Rupert Murdoch Turns 81: Looking Back On A Reputation-Shattering Year

Today’s Rupert Murdoch’s birthday, normally a day for reflection. But it’s hard to believe he feels much joy in that exercise as he considers how much his world changed over the last 12 months — and especially since July, when the UK hacking scandal exploded into public view. A year ago Murdoch seemed to be on top of the world, with plans to prepare his children to take charge of a growing global media empire. Now he’s struggling to keep his assets, and legacy, intact. Here are a few of the more important ways Murdoch’s life changed in his first year as an octogenarian.

Family matters: Last March Rupert appointed his son James to be News Corp’s Deputy Chief Operating Officer and Chairman and CEO, International — putting him next in line of succession.  But the scandals dashed those plans. Now James appears to be dead man walking: He recently resigned as chairman of News International, and analysts say there’s little chance that he’ll step up. The Murdoch family is said to blame James for getting them into the mess. The big question now is whether multiple investigations in the UK and the U.S. will deem him to be merely negligent in his handling of the lawbreaking, or criminally culpable.

He wasn’t the only member of the family whose plans were derailed by the scandal: Last year Rupert’s daughter Elisabeth was preparing to join the News Corp board following the company’s acquisition in April of her TV production company, Shine Group. She decided in August to remain off the board.

Business plans: The top item on Rupert’s agenda last year was his effort to buy the 61% stake he didn’t already own in BSkyB, the powerful UK satellite, broadband, and phone provider. Murdoch turned 80 just after the government gave him the all-clear to make that $12B deal. But he had to kiss the BSkyB acquisition goodbye when the scandal broke. Now, UK communications regulator Ofcom is questioning whether Murdoch’s even fit to hold his 39% of the stock, and whether James should remain BSkyB’s chairman.

It’s easy to forget another of Rupert’s pet projects: The Daily — a text, sound, and video magazine designed for iPads and other tablet computers that he had introduced in February. “We believe The Daily will be the model for how stories are told and consumed in this digital age,” Murdoch said. How’s it doing? The Daily says that it’s the top-grossing iPad app. But it’s widely believed that the publication is only attracting about a quarter of the 500,000 weekly readers that Rupert said he’d need to break even. Last month a reporter resigned and publicly objected to the sensational handling of a story about Iranian ninjas.  The Daily reportedly responded with a threat to sue the reporter for violating a non-disparagement contract clause.

Confidants: Murdoch’s inner circle — known as the “praetorian guard” — had already begun to shrink with the departure of close allies including former COO Peter Chernin and former EVP Gary Ginsberg. But the scandal forced him to say goodbye last year to several other longtime advisers including Dow Jones CEO Les Hinton (more than 50 years with Murdoch), General Counsel Lawrence Jacobs (15 years), and News International Chief Rebekah Brooks (23 years).

Reputation: People don’t fear Murdoch as much as they did last year. He lost some of his media clout in the UK when he shuttered News Of The World, the weekly tabloid that was at center of the hacking scandal. (He’s trying to regain it with the new Sunday edition of another tabloid, The Sun.) But he also was forced to apologize — and pay hefty settlements — to dozens of hacking victims including the family of murdered schoolgirl Milly Dowler and actor Jude Law. The most telling scene came last July as Rupert, accompanied by James, had to grovel before Parliament. “This is the most humble day of my career,” the CEO said — shortly before a prankster tried to slap a shaving cream pie in his face.