Nov 1 1997

News Corporation

(From “The Global Media Giants,” by Robert W. McChesney, Extra!, November/December 1997)

$10 billion – 1996 sales

The News Corporation is often identified with its head, Rupert Murdoch, whose family controls some 30 percent of its stock. Murdoch’s goal is for News Corporation to own multiple forms of programming–news, sports, films and children’s shows–and beam them via satellite or TV stations to homes in the United States, Europe, Asia and South America. Viacom CEO Sumner Redstone says of Murdoch that “he basically wants to conquer the world.”

And he seems to be doing it. Redstone, Disney CEO Michael Eisner and Time Warner CEO Gerald Levin have each commented that Murdoch is the one media executive they most respect and fear, and the one whose moves they study. TCI‘s John Malone states that global media vertical integration is all about trying to catch Rupert. Time Warner executive Ted Turner views Murdoch in a more sinister fashion, having likened him to Adolf Hitler.

After establishing News Corporation in his native Australia, Murdoch entered the British market in the 1960s and by the 1980s had become a dominant force in the U.S. market. News Corporation went heavily into debt to subsidize its purchase of 20th Century Fox and the formation of the Fox television network in the 1980s; by the mid-1990s News Corporation had eliminated much of that debt.

News Corporation operates in nine different media on six continents. Its 1995 revenues were distributed relatively evenly among filmed entertainment (26 percent), newspapers (24 percent), television (21 percent), magazines (14 percent) and book publishing (12 percent). News Corporation has been masterful in utilizing its various properties for cross-promotional purposes, and at using its media power to curry influence with public officials worldwide. “Murdoch seems to have Washington in his back pocket,” observed one industry analyst after News Corporation received another favorable ruling (New York Times, 7/26/96). The only media sector in which News Corporation lacks a major presence is music, but it has a half-interest in the Channel V music television channel in Asia.

Although News Corporation earned 70 percent of its 1995 income in the United States, its plan for global expansion looks to continental Europe, Asia and Latin America, areas where growth is expected to be greatest for commercial media. Until around 2005, Murdoch expects the surest profits in the developed world, especially Europe and Japan. News Corporation is putting most of its eggs in the basket of television, specifically digital satellite television. It plans to draw on its experience in establishing the most profitable satellite television system in the world, the booming British Sky Broadcasting (BSkyB). News Corporation can also use its U.S. Fox television network to provide programming for its nascent satellite ventures. News Corporation is spending billions of dollars to establish these systems around the world; although the risk is considerable, if only a few of them establish monopoly or duopoly positions the entire project should prove lucrative.

News Corporation selected holdings

The U.S. Fox broadcasting network; Twenty-two U.S. television stations, the largest U.S. station group, covering over 40 percent of U.S. TV households; Fox News Channel; A 50 percent stake (with TCI‘s Liberty Media) in several U.S. and global cable networks, including fx, fxM and Fox Sports Net; 50 percent stake in Fox Kids Worldwide, production studio and owner of U.S. cable Family Channel; Ownership or major interests in satellite services reaching Europe, U.S., Asia and Latin America, often under the Sky Broadcasting brand; 20th Century Fox, a major film, television and video production center, which has a library of over 2,000 films to exploit; Some 132 newspapers (primarily in Australia, Britain and the United States, including the London Times and the New York Post), making it one of the three largest newspaper groups in the world; Twenty-five magazines, most notably TV Guide; Book publishing interests, including HarperCollins; Los Angeles Dodgers baseball team.