In what is perhaps the most important sentence in his essay, Robert Manne writes, “With regard to the problem of the Australian, I can think only of one possible solution: courageous external and internal criticism.” He has given us that. And I am grateful for it.

Though I don’t live in Australia, and do not have the same stake in its public culture, I am grateful to Manne because the worldwide Murdoch empire cries out for learned criticism. I don’t think we understand it very well. In my contribution to this forum, I want to sketch a brief theory of News Corp., which will assist in interpreting Manne’s exemplary work. 

News Corp. is a huge company, but it is not a normal company. However, it does not know that it’s not a normal company. In fact, it denies this observation. In this sense denial is constitutive of the company and its culture. To work there, you have to share in this pervasive atmosphere of denial. And that’s how many of the things Manne details so well can happen.

For example: the Australian is a force for climate change denialism. But it does not know this about itself. Outsiders do know it, and they regularly point it out. The Australian reacts not by defending its actual stance on climate change but by trying to destroy those who accurately perceive it. The attempt at destruction is typically rhetorical but sometimes other methods are used, like threatening a lawsuit. The impression given is of a bully or thug. But that’s really an after-effect of denial. Denial, I think, is the key to understanding the company.

News Corp., as I said, is not a normal company. One thing this means was pointed out by Fortune magazine columnist Geoff Colvin:

Some people aren’t at all surprised by the unending scandal at Rupert Murdoch’s News Corp. They are the investors, insurers, lawyers, and others who had read the “Governance Analysis” report on the company from The Corporate Library, a research firm. The firm grades companies’ governance from A to F, and for the past six years News Corp. has received an F – “only because there is no lower grade,” says Nell Minow, who co-founded The Corporate Library in 1999 on the premise that governance “can be rated like bonds, from triple-A to junk.” News Corp.’s overall risk, says the prophetic report: “very high.” Risk of class-action securities litigation: “very high.” Scandal-related lawsuits are already piling up.¹

Why does this matter to the story Manne has to tell? Colvin tells us:

The effects are insidious and more far reaching than you might imagine. “It creates a culture with no accountability,” says Charles Elson, director of the University of Delaware’s John L. Weinberg Center for Corporate Governance. In companies where directors are genuinely subject to the shareholders’ will, CEOs get fired; BP’s board fired Tony Hayward last year, for example, and Hewlett-Packard’s board fired Mark Hurd. The message cascades down through the organization: Bad behavior gets you fired here. But at companies where the CEO can fire the board, a different message cascades down: We don’t answer to the shareholders, we answer to just one person. It’s the rule of man, not the rule of law.

In other words, Chris Mitchell, editor of the Australian, is in every way a creature of News Corp. He has within him its DNA. Case in point, ably discussed by Manne: it is simply unimaginable that a top editor at a major American newspaper could threaten a journalism lecturer with a lawsuit for accurately reporting the contents of a speech in a public forum, simply because the speech reflected poorly on the editor’s judgment. The contradiction between personal vanity and the professional imperative to defend honest reporting would be too great to sustain. But not within News Corp. Mitchell knew his threat against journalism educator Julie Posetti would appeal to Murdoch’s self-image as a brawler, and that’s all that counts.

Watching this action from afar (Posetti is a friend of mine), I found it especially appalling to observe how rank-and-file journalists at the Australian fell in line behind Mitchell’s action, lashing out at critics when the reality was that the threatened lawsuit humiliated them, because it demonstrated publicly what I just said: personal vanity can trump an editor’s professional imperative to defend the work of honest reporting. The more trouble plaintiffs can make for journalists who are just trying to report what happened, the weaker the press in any country. Everyone who works in a professional newsroom knows this. But denial came easily to the staff of the Australian, because it is part of the atmosphere they breathe. 

The American journalist Carl Bernstein remarks on how an atmosphere like that is created:

As anyone in the business will tell you, the standards and culture of a journalistic institution are set from the top down, by its owner, publisher, and top editors. Reporters and editors do not routinely break the law, bribe policemen, wiretap, and generally conduct themselves like thugs unless it is a matter of recognized and understood policy. Private detectives and phone hackers do not become the primary sources of a newspaper’s information without the tacit knowledge and approval of the people at the top, all the more so in the case of newspapers owned by Rupert Murdoch, according to those who know him best.

