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July 13, 2011 | cwinters

Has Rupert Murdoch Raised the Table Stakes for Crisis Response?

Rupert Murdoch has always been a bit of a maverick. And he’s had his share of scandals. And you can’t spend decades in media and publishing, amassing an empire of his size and influence, without also experiencing moments where your hero status (launch of The Daily, anyone?) quickly becomes goat status.

But even I was surprised by the decision to cease publication of the UK’s leading tabloid in the wake of the phone hacking scandal. Since then, some have pointed out that this decision is largely a publicity stunt, because NewsCorp will pick up the readership, and transfer the advertising revenue, to other properties.

But it does beg the question about the table stakes when it comes to a crisis. Those of us in that business often counsel clients that their reputation, and even their business, are at stake when it comes to crises. And we’ve certainly seen companies that never really recovered from a large scale event – ValuJet/AirTran, Lehman Brothers and Exxon, to name a few. But it’s rare to see a company decide to just close its doors in the wake of a scandal.

Does Murdoch’s decision to just close up shop, displacing many innocent employees in the process, create a new world order where the table stakes are even higher in a crisis? Or will the world view this much like the ValuJet changing its name to AirTran scenario?

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