rupert murdoch & news corp
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MCC314 Global Media Industries Session 10 Lecture. Rupert Murdoch & News Corp. Introduction. Murdoch is a bizzare character ; known for “tits and bums” - notorious headlines on his papers - PowerPoint PPT PresentationTRANSCRIPT
Introduction 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
“The most influential Australian of all time…”
-The Bulletin, 2006
How can the most influential Australian of all
time be an American?!$%
How can the most influential Australian of all
time be an American?!$%
“Mr. Murdoch’s record speaks for
itself…”- John Hewson
“Mr. Murdoch’s record speaks for
itself…”- John Hewson
…the most original business figure Australia has produced…”
- Les Carlton, Melbourne Herald
Considered the most original business figure Australia ever produced
Genius for creating NewsCorp at present form and ability to arise from financial difficulty
In OZ, 60% of all dailies;◦ The Australian, The Daily Telegraph, The Herald
Sun, The Courier Mail, The Sunday Times In UK
◦ The Times, The Sun (largest English-language daily in the world), News of the World (largest Sunday paper in the world)
In US◦ The New York Post
Fox Network◦ 33 TV stations in US ◦ Fox Broadcasting Company – produces The Simpson,
The Practice◦ Fox Cable
Fox News Channel Fox Sports NatGeo Channel
20th Century Fox – produced Moulin Rouge, Avatar
Fox Video – distributes products to the Far East
Direct Broadcasting Satellite◦ BSkyB (Britain, Europe)◦ Stream (Italy)◦ Star TV (HK, China, India, and other Asian
countries) 25% stake in Foxtel together with Telstra
and Packer’s Publishing and Broadcasting Ltd.
HarperCollins ◦ 2nd largest English-language book publisher
TV Guide (US)◦ Largest circulation of consumer TV magazine
MySpace AmericanIdol.com New York Knicks (40%) NY Rangers Madison Square Garden
In 2004, earned Aus$2.75B Also the end of NewsCorp in Adelaide 2006, NewsCorp listed on the NYSE Based almost entirely in NY
Reason:◦ 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
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
1969 – bought News of the World and The Sun (UK)◦ Successful with huge cash flow from international
stage
1970 – bought San Antonio Express, The Chicago Sun and New York Post
1970 – 1980 – Diversified entrepreneurship◦ 50% of Ansett Airlines (now defunct)◦ Purchased Channel 10 in Sydney and approached
satellite TV operations in UK and US
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
1990 – invested on satellite TV in UK (BSkyB)◦ ‘colossal investments in unproven high-risk
satellite-based new media ventures’ Barn, 2000) Invested on Star TV
◦ 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
Murdoch’s Business Strategy 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
INTEGRATION◦ The ability to produce a mix of companies and
businesses that integrate into a well-functioning whole
Three types of integration:◦ Vertical integration◦ Horizontal integration◦ Conglomerate integration
Vertical IntegrationVertical Integration
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
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
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
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
Favorable interest rates from his relations with banking executives◦ Loans with 146 banks
“Judicious juggler” of assets◦ Manages to balance the levels of loans for buying
new companies against selling off of old assets Cash Flow
◦ Actual money in hand with which to do things.◦ Comes from advertising enabling NewsCorp to
keep up with payments
Tried to purchase DirectTV (2000) owned by GMLoss with Echostar, main satellite TV of Direct TV
competitor◦ Persistent due to his foresight of the promise of
global satellite TV (esp. in US) 2003 – succeeded in purchasing DirectTV
after FCC regulated that Echostar’s purchase may result in satellite TV monopoly (more than 90% in US)
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
2005 – purchased MySpace.com for US$580M
Figured to be the most magnificent decisions by Murdoch◦ With 100M personal profiles
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