News Corporation: A profile

Overview

The story of News Corporation is equally the story of its CEO and founder, Australian-born Rupert Murdoch and his family. News Corp was created from wealth Rupert Murdoch inherited from his father. News Corporation is Murdoch's life, and he runs it with a 'passionate interest'. Richard Searby, Murdoch's school friend and later a director of the company, once said: “Most boards meet to make decisions. News Corp's board meets to ratify Murdoch's.” This means Murdoch has an inordinate amount of influence on the companies controlled by the News Corp conglomerate. He visits all of his major operations on a regular basis and continues to find synergies between them. Any of his businesses may play a part in supporting his own or News Corporation's political or commercial influence. Murdoch systematically trades his newspapers' and TV news channels' editorial bias for political favours. Indeed, “most of the critical steps in the transformation of News Limited, the business he inherited, into present day NewsCorp were dependent on such things.” (Bruce Page, How Rupert took on the world).

By carefully cultivating relationships with national governments, Murdoch has bought ever more influence throughout the English-speaking world and beyond. By doing so, he has, time and again, been able to break down or sidestep media legislation intended to prevent the emergence of media barons such as himself. Ultimately, and in spite of his evident right-wing leanings, Murdoch is a political pragmatist who “moves effortlessly between Republicans and Democrats, Tories and Labourites, capitalists and communists, depending on what deals are cooking.” (Russ Baker, Colombia Journalism Review).

Murdoch has increasingly supported the US Republican party since 2009, for example donating US$1m in 2010 for the mid-term election campaign. In the 1980s, News International was able to flout UK law to gain a monopoly in the British TV and Newspaper markets. As a result, News Corp is close to the UK Conservative Party and, in 2010, praised Thatcher's “contribution to the British economy.”

News Corp's Fox News and its British companies often have a racist, anti-immigration, thread running through their coverage. This media bias has a symbiotic relationship with the increasing racism of immigration policies. The racist bias of the corporate media, much of which is controlled by News Corp, justifies and facilitates new anti-migrant policies. In 2010, Fox News denied the company had an anti-immigration stance.

Perhaps because of Murdoch's dominance over News Corp, the company tends to make long-term, often risky, investments that many boards of directors might balk at. News Corp will use whatever means are necessary to force its way into a marketplace, and will run its companies at a loss for years in order to build up a dominant market share and eventual profitability. News Corp has operated with the riskiest possible financing, narrowly avoiding collapse in 1990, and has continued to expand, mostly through acquisitions. Its aggressive business tactics are legendary, and it shows no mercy to its rivals. The company's financial structure has developed into a labyrinth of holding companies, many in offshore tax havens, enabling it to pay astoundingly low taxes.

 

Industry area(s)

News Corporation is a conglomerate, describing itself as a “constellation of media businesses.” These include the production and distribution of motion pictures and television programming; television, satellite and cable broadcasting; the publication of newspapers, magazines and books; the production and distribution of promotional and advertising products and services; and the development of digital broadcasting. News Corporation also has miscellaneous business interests, including a few major sports teams.

More than any other media company, News Corp has achieved hegemony over a large proportion of the world's corporate media. Companies owned by News Corporation include Fox News (USA), ITV (UK), Star TV (Hong Kong, Asia's largest broadcaster), the New York Times (US), BSkyB (UK), Dow Jones/Wall Street Journal (US), 20th Century Fox (US), The Sun (UK), News of the World (UK), The Times and the Sunday Times (UK), Sky (Multinational), Israel 10 (Israel), and Myspace. For a full list, see cjr.org/tools/owners/newscorp.asp.

Company type: Conglomerate, Publicly Traded

Listings: NASDAQ, Australian Securities Exchange

Revenue: US$33 billion (2010)

Assets: US$54 billion (2010)

 

Market share

News Corporation is one of the world's largest media companies with total assets of approximately US$54bn in 2010, and total annual revenues of up to US$33bn. News Corp's assets exceed the gross domestic product of the majority of African countries.

According to its website, News Corporation is the “world's leading publisher of English-language newspapers, with operations in the UK, Australia, New Zealand, Fiji, Papua New Guinea and the US. The Company publishes more than 175 different newspapers, employing approximately 15,000 people worldwide and printing more than 40 million papers a week.”

In the television and film industries, News Corp owns both a large number of content providers (such as Fox Television in the US) and extensive distribution networks (Fox Cable in the US, BSkyB in Europe and Star TV in Asia). In total, the group comprises around 800 companies around the world, with many holding companies based in offshore tax havens.

 

History

Murdoch obtained his first newspaper, The Adelaide News, by inheritance when his father died in 1952. He was at the time still an undergraduate at Worcester College, University of Oxford. In 1953, he returned to Australia and assumed control of the paper, rapidly improving its fortunes. By the end of the decade, he had acquired a New South Wales-based newspaper chain, Cumberland Newspapers, the Sydney Daily Mirror and Melbourne and Brisbane's Truth. 1964 saw him buy a stake in Wellington Publishing, New Zealand's largest media company.

Murdoch returned to the UK in the late 1960s, beating arch-rival Robert Maxwell to the News of the World (1968) and The Sun (1969). In 1973, he entered the US news market, taking over the San Antonio Express News, following up, three years later, with the New York Post, the Village Voice and New York Magazine. A string of further titles were acquired or bought during the 1970s in the US and Australia and, in 1980, he established News Corporation as a global holding company.

