Media: The Truth about Rupert and Tony ; Tony Blair Famously Wooed Rupert Murdoch before the 1997 Election. but, as This Exclusive Extract from a Controversial New Book by Neil Chenoweth Shows, There Was a Price to Pay

By Chenoweth, Neil | The Independent (London, England), July 1, 2001 | Go to article overview
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Media: The Truth about Rupert and Tony ; Tony Blair Famously Wooed Rupert Murdoch before the 1997 Election. but, as This Exclusive Extract from a Controversial New Book by Neil Chenoweth Shows, There Was a Price to Pay


Chenoweth, Neil, The Independent (London, England)


In March 1998, three separate disasters had come together to produce a horror month for Rupert Murdoch. The common feature in each of them was the strength of the link that Murdoch had forged with Blair. It was a complex relationship that had been evolving for three years. The key to understanding it is a much more complicated set of relationships between Tony Blair, Rupert Murdoch and the American who had become so influential to both of them, Irwin Stelzer.

Stelzer, who grew up in a poor Jewish neighbourhood in New York, founded a highly successful international consulting firm, National Economic Research Associates. Stelzer lived next door to Murdoch. He was one of Murdoch's most trusted advisers, not merely on economic matters but in Murdoch's broader view of the world. It was said that the two men got on so well together that they once talked about building a tunnel to join their two houses, though their wives were not as enthusiastic.

Friends describe Stelzer as highly likeable, with a formidable intelligence. Stelzer is a phenomenal networker. He has a gift for spotting bright young (or not so young) men and becoming their patron. One effective way to further their careers was to introduce them to his friend Rupert Murdoch. Stelzer became close to Andrew Neil of The Economist in the 1970s. In 1983, he arranged for Neil to meet Murdoch, and recommended that Murdoch make him editor of The Sunday Times.

Of all Irwin Stelzer's bright middle-aged men, his greatest discovery was Tony Blair. Stelzer wrote several columns praising Blair as an up- and-coming star of the future. The casual links deepened after Blair became Labour leader in 1994. Eventually, the two began regular meetings to discuss Labour policy. According to Andrew Neil, Murdoch met Blair for the first time on 15 September 1994 over dinner. In July 1995, Blair flew to Australia to address a News Corporation management conference. There he made it clear that he had dumped Labour's long-standing policy to force News International to reduce its media holdings.

By early 1997, Blair had convinced Murdoch that he would not move against News Corp's interest once he was in power, and that he would hold off from joining the European Monetary Union. On Monday 18 March 1997, the first day of the election campaign, Blair and Major woke up to the realisation that the earth had moved. Murdoch's Sun newspaper, after nearly two decades of backing the Conservative Party, had changed horses.

However, by early 1998 the price for this special relationship was beginning to become apparent. Three separate strands came together for them in February and March of 1998. The first was Murdoch's ongoing quest to swing a deal with Silvio Berlusconi [Murdoch had offered Berlusconi, the then Italian opposition leader, pounds 4bn to take over Berlusconi's Italian television network, Mediaset].

The second strand was the price war that Murdoch's News International newspapers had been waging in Britain since 1993. By late 1997, backbenchers in the new Labour government were concerned enough about the threat that Murdoch's price policy posed to the future of newspapers such as The Independent, to agitate for legal bans on anti-competitive pricing - Murdoch made an appointment to see Tony Blair at Downing Street. In February 1998, Blair drew criticism from Labour ranks by opposing the amendment on predatory pricing, which was passed in the House of Lords. Tony Blair announced that his government would not support the amendment, and it would not be passed in the House of Commons.

There was the third strand in the controversy that engulfed Murdoch in Britain early in 1998. [Murdoch's] HarperCollins had secured a deal to publish a forthcoming book by Chris Patten, the last governor of Hong Kong, for a pounds 125,000 advance. [Murdoch had been trying to get close to the Chinese government and win official approval for his satellite broadcasts.

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Media: The Truth about Rupert and Tony ; Tony Blair Famously Wooed Rupert Murdoch before the 1997 Election. but, as This Exclusive Extract from a Controversial New Book by Neil Chenoweth Shows, There Was a Price to Pay
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