Understanding Monopolies: News Corp
Introduction
News Corporation is a media conglomerate of media publishing houses, including the publication of newspapers, magazines and books, the production and distribution of promotional and advertising products and the development of digital publishing. The Corporation has a number of business interests, including a few major sports teams. The history, relevance and analysis of News Corp would invariably revolve around its iconic and often controversial owner, Australian-born Rupert Murdoch (Corporate Watch).
History
News Corporation was originally created from the wealth Rupert Murdoch received from his father. He obtained his first newspaper, ‘The Adelaide News.’ by inheritance on the death of his father in 1952, while he was an undergraduate at Worcester College, Oxford. Murdoch assumed control of the newspaper after returning from University in 1953 (Corporate Watch).
Murdoch arrived in the UK in the late sixties. He fought off corporate rivalry from Robert Maxwell and was successful in acquiring ‘News of the World’ in 1968 and ‘The Sun’ in 1969. In 1973, he ventured into the US marketplace and acquired the ‘San Antonio Express.’ Within three years, he also acquired the ‘New York Post’, the ‘Village Voice’ and ‘New York Magazine’. He followed up with more acquisitions before establishing News Corporation as a global holding company in 1980 (Corporate Watch).
In 1981, News Corp bought ‘The Times’ and ‘The Sunday Times’ from the Thomson Group, exploiting a monopoly law loophole in the UK. In the eighties, Murdoch acquired US citizenship in order to operate North American TV networks, and acquired ‘20th Century Fox’ in 1985, bought the ‘South China Morning Post’ and ‘Harper and Row’ publishers in 1987 and launched the ‘Sky’ network in 1989 (Corporate Watch).
Since 2000, James Murdoch, Rupert’s son, has taken over most of the day-to-day work in running the conglomerate. The corporate world largely expects James to take over eventually from his father (Corporate Watch).
In 2005, News Corp purchased the social networking site, ‘MySpace’. In 2006, attracted by the advertising profits made by free papers, News Corps launched ‘The London Paper’, a free paper. The “London Paper’ lost millions in a battle for supremacy in its category before Murdoch closed it down in 2009 (Corporate Watch).
In 2007, News Corporation hit the global headlines for the wrong reasons when its News of the World’s royal editor, Clive Goodman and private investigator Glenn Mulcaire were jailed after admitting to hacking into the phone messages of the royal staff. While the newspaper dismissed the hacking incident as an aberration, investigators soon unearthed a systemic effort at hacking the phones of several public figures in UK. This led to more resignations and infamy. Andy Coulson, the editor of ‘News of the World’, resigned (Corporate Watch).
Corporate Information
Divisions. News Corp is headquartered in New York. According the company website, Newscorp has currently organized itself into nine divisions (Newscorp).
- News Corp Australia, headquartered in Sydney, publishes seven of the top ten newspapers sold across Australia. The division has also launched digital products for its key mastheads.
- News UK, headquartered in London, owns ‘The Sun’, ‘The Times’. ‘The Sunday Times’ and ‘TLS’ – a forum of ‘international culture’.
- Dow Jones, a global provider of news and business communication, is headquartered with the parent company in New York. Dow Jones owns popular brands like ‘The Wall Street Journal’, ‘Barron’s’, ‘DJX’ and ‘Market Watch’.
- New York Post, headquartered in New York, is America’s oldest continuously published newspaper.
- Harper Collins, headquartered in New York, is a publishing house with seven subsidiaries. Harper Collins is a broad-based publisher with strengths in literary and commercial fiction, business books, children’s books and religious and spiritual books.
- Amplify, headquartered in New York, is a company engaging the educational world with content for teachers, enabling personalized instruction.
- News America Marketing, headquartered in New York, is a publisher of coupons in USA and Canada. It publishes ‘SmartSource’ magazine and provides information about in-store marketing products and consumer packaged products.
- Storyful, based in Dublin, leverages technology and journalistic experience to find content that can be used by newsrooms, brands and video producers.
- Move, headquartered in Westlake Village, California, is a leading provider of online real estate services. The company operates websites and has mobile interfaces for consumers.
Financials. News Corporation is a publicly traded company. According to its 2013 Annual report, the conglomerate had annual revenue of 8.81 Billion Dollars, translating to 688 Million Dollars in earnings before interests, taxes and amortization (News Corp). News Corp has a market capitalization of 8.96 Billion, as against a market capitalization of 27.07 Billion for CBS, its main conglomerate competitor (Google Finance).
Chairman and CEO
Rupert Murdoch is the Chairman of News Corp. The story of his inheritance of a newspaper and subsequent expansion mirrors the history of News Corp. Robert Thomson is the CEO of News Corp since January 2013 after his stint as senior executive at Dow Jones.
