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The News Tip: Hold On To Your Credibility

Oct 16, 2011
Originally published on October 16, 2011 12:52 pm

News Corp.'s Rupert Murdoch is still ducking the fallout from a summer-long scandal with his newspapers on the other side of the pond. The scandal claimed the News of the World tabloid, closed down after outrage over phone hacking by its reporters.

News Corp.'s woes continued this week when Andrew Langhoff, the publisher of the Wall Street Journal Europe, resigned after accusations that the paper was involved in a scheme to inflate its circulation numbers.

In a statement, the WSJE has said its circulation programs were "fully disclosed and certified," and attributed Langhoff's departure to a "perceived breach of editorial integrity." However, the Guardian and the Wall Street Journal have reported that Langhoff promised one of the firms involved in the circulation arrangement favorable coverage in the paper's news section as an inducement to continue participating.

NPR media correspondent David Folkenflik tells Weekend Edition Sunday host Audie Cornish that Langhoff's actions appear to be a shocking, "clear breach of Dow Jones' and the Wall Street Journal's ethics, as well journalistic standards."

But even the circulation arrangement is coming under intense scrutiny, as it is now clear that the paper's circulation levels have been significantly subsidized by the paper.

While Dow Jones, the parent division of the Wall Street Journal, says the circulation arrangement was approved by the company that audits newspaper circulation in Europe, the auditor says it will give a fresh look at how the complicated deal worked.

Folkenflik offers a lesson to learn from all this: As a news organization, it's tough to restore credibility after it's been badly damaged.

News organizations are inherently human endeavors, Folkenflik says, and as such, there will be missteps and challenges to credibility.

"The question for a news organization is not, 'Are you perfect?'" he says. "The question is, 'How do you deal with it?'"

Transparency is key, Folkenflik says. Instead, News Corp. has initially "come out swinging, attacking its critics." Giving the organization the benefit of the doubt has become much tougher in lieu of the number of times the company has had to retreat from those attacks.

How should news organizations respond to allegations against its credibility? Share it with us on Facebook.

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AUDIE CORNISH, HOST:

The Fox News Channel recently celebrated its 15th anniversary. It was a welcomed bit of good news for Rupert Murdoch, the media titan behind its parent company, News Corp. Murdoch is still ducking the fallout from a summer-long scandal with his newspapers on the other side of the pond. First, the News of the World newspaper closed down after outrage over phone hacking by its reporters. Now the top executive of The Wall Street Journal Europe has resigned over accusations that the paper was involved in a scheme to inflate its circulation numbers.

On Sundays, we often check in with NPR's media correspondent David Folkenflik for stories like this and more.

And, David, welcome to the program.

DAVID FOLKENFLIK, BYLINE: Thank you so much, Audie.

CORNISH: So a lot of moving parts to this story. But it sounds like Murdoch and company are probably due for a News Tip.

FOLKENFLIK: I would think so. I think today's News Tip is that it's tough for a news company, a media organization, to restore credibility after it's been pretty badly damaged.

CORNISH: Well, how does this latest scandal about inflating circulation numbers at Wall Street Journal Europe fit in into the kind of summer-long scandals that we've been hearing about?

Well, how does this latest scandal about inflating circulation numbers at Wall Street Journal Europe fit into the kind of summer-long scandals that we've been hearing about?

FOLKENFLIK: Well, it fits in a couple a ways. A key one is this: I mean, the scandal was about the inflation of circulation levels to the point where it's got to be pretty clear now to advertisers that they have been paying for a lot more circulation than they've actually been getting. But the second part of it is that it turns out that the publisher who said he resigned this past week, Andrew Langhoff, had promised one of the firms involved in this kind of three-card Monte arrangement, favorable editorial coverage. That's a no-no, that's a clear breach of Dow Jones and The Wall Street Journal's ethics as well as journalistic standards. And it came as a real shock, I think, to journalists both inside and outside the newsroom of The Wall Street Journal.

CORNISH: At this point, why is this worth watching in the larger media world and for us here in the States?

FOLKENFLIK: Well, this has been a season of woe for News Corp. If you look at the question of its credibility and its integrity, it's come under extreme assault in the last few months. News Corp. was requiring its British arm to shut down one of its top tabloids there, the News of the World, because of its central role in the phone hacking and police corruption scandal there. News Corp. was forced to abandon its plan to take over all of BSkyB, the largest broadcaster in the U.K., and it's lost a number of the top executives, including some of the people closest to Rupert Murdoch. Time and time again after allegation after allegation have proven to have substance to them, the company has been forced to retreat and acknowledge some of its wrongdoing.

CORNISH: Now, I'm even reading that they've been advising the shareholders, some outside advisors, have advised that Rupert Murdoch and his son should be kicked off the board of their own company.

FOLKENFLIK: Given the structure of the company, that seems quite unlikely to happen. There's an annual meeting of shareholders due to take place this coming Friday in Los Angeles, and yet Rupert Murdoch on his own controls roughly 40 percent of the voting shares of News Corp. He has a strong ally in a Saudi prince who controls another 6, 7 percent. So, right there between them they're going to have enough to be able to hold off any strong shareholder challenges. But that said, you know, there does seem to be roiling discontent with the idea of the way in which the company has been managed, even as over time it is indisputable that Rupert Murdoch and his executives have led that company to a lot of financial success. And, you know, their investors are pretty happy to keep supporting that as long as the profits keep coming in.

CORNISH: But, David, all kinds of news organizations suffer challenges to their credibility. I mean, of course, New York Times and Jason Blair and here at NPR. I mean, why is this any different?

FOLKENFLIK: Well, news organizations are inherently human endeavors, right? So, there are going to be missteps and there are going to be challenges to the credibility of news reporting and of corporate actions. The question for news organizations is not are you perfect; the question is how do you deal with it? And a key value these days is transparency - sharing with listeners and viewers and readers what you know. I think in this case you can say in recent months News Corp. has tended to come out swinging, attacking its critics, whether the Guardian and the New York Times particularly in the hacking scandal, or here with the Guardian, once again, in raising questions about this circulation agreement. I think that the problem is so many times News Corp.'s British arm, News International, has been forced to retreat again and again that the credibility, giving the Wall Street Journal Europe and News Corp. the benefit of the doubt in this instance becomes much tougher. So, that leads us once more to today's news tip. And that's for a news organization, it's a lot harder to restore credibility once it's been badly damaged.

CORNISH: NPR's media correspondent David Folkenflik. Thanks so much for speaking with us.

FOLKENFLIK: You bet.

CORNISH: And if you've got a news tip for us, please share. Go to our website, NPR.org/thenewstip - all one word.

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CORNISH: You're listening to WEEKEND EDITION from NPR News. Transcript provided by NPR, Copyright NPR.