Edinburgh TV Fest: Liz Murdoch??? Talks Hacking Fallout, Shine Sale to News Corp.

Elisabeth Murdoch
Gareth Cattermole/Getty Images

UPDATED: Outlining her values, the chairman of production firm Shine criticizes a blind focus on profits and, unlike her father, News Corp. CEO Rupert Murdoch, and brother James, defends the BBC.

EDINBURGH - Elisabeth Murdoch told a big TV industry gathering here what she has learned from the phone-hacking scandal at News Corp. and called the sale of her TV production firm Shine to her father's company last year a controversial but "right" decision.

Speaking at the annual Edinburgh International Television Festival, the daughter of News Corp. CEO Rupert Murdoch and chairman of Shine also outlined some of her goals and values for the first time since rejoining her father's conglomerate via News Corp.'s acquisition of her company last year.

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Murdoch didn't address the planned News Corp. split, but talked about how the TV industry should tackle the shift to digital media, including YouTube's investments in original content, and said the lesson of the unfolding News of the World phone-hacking scandal is that companies need to impart strong ethical values on their employees.

"Obviously, News is also a company that is currently asking itself some very significant and difficult questions about how some behaviors fell so far short of its values," she said. "Personally, I believe one of the biggest lessons of the past year has been the need for any organization to discuss, affirm and institutionalize a rigorous set of values based on an explicit statement of purpose."

Earlier in her speech she also quipped that writing it was "quite a welcome distraction from some of the other nightmares much closer to home."

Overall, Murdoch struck more collaborative tones than her brother and father have struck here in the past, which underlined her reputation for championing creativity and cooperation. "We too often mistake the possibility for collaboration with the threat of competition," she said at one point.

??In the festival's James MacTaggart Memorial Lecture Thursday evening, one of the annual highlights of the industry gathering in the Scottish capital, Murdoch didn't comment on her possible future role at News Corp., where plans had called for her addition to the conglomerate's board last year. Last summer, Murdoch told the News Corp. board that it would be "inappropriate" for her to join it amid criticism of the conglomerate's corporate governance following the phone hacking scandal, which led critics to lash out against the Murdoch family's control over the company.??

Some have suggested she could take a board role or a broader executive post at the entertainment-focused entity that will be created if News Corp. splits its Hollywood-oriented assets from its troubled publishing divisions. She also recently said she would next month give up her CEO role at Shine to focus on the bigger-picture chairman role.??She also didn't discuss her relationship with other members of the Murdoch family. Some have criticized the $663 million deal that News Corp. struck last year to acquire Shine as a family sweetheart deal.

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"Like many of our peers, [Shine was] faced with constant and distracting re-financing hurdles," she said. So she decided to look for a partner that would allow Shine to achieve more than it could alone. "It became clear to me that News Corp. was the best strategic home for us," Murdoch said, while emphasizing that "in many ways it was the very last place I wanted to go" after spending 12 years on her own.

"It believes in taking long-term investments in creative risks," she said about News Corp., citing The Simpsons, Avatar and Glee as examples of big Fox film and TV bets. "In addition, News wanted Shine to provide an alternative world view, an example of innovation from within — that's what's right about it."

And she said that a degree of independence also remains key for U.K. indies, highlighting that Shine maintains its own distribution arm "independent of the U.S. studio model."

Similarly to other News Corp. executives and Murdochs, Liz Murdoch on Thursday called for "the fierce protection of a free press and a light-touch media regulation," even though tabloid scandals and the Leveson Inquiry into media standards may lead people to draw other conclusions due to the "unsettling dearth of integrity across so many of our institutions."

But other comments set her apart from her brother's and father's previously-expressed views.

On the issue of the BBC license fee paid by taxpayers, she defended it after her father and brother had criticized it in the past. "Let me put it on the record that I am a current supporter of the BBC's universal license fee," Murdoch said. "It's what mandates its unique purpose and it continues to act as a strategic catalyst to the creative industries of this great country."

She also expanded on her brother James' comments at the 2009 TV festival that profit was key for entertainment companies to ensure their independence. "James was right that if you remove profit, then independence is massively challenged, but I think that he left something out," she said. "The reason his statement sat so uncomfortably is that profit without purpose is a recipe for disaster." Arguing that a blind focus on profit is the opposite of self-determination and accountability, she added: "Profit must be our servant, not our master."

