July 19, 2011 / 11:05 PM / 6 years ago

Murdoch turns to PR elite for crisis control

* News Corp in PR shift after hiring crisis experts

* Adds Sard Verbinnen and The Glover Park Group in U.S.

* Became clear "more needed to be done" in response-source

* First hours of Murdoch testimony called "real bummer"

By Paul Thomasch

NEW YORK, July 19 (Reuters) - As Rupert Murdoch sat through the first hour of questioning by British lawmakers probing News Corp's phone-hacking scandal, it looked like days of work by his team of crisis management advisers would go up in smoke.

They crafted an opening statement for the media mogul that included a killer sound bite -- "This is the most humble day of my life" -- only to have the parliamentary committee deny him the chance to deliver it.

That appeared to shake the 80-year-old Murdoch, who sounded exasperated and looked uncomfortable in the early going on Tuesday, dodging questions and banging his hands on the table he shared with his son James. [ID:nL6E7II2FF]

"That first hour was a real bummer," said one source close to News Corp (NWSA.O). "He looked overprepared by the lawyers. In time, he stepped up into being himself. He pushed back a bit, talked about his ethics."

Murdoch's performance, far from perfect, still probably came as a relief to his public relations advisers, who were charged with finding a strategy to contain a telephone-hacking scandal that has turned into full-blown crisis for News Corp.

The team, which assembled in London late last week, included outside advisers Alex Bigg and James Lundie from Edelman, the world's biggest PR firm, and Steven Rubenstein from Rubenstein Public Relations, a fixture in New York communications with a long history with the Murdochs.

The in-house team was led by Joel Klein, who once headed the U.S. Justice Department's antitrust unit [ID:nN1E76E1OR], and Matthew Anderson, who runs News Corp's strategic affairs.

From that group of advisers came the suggestion late last week that Murdoch sit down with and apologize to the parents of murdered schoolgirl Milly Dowler, whose phone was hacked by his now-shuttered Sunday tabloid, News of the World.

Murdoch also prepared a broader apology to readers that ran in all national British newspapers over the weekend, and then moved to quiet critics by accepting the resignation of trusted employees News International Chief Executive Rebekah Brooks and Dow Jones & Co CEO Les Hinton.

Even within the circle of close advisers, however, few believe Murdoch has found the silver bullet to end the crisis. "This is burning white hot," said the source. "You've got to let it burn for a while."

SLOW RECOVERY

In a sign that News Corp is concerned the crisis could spread to the United States, it hired Sard Verbinnen, based in New York, and The Glover Park Group, based in Washington D.C., to assist in public and government relations.

Rubenstein will also play a key role in the United States. The son of legendary communications veteran Howard Rubenstein has represented Murdoch's New York Post as well as entertainment figures such as David Letterman, who hired him to deal with a scandal over a series of affairs with work colleagues.

"Recovery from a crisis of this magnitude is slow," said Chris Tennyson, co-leader of crisis communications practice at Fleishman-Hillard, which is not involved in the matter.

"Anyone who had bone to pick with Rupert Murdoch is now in the water. It will open a period of intensity -- it will be fierce and furious."

Still, experts say Murdoch appears on better footing after misjudging the depth of public anger over allegations that News of the World journalists hacked into the voicemails of thousands of people, from crime victims to families of soldiers killed in combat.

Among the team of PR aces, a lot of credit is being given to Klein, a former New York City schools chancellor who has been tapped to lead a new management and standards committee at News Corp.

Anderson, too, is getting high marks. A former junior tennis champion, he has been close friends with James Murdoch since they both worked in Asia -- Anderson for the PR firm Ogilvy and Murdoch for BSkyB BSY.L. Murdoch later hired Anderson, a native of San Francisco, to run communications for BSkyB before bringing him onboard News Corp.

James Murdoch is viewed as having carried himself well during the proceeding, outperforming his father and relieving some of the pressure over his future. [ID:nN1E76I17T]

The senior Murdoch gained momentum in the second hour of the hearing -- he did manage to slip in the "humble" quote early on -- offering more forceful answers on his responsibility and the role of his papers in British society.

An unexpected attack by a protester wielding a plate of white foam, who was fought off by Murdoch's wife, Wendi, only served to help his case, PR experts said. It became the leading headline and humanized the billionaire media baron.

"The combination of Rupert Murdoch's age and the custard pie attack will have elicited a tremendous amount of sympathy," said Andrew Hawkins, chairman of Comres, a polling company. "You couldn't make this stuff up. It could have turned the whole situation around for them."

News Corp declined to comment on their communications strategy. (Reporting by Paul Thomasch; Editing Tiffany Wu and Steve Orlofsky)

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