News Corporation

Last updated: 
2011

 


 

Industry Area and Importance

 

News Corporation is a conglomerate, describing itself as a 'constellation of media businesses'.[1] 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.

Some of the companies owned by News Corporation are Fox News (USA), ITV (UK), Star TV (Hong Kong, Asia's largest broadcaster), the New York Post (US), BskyB (UK), Dow Jones/Wall Street Journal (US), 20th Century Fox (US), The Sun (UK), The News of the World (UK), The Times and the Sunday Times (UK), Sky (Multinational), Israel 10 (Israel), Myspace.

For a full list see: www.cjr.org/tools/owners/newscorp.asp. News Corp, more than any media corporation has achieved hegemony over a large proportion of the world's corporate media.

Company Type: Conglomerate, Publicly Traded

Listings: NASDAQ, Australian Securities Exchange

Revenue: US$33 Billion (2010) [2]

Assets:US$54 Billion (2010) [3]

Overview

 

The story of News Corporation is equally the story of its CEO and founder, the 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, said: 'Most boards meet to make decisions. News Corp's board meets to ratify Murdoch's.' This means Murdoch has an inordinate amount of experience 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' [4]

- Bruce Page in 'How Rupert took on the world'

By carefully cultivating relationships with national governments he 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 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'.3 - Russ Baker in the 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.[6] In the eighties 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'.[7]

News Corp's Fox News and its British companies have a racist, anti immigration, thread running through their coverage. This media bias has a symbiotic relationship with the increasing racism of, for example, the British state. The racist bias of the corporate media, much of which is controlled by News Corp, justifies and facilitates new racist state policies. In 2010 Fox News denied the company had an 'anti-immigration stance'.[8]

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 the all important 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 by acquisition). Its aggressive business tactics are legendary, and it shows no mercy to its rivals. Its financial structure has developed into a labyrinth of holding companies, many in offshore tax havens enabling it to pay astoundingly low taxes.

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Market share and importance

 

News Corporation is one of the world's largest media companies with total assets in 2010 of approximately US$54bn and total annual revenues of up to US$33bn.[9]

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'

[10]

In the television and film industries, News Corp owns both a large number of content providers (such as Fox Television in the US) and also extensive distribution networks (BskyB in Europe, and Star TV in Asia, Fox Cable in the US)

In total the group comprises around 800 companies around the world, with many holding companies based in offshore tax havens.[11]

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History and strategy

 

Murdoch obtained his first newspaper, 'The Adelaide News', by inheritance on the death of his father in 1952. He was then 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.

He arrived in the UK in the late '60s, beating arch-rival Robert Maxwell to the 'News of the World' (1968) and 'The Sun' (1969). Then in 1973 he entered the US market place, taking 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 70s 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, but still 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); 10 further US TV stations (2000). More recently News Corp has gained a foothold in mainland Europe: in settling the law suit filed against subsidiary NDS, News Corp 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. Murdoch junior is expected to succeed his father as head of the corporation.[12]

In 2005 News Corporation purchased the social networking site, Myspace, for $580m.[13] Ironically, Murdoch claimed, at the time of the sale, that 'young people' “want control over their media, instead of being controlled by it”.[14] Since then the company has tried to increase its grasp on the 'digital media' marketplace. Since 2008, News Corporation has announced it plans to charge for some of its online content, , gradually putting its newspapers behind 'paywalls'.[15]

In 2006, attracted by the advertising profits made by freepaper, The Metro, owned by Associated Newspapers (AN), News International launched The London Paper, a free paper. Two weeks before the launch of the London Paper AN launched the London Lite in an attempt to spoil News Corp's market. The London Paper itself was intended as spoiler against AN's Evening Standard. Within months, The London Paper was distributing 500,000 copies, about 100,000 more than London Lite. However, in 2009, Murdoch closed The London Paper after losing millions vying with his rivals.

In 2007, News Corporation's News of the World's royal editor Clive Goodman and private investigator Glenn Mulcaire were jailed after admitting hacking into the phone messages of royal staff.[16] The paper originally said the hacking was a one off but it soon emerged that several public figures, including cabinet ministers, sports figures, Boris Johnson and the publicist, Max Clifford, had had there phones hacked. In February 2010 a Parliamentary Select Committee concluded that “News International... sought to conceal the truth about what really occurred.” [17]

Andy Coulson, who was Editor of News of the World until his resignation in 2007 in the wake of the hacking scandal, was Director of Communications for the British Conservative Party (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.[18] Witnesses may be compelled to give evidence before a parliamentary committee.[19]

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

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Resistance

 

Rupert Murdoch and News Corp have become synonymous with the corporate media, a media telling the story of capitalism and corporations rather than of people and communities. Countless subvertised versions of Murdoch papers have been produced seeking to expose the corporate bias in Murdoch's media.

In 1986 News International, rather than negotiate with printworkers, set up a new printing plant in Wapping and enlisted a scab union, EEPTU,[20] as an alternative workforce resulting in a major confrontation drawing solidarity from the wider worker's movement.[21] The thirteen 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, The News of the World, The Times and the Sunday Times was urged. New laws brought in by the conservative government following the miner's strike allowed the sequestration of union funds and SOGAT's funds were duly seized.[22] 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. 1,262 arrests were made.[23] Murdoch attempted to pass off the dispute, resulting in the dismissal of 5,500 workers, as the result of a transition to new printing technology. In fact it was about breaking the power of the workers.

In 1986, a 4-page spoof of the Murdoch-owned paper was produced by anarchists to support the News International printers strike at Wapping. The spoof's frontpage headline was 'Murdoch fucks donkeys'. Other publication such as Picket and The Wapping Post were produced by the striking printers and their supporters.[24]

The Wapping strike was immortalised in the comic strip/spoof paper, The Scum – http://libcom.org/library/the-scum-comic-about-wapping-strike-1986.

