MCC314
Global Media Industries
Session 10 Lecture
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Murdoch is a bizzare character ; known for “tits and
bums” - notorious headlines on his papers
“ Up Yours Delors”, “ Headless body at Topless Bars”,
tabloid scoops on Prince Harry, Amy Winehouse, Kate
Moss, page 4 girls
Nevertheless has ear of presidents and prime
ministers around the world
Has a chair in Language & Communications School at
Oxford University
Prompts great admiration or hatred for what he has
done for journalism
“Mr. Murdoch’s
record speaks for
itself…”
- John Hewson
How can the
most influential
Australian of all
time be an
American?!$%
…the most
original
business figure
Australia has
produced…”
- Les Carlton,
Melbourne Herald
“The most influential Australian of all
time…”
-The Bulletin, 2006
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Considered the most original business figure
Australia ever produced
Genius for creating NewsCorp at present form
and ability to arise from financial difficulty
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In OZ, 60% of all dailies;
◦ The Australian, The Daily Telegraph, The Herald
Sun, The Courier Mail, The Sunday Times
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In UK
◦ The Times, The Sun (largest English-language daily
in the world), News of the World (largest Sunday
paper in the world)
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In US
◦ The New York Post
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Fox Network
◦ 33 TV stations in US
◦ Fox Broadcasting Company – produces The
Simpson, The Practice
◦ Fox Cable
 Fox News Channel
 Fox Sports
 NatGeo Channel
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20th Century Fox – produced Moulin
Rouge, Avatar
Fox Video – distributes products to the
Far East
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Successfully purchased Dow Jones
(publisher of Wall Street Journal) on 1
August 2007
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Direct Broadcasting Satellite
◦ BSkyB (Britain, Europe)
◦ Stream (Italy)
◦ Star TV (HK, China, India, and other Asian countries)
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25% stake in Foxtel together with Telstra and
Packer’s Publishing and Broadcasting Ltd.
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HarperCollins
◦ 2nd largest English-language book publisher
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TV Guide (US)
◦ Largest circulation of consumer TV magazine
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MySpace
AmericanIdol.com
New York Knicks (40%)
NY Rangers
Madison Square Garden
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In 2004, earned Aus$2.75B
Also the end of NewsCorp in Adelaide
2006, NewsCorp listed on the NYSE
Based almost entirely in NY
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Reason:
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◦ Better access to capital and investors in the world’s
financial markets;
◦ Demonstrating acute awareness of conglomeration
and fundamental business of the media as a profit
machine
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1952 – Rupert took charge of News Ltd in
Adelaide after death of father
1960 – extended to Sydney by buying The
Daily Mirror
1964 – started the only national daily, The
Australian
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1969 – bought News of the World and The
Sun (UK)
◦ Successful with huge cash flow from international
stage
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1970 – bought San Antonio Express, The
Chicago Sun and New York Post
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1970 – 1980 – Diversified entrepreneurship
◦ 50% of Ansett Airlines (now defunct)
◦ Purchased Channel 10 in Sydney and approached
satellite TV operations in UK and US
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1985 – bought 20th Century Fox & 6 TV
stations from Metromedia
◦ Made part of the Fox Network (major TV network in
the US alongside ABC,CBS and NBC
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1990 – invested on satellite TV in UK (BSkyB)
◦ ‘colossal investments in unproven high-risk
satellite-based new media ventures’ Barn, 2000)
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Invested on Star TV
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Japan
HK
Asia
Australia
Other parts of Asia
“Rupert is a strange combination of
opportunist and long-range visionary, and
they don’t really go together, I think. . . He’s
always had the long-range vision of a global
media company with worldwide reach that
could make money and affect events. Within
that very, very broad framework, when
opportunities come up, he grabs them”
- Brill’s Content, 2001
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Driven by his character and personality
Often engaged in high-risk strategy,
purchased newspapers no one touches
Almost lost News Corp early 90s but
managed to survive with satellite TV
investments
Key elements behind logic of acquisitions is
high level of integration
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INTEGRATION
◦ The ability to produce a mix of companies and
businesses that integrate into a well-functioning
whole
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Three types of integration:
◦ Vertical integration
◦ Horizontal integration
◦ Conglomerate integration
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Owning companies at different stages of the
production of given product
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E.g, a company owns a chain of three
companies of different roles: newspaper mill;
newspaper distributor; news agency
Profit at each level eventually allows parent
company to reap revenue
Each company also receives individual priority
treatment/ operates with cost consideration
to survive
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Owning more than one producer at a given
stage of the production process.
◦ Effective for advertisement
◦ Using fully the resources (printing presses)
◦ E.g, running morning and evening paper allows
printing press to work throughout the day
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Ownership of non-related companies
◦ Alan Bond’s ownership of TV network (Nine TV) as
well as brewing, mining, education, tourism
◦ AirAsia – tourism, telecommunications, sports
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Favorable to advertising of other companies
with low rates
Murdoch has always been focused on
traditional broadcast media but has now
forayed into Internet
◦ MySpace
◦ Alliance with Google
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Favorable interest rates from his relations
with banking executives
◦ Loans with 146 banks
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“Judicious juggler” of assets
◦ Manages to balance the levels of loans for buying
new companies against selling off of old assets
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Cash Flow
◦ Actual money in hand with which to do things.
◦ Comes from advertising enabling NewsCorp to keep
up with payments
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Tried to purchase DirectTV (2000) owned by
GM
Loss with Echostar, main satellite TV of Direct TV
competitor
◦ Persistent due to his foresight of the promise of
global satellite TV (esp. in US)
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2003 – succeeded in purchasing DirectTV
after FCC regulated that Echostar’s purchase
may result in satellite TV monopoly (more
than 90% in US)
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Merging of Stream and Telepiu pay TV
◦ Both companies were losing US$500M a year
◦ Affected by advertising downturn after 9/11
◦ 2002 – declared a quarterly loss of US$7.7B though
not a direct cash loss
◦ Profited $1.6B compared to $671M in 2001due to
cost efficiencies
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2005 – purchased MySpace.com for US$580M
Figured to be the most magnificent decisions
by Murdoch
◦ With 100M personal profiles
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MySpace has the potential to “fully integrate”
the bulk of NewsCorp’s products
Advent of new interactive media, has
potential to fully integrate horizontally,
vertically and conglomerate to next
generation global media consumers
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Winning Dow Jones & Company – access to
The Wall Street Journal and its historical
archives
USD 5.6 billion sale
WSJ reach and strength:
• Newspaper – 2.1 million
• WSJ.com – 980,000 paid subscribers
• 16 Pulitzer prizes
• Goodwill and global reputation