Murdoch also cited the recent London Olympics as an example of the benefits of working together.

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"We have seen the proof that collaboration and competition can co-exist and that we can be an extremely diverse community united in purpose, capable of inspiring a generation," Murdoch said. "In the same way that Team Great Britain, from Danny Boyle to Sebastian Coe and from the volunteers to our athletes, have changed how we feel as a nation, I want to suggest that we can — and must — change the way we see ourselves as an industry over the next few years. If we embrace the mindset of the Olympians...we too can be champions in this digital age."

She said ignoring digital opportunities and a new digital generation comes "at our peril," suggesting that the music business wouldn't have been weakened as much in recent years "if the record labels had remembered that their business was to connect people to music — not simply sell them CDs."

Her suggestion for the TV industry: "Let's not be like the broadcast networks in the United States and come late again to the party that other people are having with our audience. Like All3Media or Fremantle [on YouTube channels], we must all be creating direct-to-audience channels using the platforms, developing networks, gaining the experience and learning the skills of audience development." After all, "we all know that the traditional eyeballs-based advertiser model is ultimately not sustainable," she added.

Murdoch again lauded the BBC. "At the moment, the BBC seems to be the furthest ahead in understanding that our new world demands new eco-systems," she said.

Murdoch also asked organizers why they have not invited a woman to give the event's keynote in 17 years. "Just how much did Jane Street Porter upset the committee?" she asked in reference to the last female speaker at the event. Murdoch also joked that it wasn't easy to decide what to wear for the speech. She showed up on stage in a simple black dress and black ballerinas.

She expressed hope that she could "at the very least put to rest your fear of women" and quipped that the speaker booking committee seemed to like her family. "By god, you do love a Murdoch," she said.

??The MacTaggart lecture is always highly anticipated as it is typically delivered by high-profile industry executives, and not even organizers know the content of the speech ahead of time.?? Murdoch son and News Corp. deputy COO James Murdoch, then CEO, Europe and Asia and News Corp.'s top representative at BSkyB, caused some strong reactions when he delivered the lecture in 2009 and attacked U.K. media regulator Ofcom and the BBC.  ??

Rupert Murdoch himself also gave the MacTaggart presentation in 1989. Back then, he struck similar tones as his son in talking about the launch of BSkyB and the broader industry, but Liz Murdoch quoted lines from his speech that said "the freeing of broadcasting in this country is very much a part of this democratic revolution" and meant "freeing it from the bureaucrats of television and placing it in the hands of those who should control it - the people." Said Liz Murdoch: "I am still wholly inspired by those words, and they are still deeply relevant today."

Murdoch on Thursday didn't address Labour Party deputy leader Harriet Harman's call for stricter limits on media ownership and power, which was seen as targeted at News Corp. She called on other British parties to discuss new media ownership rules, saying it was time “to deal with the issue of the invincibility of the Murdoch media empire."

She drew laughs with several parts of her speech. In a line that got many laughs, she said: "Yes, you have met some of my family before." The audience also reacted with laughter when she mentioned how she decided to sell Shine to News Corp. "after various considerations" and added: "Now, I can almost hear you thinking 'No Shit Sherlock'."

Murdoch also shared some of her early TV interests. "As a young girl in New York, a British immigrant aged five, I was obsessed by everything American," including I Love Lucy, The Brady Bunch and The Waltons, among others, she said. Later, she liked Welcome Back Kotter, All In the Family and MASH, among others. The launches of MTV and CNN also drew her to the TV screen, she explained.

"I was determined to jump in and start making television that changed the world," Murdoch said. "The reality of course was not quite as grand."

She also recounted her first attempt at producing a weekly slot on the local access cable channel in Poughkeepsie, New York for a round-up of her college news. "To keep costs down, I even persuaded my 14 year old brother James to design the logo for free," Murdoch said.

?Last year, Google chairman Eric Schmidt gave the MacTaggart Lecture, and in 2010, outgoing BBC director general Mark Thompson delivered it. ??

Email: Georg.Szalai@thr.com

?Twitter: @georgszalai