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In this episode of Down to Business English we look at the scandal exploding in the U.K. around Rupert Murdoch and his media empire. Who exactly is Rupert Murdoch? What is the scandal about? Who is involved? Is this the beginning of the end for one of the world’s most powerful corporations? All of these questions and more in Rupert Murdoch: the scandal of a media empire.

This is Skip Montreux in Tokyo Japan and you are listening to Down to Business English.

Welcome back everyone. Once again I am manning the fort alone today as Dez is still away on his holidays. But I don’t want you to think that he is just sitting around all day, drinking cocktails and sunning himself on a UK beach. No, even though he is away from his microphone, Dez is still working hard on D2B. In fact, today’s report was researched and written by Dez himself as this particular story is unfolding in the UK where he currently is vacationing. He was kind enough to send it in for me to record and post.

I am a bit concerned however. As a Canadian, Dez’s British English is at times at bit strange for me. But in the spirit of bringing you the news I will certainly give it a…go….? Give it a go? Hmm this might be a little tougher than I thought. In the spirit of bringing you the news I will certainly give it a shot.

The big business / political story making headlines, not only in the UK but in the rest of the world too, is the phone hacking scandal surrounding the media empire News Corp. and its owner Rupert Murdoch. To date the scandal has forced Murdoch to close his premier newspaper in England, The News of the World, and to give up his planned takeover of the of the TV company BSkyB, otherwise known as British Sky Broadcasting. This story is rapidly changing day by day so let’s do it, let’s get D2B…Down to Business with Rupert Murdoch: the scandal of a media empire.

Before we get into the details of the scandal itself, let’s take a close look at The News of the World and Rupert Murdoch’s background.

As you may or may not know, the most popular newspaper in the United Kingdom is The Sun. However, The Sun does not come out with an issue on Sundays whereas The News of the World does. Since the two papers are produced by the same publisher, that makes The News of the World the de facto Sun on Sundays. The company that produces both papers is News International, owned by the one and only Mr. Rupert Murdoch. News International also publishes The Times, the most popular broadsheet, or more serious newspaper.

Rupert Murdoch was born in Melbourne in 1931. His father, Sir Keith Murdoch was already a flourishing newspaper publisher owning papers in Melbourne and Adelaide. When at the age of 22 his father died, Rupert was forced to give up his studies at Oxford and take over the family business. As you can probably gather he has done rather well at it, taking over a raft of papers in Australia, the UK and the U.S., including The New York Post and The Wall Street Journal.

Murdoch didn’t stop at printed media either. In the 1980s he started to move into TV and films. In 1985 Murdoch purchased the 20th Century Fox film company and went on to use the Fox name when he established The Fox TV network a year later. In 1990 he merged his own Sky Broadcasting company in the UK with the British Satellite Broadcasting company to form the BSkyB Company which features so heavily in our story. Later in the 1990s Murdoch seeing the opportunity for expansion into Asia, acquired the Star TV Company in 1993. All of this culminated in Murdoch being named the 13th most influential person in the world in 2010 by Forbes magazine.

Now you might be wondering why Mr. Murdoch expanded into Television just about everywhere except for in his native country of Australia. In Australia there is an anti-monopoly law that prohibits any one company delivering the news across different media. Therefore as Murdoch owns some of the biggest newspapers in Australia he is prohibited from owning TV stations as well. The United States has similar laws that apply to foreigners but Murdoch was able to move around those laws by becoming an American citizen in 1985. In the UK, although they don’t have such a blanket ban on cross media holdings, for Murdoch to take a majority share holding in BSkyB, the acquisition would require a debate and formal permission given by the British Parliament. Currently, Murdoch owns 39% of the outstanding shares in BSkyB and he was planning to increase his share holding to a majority share. That was until last week anyway. Due to the escalating scandal he has had to give up his bid for BSkyB.

Another question that may be crossing your mind might be why is Murdoch so keen to get a controlling stake in the satellite TV company? In one word–profit. BSkyB made £1 billion in revenue last year while at the same time profits in print media have been steadily falling. I know that I get most of my news from the Internet nowadays and so do most of my friends. I can’t remember when I actually last bought a physical newspaper. But like most people, I still watch TV or at least watch TV channels on the Internet all of which is good for advertising revenue.

So that was some of the background on Rupert Murdoch and his company and the business situation surrounding these developments. Now let’s take a look at the the scandal itself.