Corporate Values. News Corporation professes trust and commitment as its corporate values. The conglomerate declares its commitment to free markets and to the global community, with a special place to the public that consumes its content (News Corp).
The company’s corporate values aimed at the general public, as seen from the website, seek to assure the reader that News Corp holds the torch for free access to news and is committed to being trust worthy. Readers are guided to believe that they can trust content delivered by the conglomerate (News Corp). As against generic espousals of diffuse values, the company’s annual report is more detailed in outlining how it can be profitable in the future and the risks that it faces. News Corp identifies that the separation of its companies may stymie its efforts for strategic transactions. It makes its investors alive to risks associated with changes in government regulations, technological developments and changes in educational funding (News Corp).
Future Growth. Currently, News Corp is grappling with the implications of the separation of its companies into two verticals. The company is seeking to consolidate itself while at the same time acquire profitable companies. The separation is strategic, as the after effects of the phone hacking controversy would be restricted to News Corp, leaving 21st Century Fox to develop into the profitable digital media realm (News Corp). News Corp will have to handle the challenges of controlling the costs associated with print media. Cash flow will remain a challenge. The company’s reliance on advertising remains a limitation. The company would need to concentrate on the growth of digital media. The company would also need to look towards increasing its footprint in emerging markets such as India and China. Lastly, much of the future of the company would revolve around the manner in which Murdoch relinquishes power. Once power is handed over, the character of News Corp is prone to change (Jackson).
Reports about the Company
News Corp, under Murdoch, has always been an intensely reported company. Murdoch has been known to push his own brand of politics through his media empire. His Australian news outlets have been known to campaign vociferously for candidates that Murdoch supports. In the eighties, he thwarted domestic opposition to the emergence of conglomerates from the likes of Malcolm Fraser, a former Prime Minister, and Macphee, the Opposition spokesman. While he has expanded his business interests, Murdoch has simultaneously kept his political interests alive. He has used political influences to expand his media interests, and vice versa. He has exerted political influence in the UK through the ‘Sun’, supporting Thatcher, who in turn enabled him to expand in UK. News Corp’s support to New Labor in UK could be highlighted by the detailed telephone conversation Ton Blair had with Murdoch prior to the invasion of Iraq in 2003. Murdoch switched allegiances to the David Cameron and the Conservatives in 2009. In return, the Conservatives helped the Sun’s bid for BSkyB (Jackson).
In USA, Murdoch realized that control of the print media did not translate to political power, as print media was divided in a four-way contest and contributed to only one fourth of the overall media pie. Therefore, Murdoch opted to expand into cable and digital media. He partnered with Roger Ailes, a right wing ideologue, to create Fox News. Through Fox News, Murdoch sought to press for the free markets and right wing-slanted news. Fox News supported George W. Bush’s presidency and the invasion of Iraq (Jackson).
In Australia, Murdoch has chosen to pursue his goals of free markets, small government and American global leadership through ‘The Australian.’ His news holdings in Australia have been a major factor in dictating the dominant messages in Australian elections (Jackson).
Analysis
An analysis of the rise and growth of News Corp suggests that there is a synergy in print and digital media. It is possible for entrepreneurs to leverage this synergy and create profit-making conglomerates. Despite the rising costs, print media retains its power to influence people. The losses inherent in print media reinforce the rise of digital media.
It is possible for media conglomerates to influence politics and the dominant discourse. Therefore, independent media channels and houses are very important to counteract the effect of conglomerates.
Conclusion
It is essential to remain alive to the methods in which media conglomerates can influence politics and popular opinion. The Federal Communications Commission website has a link for public comments, complaints and discussions, which the public should leverage in order to keep the media space free and well regulated.
Works Cited
Corporate Watch. “News Corporation.” CorporateWatch.org. 2014. Web. 11 Dec 2014.
Economist. “Why is News Corp Splitting in Two?” Economist.com. 21 Jun 2013. Web. 11 Dec 2014.
Google Finance. “News Corp.” Finance.Google.com. n.d. Web. 11 Dec 2013.
Jackson, Jasper. “Six Key Challenges Facing News Corp’s Print and Digital Future.” TheMediaBriefing.com. 30 May 2016. Web. 11 Dec 2014.
News Corp. 2013 Annual Report. Investors.Newscorp.com. 20 Sep 2013. Web. 11 Dec 2014.
News Corp. “Our Businesses.” NewsCorp.com. n.d. Web. 11 Dec 2014.
News Corp. “Standards of Business Conduct.” NewsCorp.com. n.d. Web. 11 Dec 2014.
