The Hand of the Free Market
by David Atkins (“thereisnospoon”)
Rupert Murdoch looks set to face the music from NewsCorp investors over the phone hacking scandal:
The gathering is expected to be the company’s most contentious in years, with frustrated shareholders taking the microphone to demand accountability after a phone-hacking scandal in Britain that has embarrassed the company.
Investors will also have the chance to vote on the company’s board members, including Mr. Murdoch and his sons, James and Lachlan. While the family’s 40 percent stake virtually guarantees they will be re-elected, the chorus of discontent has put the company in an uncustomary defensive position.
The most forceful, and potentially most ominous protest is likely to come from Tom Watson, the British Labour Party legislator who has led the investigation into phone-hacking at News Corporation’s British newspaper unit. Mr. Watson, who acquired nonvoting proxy shareholder status to attend the meeting, said he planned to accuse the company of engaging in further criminal wrongdoing involving surveillance techniques that extend beyond the phone hacking. He did not discuss potential evidence.
Not that it will really matter, since Rupert still holds all the cards:
Any dissent will largely be symbolic. Mr. Murdoch owns nearly 40 percent of voting shares, and 7 percent belong to Prince Walid bin Talal of Saudi Arabia, who has expressed his support for the board. As many as 30 percent of shareholders are expected to cast votes against Murdoch family members, several analysts estimated. Shareholder activists will dominate the meeting, since large institutional investors do not typically air grievances in such a public forum, analysts said. “There will be a lot of noise, but at the end, not a lot of change,” Mr. Gilmour said.
The invisible hand of the free market will not hold Rupert Murdoch accountable. His shamelessness and ruthlessness in reaching for the lowest common denominator for his media empire means that his businesses will remain mostly profitable no matter how clouded in scandal and deceit they may be. Shareholders won’t hold Mr. Murdoch accountable any more than shareholds held AIG or its executives accountable.
That sort of thing would require the firm hand of government. Which is exactly why men of Rupbert Murdoch’s caliber want to destroy government’s ability to act against them.
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