Red tops and Reputation – Containing a disaster of biblical proportions
A prodigal son? A sacrificial lamb? Redemption through death? The way we’ve been talking about the News of the World this week, it seems somehow appropriate that it’s a Sunday paper. But this week’s events are no age-old biblical allegory – instead they represent a very modern lesson in the harsh realities of building and protecting corporate reputation. By taking decisive action, the Murdoch clan may well have succeeded in minimizing upward brand contagion from the News of the World to its more substantial corporate parent.
The speed and brutality of the announcement took most commentators by surprise. This is – or was – the world’s largest selling English language paper, with a history going back almost 170 years. The very notion of Britain without The News of the World, whilst not necessarily unpalatable, is certainly unfamiliar. And for this reason, many of us failed to see the closure coming.
Looking back, however, perhaps we should have – the Murdoch team are savvy operators that have learned well from past errors and corporate hesitations.
The enduring fallout from the Hillsborough disaster comes to mind. It took The Sun 15 years to apologise for their mis-reporting of this event – in which they falsely claimed opportunistic Liverpudlians picked the pockets of wounded and dying fans. To this day, sales of the Sun on Merseyside have never recovered – and it would be little surprise if this unsavoury chapter influenced Murdoch’s recent judgement. It’s certainly served well as a salutary reminder of both the pressing need for swift action and British public’s ability to bear a grudge over the long-term.
Perhaps more importantly, at the level of corporate reputation there was a real risk of an errant tail wagging the corporate dog. As brand contagion spread upwards from the News of the World, the really difficult questions were being aimed at News Corporation. And in a very personal sense at the Murdoch clan themselves.
The public demand for politicians to act on this week’s revelations forced them into speaking out against News Corporation in a way that simply hadn’t happened before. And once they’d found their voice it appeared that there was going to be no stopping them. Serious politicians echoed the cries of the public to put a stop to the BSkyB acquisition deal – at least until a comprehensive investigation into the phone-hacking scandal had been concluded.
There were clear indications that the News Corp brand was losing its leverage where it mattered most. Around Westminster there was the tangible sense of a floodgate bursting. A wave of antipathy locked away for years finally finding a vehicle for release. The News of the World scandal gave our politicians and pundits a long-sought permission to declare open season on Rupert Murdoch’s empire. And a corporate brand that once had our policy-makers quaking in their boots found itself firmly on the back foot.
The corporate scandal had to be contained at any cost. Closing a title the size of the News of the World is unimaginable to most of us. But the alternative was much more serious. At a reputational level, News Corp was becoming seriously compromised – and with every day that passed, the leverage that the Murdoch team could command at the top table diminished. A short-term sacrifice became necessary to support long-term ambitions.
The speed with which the reputational damage from the News of the World travelled upwards to engulf its corporate parent presents a salutary warning for us all. It reminds us that today, consumers make little distinction between brands and brand owners. Both are expected to act responsibly – and the actions of one will influence the reputation of the other. Brand owners can distance themselves from their dependents but there is ultimately only one way to fully detach them. And in the short-term that is inevitably very expensive.
So today, while News Corporation’s reputation and share price bounce back from their respective mid-week dips, one of our nation’s longest-standing titles breathes its last breath. The demise of one of this once iconic paper is a true Sunday lesson with a suitably ambiguous moral message lying somewhere between the prodigal son and sacrificial lamb.
And of course, like all the best biblical tales, this one doesn’t stop at death. The News of the World may have met its demise but we can expect to see its re-birth in some format within the not-too-distant future – a new name and a new face to play a familiar role within the Murdoch stable. Nobody would claim this has been News Corp’s finest week – but through decisive action they may well have negotiated the real long-term risks to their reputation and bottom line.
