Rupert Murdoch Fights Back Against 'Lies And Libels,' Declares War

Murdoch Declares War On 'Enemies'

By Georgina Prodhan

LONDON, March 29 (Reuters) - An angry Rupert Murdoch on Thursday declared war against "enemies" who have accused his pay-TV operation of sabotaging its rivals, denouncing them as "toffs and right wingers" stuck in the last century.

Separate reports by the British Broadcasting Corporation and the Australian Financial Review newspaper this week said that News Corp's pay-TV smartcard security unit, NDS, had promoted piracy attacks on rivals, including in the United States.

NDS and News Corp had already denied the allegations, but on Thursday the media conglomerate mounted a concerted fight back as a corruption scandal that has plagued its British newspapers began to encroach on its far more lucrative pay-TV business.

"Seems every competitor and enemy piling on with lies and libels. So bad, easy to hit back hard, which preparing," News Corp Chief Executive Murdoch, 81, tweeted.

News Corp, whose global media interests stretch from movies to newspapers that can make or break political careers, has endured an onslaught of negative press since a phone-hacking scandal at its News of the World tabloid blew up last year.

At its height last July, Murdoch told British parliamentarians: "This is the humblest day of my life," after meeting the family of a murdered schoolgirl whose phone News of the World journalists had hacked.

On Thursday, it appeared that Murdoch had had enough of apologising. "Enemies many different agendas, but worst old toffs and right wingers who still want last century's status quo with their monopolies," he tweeted.

For an avowed republican such as Murdoch, describing someone as a rich and upper class "toff" is a damning insult.

The BBC has a long history of ideological clashes with BSkyB, which is 39 percent owned by News Corp, and both Rupert and his son James Murdoch have publicly attacked the British public service broadcaster over the years.

The Australian Financial Review is owned by Fairfax Media , the main rival to Murdoch's News Ltd newspaper group in Australia.


James Murdoch sits on the board of NDS, which News Corp and co-owner private equity firm Permira agreed to sell for $5 billion to Cisco this month. He is also non-executive chairman and former CEO of BSkyB.

The younger Murdoch has been criticised for not uncovering the scale of phone-hacking at the News of the World, though he had not yet joined the UK newspaper operation when the hacking took place.

He has since moved to New York after being promoted within News Corp to deputy chief operating officer, and has severed all ties with the British newspapers. His focus is now the company's international pay-TV operations, where he made his career.

Chase Carey, News Corp's COO and James Murdoch's immediate boss, issued a statement late on Wednesday in which he condemned both the BBC Panorama documentary and other media worldwide who had reported its claims.

"The BBC's Panorama program was a gross misrepresentation of NDS's role as a high quality and leading provider of technology and services to the pay-TV industry, as are many of the other press accounts that have piled on - if not exaggerated - the BBC's inaccurate claims," he wrote.

NDS has complained that it was not asked for its side of the story before Monday's Panorama, which claimed NDS had leaked secret codes that allowed rampant pirating of BSkyB rival ITV Digital, which went bust in 2002.

On Thursday, NDS's Executive Chairman Abe Peled published a detailed letter to Panorama accusing the documentary of using manipulated emails to support its allegations, and demanding that the programme retract the claims.

The BBC said: "We stand by the Panorama investigation. We have received NDS's correspondence and are aware of News Corp's rejection of Panorama's revelations. However, the emails shown in the programme were not manipulated, as NDS claims, and nothing in the correspondence undermines the evidence presented in the programme."

Also this week, the Australian Financial Review published a story claiming that NDS had allowed piracy to thrive at its client U.S. satellite broadcaster DirecTV, which Murdoch had ambitions to buy, even though it had a fix.

It reported that NDS ran a secret unit in the mid-1990s to sabotage its competitors. The stories were the result of a four-year investigation by investigative reporter Neil Chenoweth, who has written two books about Murdoch.

The AFR's Editor-in-Chief Michael Stutchbury told Reuters on Thursday: "We fully stand by our reports in the paper and by Neil Chenoweth's extraordinary investigation."

"We are not motivated in any way by any desire to damage any financial rival to the company that runs the Financial Review. We are simply following the story and publishing what we have uncovered," he said.

None of the evidence presented by Panorama and the AFR this week suggests that the Murdochs or any other News Corp executives were aware at the alleged practices at NDS.

NDS has won several court cases brought by rivals accusing it of promoting piracy, while others have been dropped - in one case because News Corp bought a subsidiary from the rival, Vivendi, which at the time was struggling with debt.

News Corp made $3.8 billion in revenues and $232 million in operating profit from satellite TV in its last fiscal year. It does not detail financial results for its newspapers but its UK titles bring in less than 3 percent of group profit.

Before You Go

Phone Hacking/Bribery Scandal Timeline

Phone Hacking/Bribery Scandal Timeline

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