It takes one to know one…

Posted on June 11, 2009
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A colorful, acerbic and entertaining discussion of the business practices of Rupert Murdoch from one time combatant, Conrad Black

(from The Daily Beast)


The developing dispute between Italian prime minister and media owner Silvio Berlusconi and News Corp. Chairman Rupert Murdoch is a brave new frontier for the insatiably expansionist Murdoch. When General de Gaulle was shown the rubble of Stalingrad in a visit to the U.S.S.R. in 1944, he scandalized his Russian hosts by saying “What a great people!” referring to the Germans, “for having reached the Volga.” It is not clear who will win this battle of media giants, but it is a credit to the invader that it is happening at all. Berlusconi could not mount such an offensive against Murdoch in Australia.

Though an affable enough personality, Murdoch is a compulsively aggressive businessman. Like Napoleon, he has no policy except war and no apparently amicable division of a market or enterprise with him is any more than a truce before he launches a new assault. He has made endless friendly arrangements with businessmen and politicians, but except for Ronald Reagan and perhaps Tony Blair, has deserted them all—Margaret Thatcher, John Major, Jimmy Carter, the Clintons, and a lengthy sequence of Australians.

It need hardly be said that Silvio Berlusconi is not a run-of-the-mill political leader. He has enjoyed the greatest electoral success of anyone in Italian history. Mussolini did not conduct serious elections, and the long-serving Christian Democratic leaders Alcide de Gasperi and Giulio Andreotti led fragile coalitions and received a great deal of help and guidance from the popes of the day, as when Pius XII preemptively excommunicated all Italian communist voters just before the 1949 election.

Some patterns of behavior are familiar in these events. Berlusconi assisted Murdoch in assembling a virtual pay-television monopoly in Italy while his company, Mediaset, was the market leader in conventional programming, ahead of the state-owned RAI. Murdoch made a great success of Sky Italia, which now has revenue of $3.2 billion annually, against Mediaset’s $4 billion and RAI’s $2.9 billion.

The relationship started to come unstuck with raids on each other’s leading on-air personalities. As the tocsins sounded, the facts weighed more heavily each week that Berlusconi controls the government and parliament and, effectively, RAI; that Italy is not a puritanical political environment; and that its public opinion is not much stirred by questions of financial and sexual ethics that would topple British or even Australian governments and lead to impeachment proceedings in the U.S.

Berlusconi put through a doubling of the tax on pay-TV operations—i.e., on Murdoch’s company—from 10 percent to 20 percent, a heavy hit below the belt by most Anglo-Saxon standards. He is also taking Mediaset and RAI off Murdoch’s channels. This is hardball, but it is Murdoch’s preferred style, too, and he was aware that they were in the country of Machiavelli and the Borgias, not Bermuda or Switzerland or Denmark.

As is his custom, Murdoch replied with sanctimonious editorials in The Times of London and elsewhere, effectively accusing Berlusconi of being a corrupt aspiring dictator and a sexually depraved rake in constant pursuit of underage women. This played in with Signora Berlusconi’s announcement that she was seeking a divorce from her husband, who “consorts with children.” This operatic couple has had a hilarious series of public disputes with allegations, threats, public apologies from him, and tearful reconciliations for some years.  continue reading

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