* Murdoch declares war on "enemies"
* News Corp chief's reaction posted on Twitter
* Denounces critics as "toffs and right wingers"
By Georgina Prodhan
LONDON, March 29 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 claims,
but on Thursday the media empire mounted a concerted fight back
as a corruption scandal that has plagued its UK 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 an upper class "toff" is a damning insult - although he is
now seen by many in Britain as part of the establishment, thanks
to his business interests and ties to politicians.
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 a letter sent to the Australian Financial Review by NDS
on Thursday, the company's executive chairman Abe Peled accused
the newspaper of repeatedly mischaracterising NDS.
"You repeatedly mischaracterise communications about third
party pirate devices to suggest that NDS was responsible for
those devices," Peled wrote.
"You further mischaracterise NDS emails to suggest that NDS
encouraged piracy of competitor systems while ignoring evidence
that NDS was responsible for bringing to justice the sources of
Peled adds that NDS is "a leader in the fight against
piracy" and that the company "has assisted law enforcement
agencies around the globe in bringing to justice many of the
pirates your articles falsely portray as victims".
Richard Levick, a crisis public-relations guru whose clients
have included the Catholic church and some Arab governments,
said he had sympathy for Murdoch although he would have advised
a more measured response.
"We have a saying here: Don't kick a man while he's up -
it's too much work. Rupert Murdoch has been down now for
three-quarters of a year so he's an easy target. People start to
pile on. I sense exhaustion," he told Reuters.
"He's going to back to the old tools here, going on the
attack, going for blustery headlines. It's worked for him for 40
years, so why change now? I understand the natural inclination
to do that and I have some personal sympathy with him."
In the past week, Murdoch's British newspapers, which had
been relatively subdued since the phone-hacking scandal broke
out, have also gone back on the offensive, dominating the
country's political agenda with some bold moves.
The Sunday Times mounted a old-fashioned sting operation in
which reporters posing as international financiers were promised
exclusive access to Prime Minister David Cameron in exchange for
donations of 250,000 pounds ($400,000) a year.
The article led to the immediate resignation of a senior
fundraiser from the ruling Conservative party, forced Cameron to
disclose details of people who dined at his private apartment,
and sparked a discussion about party funding.
Days earlier, the Sun tabloid hijacked the national debate
about the country's 2012 budget by seizing on an obscure tax the
government planned to impose on hot pies, seen as a staple of a
working-class diet, and offering a free pie to every reader.
A week later, Cameron, his finance minister and the
opposition leader were still vying with one another to be seen
as the most avid pie-eater, tucking into pasties, pies and
sausage rolls at every photo opportunity.
The latest allegations bring the crisis closer to Murdoch's
son James, who 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.
The younger Murdoch, who is also chairman and ex-CEO of
BSkyB, 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 that
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 said 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.