The scandal has been brewing for quite some time. In fact, allegations of phone hacking were first reported in the left leaning Guardian newspaper back in 2009. Many high profile politicians, celebrities and royal family members have also long suspected that their phones were being monitored. However, the scandal came to a tipping point when it was learned that reporters from the News of the World had hacked into the voicemail messages of a murdered school girl. The effect of this invasion of privacy on her grieving parents really angered most people and public opinion began to turn against the paper. The scandal deepened when it was revealed that the paper had paid money for the private numbers of the British Royal Family and had also hacked into the phone of former Prime Minister Gordon Brown to write an exclusive story on the illness that Brown’s son had been born with. It also came to light that News of the World reporters were paying police officers of Scotland Yard and the London City Police for information. The newspaper even had high level connections in government. In an attempt to calm public anger and gain control of the situation Murdoch decided to close The News of the World, Britain’s oldest newspaper. There have also been many resignations including the Chief editor for the paper, Rebecca Brookes, Sir Paul Stephanson of the London Police, and his right hand man John Yates. Prime Minister Campbell has been grilled in Parliament by members of the opposition demanding he apologize and explain his governments close ties to the Murdoch organization. And as I mentioned before, Murdoch has dropped his bid to buy more of BSkyB TV as getting Parliamentary permission at this point seems all but impossible. Murdoch and his son James have even appeared in front of a House of Commons committee investigating the scandal to answer questions under oath. Based on that testimony, some analysts are saying that Murdoch may be able to survive this scandal. But others disagree as authorities in the United States are looking into whether or not similar illegal activity has happened in Murdoch’s media outlets in America. This story is far from over and the ending is impossible to predict. However, we can safely say that we may be witnessing the beginning of the end for one of the most powerful and wealthiest international corporations in history.

But now it is time to get D2V… Down to Vocabulary.

First up I have the Latin expression de facto which is most often used in English as an adjective to describe something that is considered a fact or accepted as reality. In the story I say that many people consider the Sunday edition of The News of the World to be the de facto Sun as that newspaper doesn’t publish on Sundays. A further example that happens in the business world quite often is when a member of staff has taken on the responsibilities of a certain position, but does not in fact have the official job title. Listen to this example: while the CEO was in hospital after his heart attack, one of the Board of Directors filled in as the de facto CEO.

Next up I have the word flourish, which means to be successful or to be doing well at something. In the story I spoke about Sir Keith Murdoch’s very successful or flourishing newspaper business. In that instance flourish was used as an adjective. It can also be used as a verb. Caterpillar, the US company that makes farm and heavy equipment has been flourishing recently. With the recent surge in crop prices, farmers have been investing in new vehicles.

Now is the business term anti-monopoly. Let me break that down a bit. The prefix anti means to be against or to oppose something. Monopoly means to have the exclusive control of a market or commodity. An example would be China’s monopoly of rare earth minerals as they control 97% of the world market. These minerals are used in a wide variety of high tech products and China’s monopoly has left other countries, especially Japan, very concerned. In the story I talked about the anti-monopoly laws, or laws to protect against monopolies in Australia. These laws prohibit one company from controlling the spread of the news. Another example would be how the EU took Microsoft to court with the charges that they were breaking European anti-monopoly laws. The government won and Microsoft was forced to change their business practices.

Moving on to another common expression in business-–a blanket ban. Let me break that down a bit. Just as actual blankets are used to cover something, the idiomatic meaning of blanket is to cover a wide range of something. To ban something means to prohibit it. So, when a wide range of goods or activities have been prohibited by the government, it can be said that they are under a blanket ban. In the story I reported that the UK, unlike Australia, did not have a blanket ban on different types of media having the same owner. Another usage of blanket in a business phrase would be a blanket proposal. A blanket proposal is one that sets out a wide range of conditions covering many issues.

Next is a very important noun in today’s story-scandal. A Scandal is a terrible or disgraceful activity or action. In the report I talked about the multiple scandals that The News of the World is facing. There are so many other examples of scandals to choose from but to choose just one I will talk about the most famous example of a scandal. I wonder if you can guess which one I am going to choose? Yes,that’s right, the Monica Lewinsky and Bill Clinton sex scandal. This scandal was a real scandal because Clinton was both married and of course a famous politician and it almost ended his political career.

Another important word from today’s report is the noun allegation. An allegation is a claim of illegal activity that one party or person makes against another. It is important to understand that an allegation is only a claim, it is not proof. So far there have only been allegations made against The News of the World. The investigation is not finished and the evidence has not been examined. Only until those steps are taken can it be decided if criminal charges will be filed. Recently, a senior member of FIFA was banned from soccer for life because allegations that he had taken bribes from groups wanting special treatment turned out to be true.

Finally today, I have the passive verb to be grilled. Literally, to grill something refers to a style of cooking over a hot, open fire. Idiomatically to grill means to be asked many strong and angry questions and have to defend yourself. In the story I talked about how Prime Minister Campbell was grilled by opposition members of parliament. They asked him many very strong, and very angry questions. It is quite an amazing scene actually and I will put a link in the show notes for you to check out.

And that is D2V today. I highly recommend going back, listening to the report again, and focusing on these words and phrases as they are used in the story.

Well that brings us to the end of another episode of Down to Business English. Be sure to visit our website to download the free audio script for today’s episode. While you are there, please sign up for the Down to Business English newsletter. The newsletter contains updates to the stories we cover here on D2B, links to interesting videos, as well as a study tip or two. Our website address is www.downtobusinessenglish.com.

If you have any comment or opinion on today’s story, or a suggestion for a show topic, Dez & I would love to hear from you. There are several ways you can get in touch.

You can email us at downtobusinessenglish@gmail.com . Or visit the Down to Business English Facebook Page, click the Like Button, and post something on the Page wall. Or, if you are on Twitter, you can Direct Message either Dez or I. You can find Dez at twitter.com/dezmorgan, that’s with a ‘z’. And you can find me at twitter.com/skipmontreux. Now, I can’t speak for Dez but I most certainly will follow you back.

We look forward to hearing from you. Take care  everyone. See you next time.