. Add together the paper’s 168-year history, its track record of breaking major stories (particularly through investigative journalism) and its huge success in attracting major advertisers, and you have a something that was surely worth preserving. (Perhaps the most striking fact about the News of the World is that it had a greater number of ABC1 readers than that other Murdoch title, The Sunday Times.) News International’s decision to axe the paper rather than take the steps necessary to redeem it has caught the world on the hop; this was surely part of the Murdoch family’s motivation – the masters of newsprint have indeed, if temporarily, reset the news agenda. However, as a case study in crisis management, the decision seems a disaster.

Killing off a major brand should be absolutely the last resort in a crisis situation. How could it not be, when so much capital has been invested in creating brand equity? Only if a brand is revealed as rotten from top to bottom should such action be contemplated. On all the available evidence, this was not the case with the News of the World. Only a handful of people still associated with the title – ironically, those still in lucrative employment – seem to have had direct involvement with, or to have held responsibility during, the exposed period of phone hacking. News Corporation shareholders will surely be wondering why these people have not been sacrificed, rather than the altogether more valuable News of the World asset of which they are part owners.

Brand redemption is a well-trodden path (ask BP, Toyota, Sony and Perrier), and one that would surely have been available to the News of the World. The starting point has to be contrition and a sincere wish to put right past misdeeds. A necessary component is, typically, change at the top. However, the seeming determination of the Murdoch family to shield those closest to its heart appears to bar this course of action. Killing off the paper is News International/News Corporation’s alternative strategy.

It is hard to conceive of any other major organisation that would pursue and defend this decision as being in the best interests of shareholders. As some commentators have already suggested, the episode perhaps marks the point at which Rupert Murdoch’s era of invincibility came to an end. In a period of rising shareholder activism, it seems highly likely that a day of reckoning awaits the News Corporation board, perhaps at the company’s next annual general meeting.