As one of his former top executives – once a close aide – told me, “This scandal and all its implications could not have happened anywhere else. Only in Murdoch’s orbit. The hacking at News of the World was done on an industrial scale. More than anyone, Murdoch invented and established this culture in the newsroom, where you do whatever it takes to get the story, take no prisoners, destroy the competition, and the end will justify the means.²

The Australian conducts itself like a thug, in all the ways Robert Manne shows us, because it understands that this is News Corp. policy. But the policy isn’t a formal one; that’s for fools, which is why News Corp. gets an F in corporate governance. Rather, thuggishness is part of the culture of the company. Let me give you another example, a moment when Rupert Murdoch himself humiliated the newspaper he is proudest to own: the Wall Street Journal. During the worst days of the phone hacking revelations in the summer of 2011, Murdoch rang up a reporter working on a story about the company and boasted about its performance. News Corp. has handled the crisis “extremely well in every way possible,” he said, making just “minor mistakes.”³

This was ludicrous, the type of claim that a seasoned Wall Street Journal reporter couldn’t possibly accept with a straight face. In fact, events made an absolute mockery of it. The next day the executive in charge (Rebekah Brooks) resigned. Two days later Brooks was arrested. I guess she hadn’t handled the crisis “extremely well in every way possible.” Then Les Hinton, Murdoch’s closest aide, resigned in hopes of reversing the tide of defeats. Your top executives don’t quit for what Murdoch called “minor mistakes,” and yet his transparently dishonest statement ran unchallenged in the Wall Street Journal. The boss was in denial. The reporter who interviewed him and the editors who approved the story knew their role: to keep the culture of denial going. 

Here, then, is my brief theory of News Corp., taken from the essay on this topic that I published in the Guardian during the most intense period of revelations in the phone hacking scandal that is still underway in the United Kingdom.⁴

News Corp. is not a news company at all but a global media empire that employs its newspapers – and in the United States, Fox News – as a lobbying arm and intimidation machine. The logic of holding these “press” properties is to wield influence on behalf of the (much bigger and more profitable) media business and also to satisfy Murdoch’s own power urges or, in the case of Australia, his patrimonial legends.

But this fact, which is fairly obvious to outside observers like Manne, is actually concealed from the company by its own culture. This, then, is the source of the river of denial that runs through News Corp. Fox News and newspapers like the Australian are understood by most who work there as “normal” news organisations. But they are not. What makes them different is not that they have a more conservative take on the world – that’s the fiction in which opponents and supporters join – but rather: news is not their first business. Wielding influence and intimidating people is. Scaring politicians into going along. Building up an atmosphere of fear and paranoia, which then admits Rupert in through the back door of 10 Downing Street.

But none of these facts can be admitted into company psychology, because the flag that its news properties fly, the legend on the licence, doesn’t say “lobbying arm of the Murdoch empire” or “influence machine.” It says “First Amendment” or “journalism” or “public service” or “news and information.” In this sense the company is built on a lie, but a necessary lie to preserve certain fictions that matter to Murdoch and his heirs.

Strangely, I do not think that News Corp. people like Rebekah Brooks, James Murdoch and Chris Mitchell are being insincere when they pledge allegiance to the values of serious journalism. On the contrary, they believe that this is what their newspapers are all about. And this is the sense in which denial is constitutive of the company, a built-in feature that cannot be acknowledged by any of the major players because self-annihilation would be the result.

Robert Manne is right that the only defensible reply to the problem of the Australian is vigorous criticism. Action by government would damage the principle of a free press. What I am trying to point out is that such criticism not only has to point out bad behaviour and irrationalism. It also has to somehow surmount the culture of denial that has helped to create the Australian. A culture of denial would be a troublesome beast in any company. In a newspaper it is menacing, and this is why the Australian is such a menace.

Jay Rosen has been part of the journalism faculty at New York University since 1986, serving as department chair from 1999 to 2005. His blog on journalism, PressThink, has been running since 2003.

1 Geoff Colvin, “The trembling at News Corp. has only begun,” CNN Money, 19 July 2011, http://management.fortune.cnn.com/2011/07/19/the-trembling-at-news-corp-has-only-begun.

2 Carl Bernstein, “Murdoch’s Watergate?” Newsweek, 9 July 2011, http://www.thedailybeast.com/newsweek/2011/07/10/murdoch-s-watergate.html.

3 Bruce Orwell, “In interview, Murdoch defends News Corp.,” The Wall Street Journal, 14 July 2011, http://online.wsj.com/article/SB10001424052702304521304576446261304709284.html.

4 Jay Rosen, “Phone hacking crisis shows News Corp. is no ordinary news company,” The Guardian, 19 July 2011, http://www.guardian.co.uk/commentisfree/cifamerica/2011/jul/19/rupert-murdoch-phone-hacking.