The Spun, a 24-page spoof of The Sun by anonymous anti-war activists highlights the pro-war bias of the Murdoch papers. The front page story, 'Shop 'til they drop', combined a critique of consumerism and the then new 'war on terror', with Tony Blair urging Spun readers to "get out and spend, spend, spend for freedom!" The rest of the spoof analysed the 'war on terror', the war on Afghanistan, economic globalisation and the global grassroots movement against it. 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 ninety-six football fans were crushed to death at the Hillsborough Stadium. News Corp's The Sun, after off-the-record briefings from South Yorkshire Police, in an article entitled 'The Truth', blamed the disaster on the fans. The paper published unattributed allegations, such as stories of Liverpool fans pickpocketing crush victims, as facts. The result was a popular boycott of The Sun which lasted for many years. The Sun's editor, Kelvin Mackenzie, apologised in 1993 but later retracted his apology.[25]

References [1] IMUSA Campaigns.' See: www.imusa.org/campaigns/murdoch/murdoch02.shtml Viewed 15.04.2004.

[2] Company Website, www.newscorp.com/investor/index.html, Viewed 02/11/2010

[3] Ibid.

[4] How Rupert took on the world,' Bruce Page, The Observer, 24.08.03. See: www.guardian.co.uk/media/2003/aug/24/rupertmurdoch.bookextracts, Viewed 02/11/2010

[5] Murdoch's Mean Machine,' Russ Baker, Colombia Journalism Review, May/June 1998. See: www.russbaker.com/CJR%20%20Murdoch's%20Mean%20Machine,%20by%20Russ%20Baker.htm

Viewed 15.04.2004.

[6] Rupert Murdoch Donates $1m to Republicans, Ewen MacAskill, The Guardian, 17.08.2010, see www.guardian.co.uk/media/2010/aug/17/rupert-murdoch-donation-republicans, Viewed 02/11/2010

[7] Rupert Murdoch to Honour Thatcher in Speech, James Robinson, The Guardian, 7.10.2010, see www.guardian.co.uk/media/2010/oct/07/rupert-murdoch-thatcher-speech, Viewed 02/11/2010

[8] Murdoch: Fox News is not Anti-Immigrant, Richard Sisk, NY Daily News, 30.09.2010, see www.nydailynews.com/blogs/dc/2010/09/murdoch-fox-news-is-not-anti-i.html, Viewed 02/11/2010

[9] Company Website, www.newscorp.com/investor/index.html Viewed 02/11/2010

[10] Company Website, www.newscorp.com/operations/newspapers.html. Viewed 02/11/2010

[11] Rupert Laid Bare, Alex Peterson, The Economist, 20.03.99. See: www.vision.net.au/~apaterson/politics/economist_murdoch.htm. Viewed: 06.04.04

[12] News Corp Major Shareholder, James Murdoch Should Succeed Robert, Mark Sweney, The Guardian, 22.01.2010, see www.guardian.co.uk/media/2010/jan/22/james-murdoch-news-corp-head, Viewed 02/11/2010

[13] What Myspace means to Murdoch, Jeremy Scott-Joynt, BBC News, 19.07.2005, see http://news.bbc.co.uk/1/hi/business/4697671.stm, Viewed 02/11/2010

[14] Ibid.

[15] Rupert Murdoch Plans to Charge for all News Websites by Next Summer, Andrew Clark, 06.08.2009, The Guardian, see www.guardian.co.uk/media/2009/aug/06/rupert-murdoch-website-charges, Viewed 02/11/2010

[16] News of the World Accused of Phone Tapping Amnesia, BBC News, 24.02.2010, see http://news.bbc.co.uk/1/hi/uk/8533394.stm, Viewed 02/11/2010

[17] Mps Verdict on News of the World Phone Hacking Scandal: Amnesia, Obfuscastion and Hush Money, David Leigh, Patrick Wintour and Caroline Davies, The Guardian, 24.02.2010, see www.guardian.co.uk/media/2010/feb/24/phone-hacking-scandal-mps-report, Viewed 02/11/2010

[18] Phone Hacking Scandal: Andy Coulson Listened to Intercepted Messages, Nick Davies, The Guardian, 03.10.2010, see www.guardian.co.uk/media/2010/oct/03/phone-hacking-scandal-andy-coulson, Viewed 02/11/2010

[19] UK: Parliamentary Enquiry into Phone Hacking Scandal to Begin, Cyril Washbrook, The Spy Report, 10.09.2010, see www.mediaspy.org/report/2010/09/10/uk-parliamentary-inquiry-into-phone-hacking-scandal-to-begin/, Viewed 02/11/2010

[20] Wapping Dispute, Aneurin, Everything2, 24.02.2007, see http://everything2.com/user/aneurin/writeups/Wapping+Dispute, Viewed 02/11/2010

[21] TUC History, see www.unionhistory.info/timeline/1960_2000_7.php, Viewed 02/11/2010

[22] Ibid.

[23] Twenty Years On, Unions Mull Murdoch's Flight From Fleet Street, Joanne Gardner, Printweek, 19.01.2006, see www.printweek.com/news/536281 Viewed 02/11/2010

24] Ruck, Riot N'Roll, Ian Bone, see http://ianbone.wordpress.com/ruck-riotn-roll/, Viewed 02/11/2010

[25] Hillsborough: How the Sunday Times and the Sun Reported the Tragedy, Roy Greenslade, The Guardian, 15.04.2009, see www.guardian.co.uk/media/greenslade/2009/apr/15/hillsborough-disaster-sundaytimes, Viewed 02/11/2010

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