In 1981, News Corp bought The Times and The Sunday Times from the Thomson Group. A sympathetic Thatcher government allowed him to exploit a monopolies law loophole to buy the papers. The 1980s brought more landmarks: Murdoch taking American citizenship in order to be able to operate North American TV networks, acquiring 20th Century Fox (1985); buying the South China Morning Post and Harper & Row publishers (1987); and the launch of Sky (1989).

By 1990, News Corp was in deep financial trouble with vast debts. Insolvency was narrowly avoided by a matter of hours. Nonetheless, the media empire went on with its continual expansion, buying £300m broadcasting rights to the Premier League (1992); Asian satellite broadcaster Star Television (1993); LA Dodgers baseball team (1997); and 10 further US TV stations (2000). More recently, News Corp has gained a foothold in mainland Europe. After settling a law suit filed against subsidiary NDS, the corporation bought a share in Italian network Telepiu (2002), which was then renamed Sky Italia (2003). Since 2000, James Murdoch, Rupert's son, has taken over much of the running of News Corp.

In 2005, News Corporation purchased social networking site Myspace for $580m. Ironically, Murdoch claimed at the time of the sale that “young people... want control over their media, instead of being controlled by it.” Since then the company has tried to increase its grasp on the digital media marketplace. In 2008, it also announced plans to charge for some of its online content, gradually putting its newspapers behind 'paywalls'.

In 2006, attracted by the advertising profits made by the Metro, the UK's free daily newspaper owned by Associated Newspapers (AN), News International launched The London Paper, an evening free paper distributed in the capital. Two weeks before its launch, AN launched London Lite in an attempt to spoil News Corp's market. The London Paper itself was intended as spoiler against AN's Evening Standard. In 2009, The London Paper was closed after losing millions in the competition.

In 2007, News of the World's royal affairs editor Clive Goodman and private investigator Glenn Mulcaire were jailed after admitting hacking into the phone messages of royal staff. The paper originally said the hacking was a one-off but it soon emerged that several public figures, including cabinet ministers, sports figures, London's mayor Boris Johnson and publicist Max Clifford had all had their phones hacked. In February 2010, a Parliamentary Select Committee concluded that “News International... sought to conceal the truth about what really occurred.”

Andy Coulson, who was editor of News of the World until his resignation in 2007 in the wake of the hacking scandal, became Director of Communications for the British Conservative Party until he suddenly resigned in late January 2011.

After a 2010 New York Times report on the extent of the hacking, and Coulson's knowledge of it, enquiries have been reopened. Witnesses may be compelled to give evidence before a parliamentary committee.

For a more detailed time line of News Corporation and Murdoch, see www.ketupa.net/murdoch2.htm.

 

Resistance

Rupert Murdoch and News Corp have become synonymous with the corporate media; media outlets telling the story of capitalism and corporations rather than that real news of concern to ordinary people and local communities. Countless subvertised versions of Murdoch papers have been produced, such as The Spun and The Scum, seeking to expose the corporate bias in Murdoch's papers.

In 1986, rather than negotiate with unhappy print workers, News International set up a new printing plant in Wapping and enlisted a scab union, EEPTU, as an alternative workforce. This led to a major confrontation drawing solidarity from the wider worker's movement. The 13-month long picket of the Wapping depot was the scene of mass demonstrations, arson attacks and developed into nightly battles with the police. News International depots and TNT scab vehicles became targets nationwide. A boycott of The Sun, News of the World, The Times and Sunday Times was urged. New laws brought in by the conservative government following the miners' strike allowed the sequestration of union funds. The funds of the Society of Graphical and Allied Trades (SOGAT) were thus duly seized.

Wapping underwent a veritable occupation by the police, urged on by the Thatcher government to break the strike, and many local residents were effectively restricted from travelling in their own neighbourhood. In total, 1,262 arrests were made. Murdoch attempted to pass off the dispute, resulting in the dismissal of 5,500 workers, as a result of introducing new printing technology. In fact it was about breaking the power of the workers.

In 1986, a 4-page spoof of The Sun was produced by anarchists in support of the News International printers strike at Wapping. The spoof's frontpage headline was 'Murdoch fucks donkeys'. Other publications, such as 'Picket' and 'The Wapping Post' were produced by the striking printers and their supporters.

The Wapping strike was was immortalised in a comic strip/spoof paper titled The Scum. Other spoofs of The Sun included The Spun, a 24-page spoof by anonymous anti-war activists highlighting the pro-war bias of the Murdoch papers (see the spoofs article in this issue for more details). The Sun was, and still is, one of the worst war-mongering British tabloids, supporting the UK's military adventures and the 'war on terror'.

In 1989, 96 football fans were crushed to death at the Hillsborough Stadium. News Corp's The Sun, after off-the-record briefings from South Yorkshire Police, blamed the disaster on the fans in an article entitled 'The Truth'. The paper published unattributed allegations, such as stories of Liverpool fans pickpocketing crush victims, as facts. The result was a popular boycott of paper, which lasted for many years. The Sun's editor Kelvin Mackenzie apologised in 1993 but later retracted his apology.