Rupert Murdoch: A predatory capitalist who stifles competition & delivers mediocrity

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Our politicians pay court to Rupert Murdoch like Roman vassals. He is a threat to democracy and it is time we took him on:

I do not usually admire middle America, but on this occasion I wonder if it should be an inspiration to us all. OJ Simpson - who, while acquitted of actually murdering his ex-wife and her friend, was held responsible in a civil court for her death - was about to give the world, courtesy of Rupert Murdoch, a "hypothetical" account of how he could have committed the crime. Murdoch's News Corporation had a book lined up, a TV interview that would be syndicated across America and, no doubt, countless spin-offs in other countries and media. Public opinion, including bookshop and TV staff, cried "enough". For once Murdoch couldn't do what he liked. On Monday he agreed to stop the project, and fragile standards of public taste and decency survived for another day. Gosh, the great man even apologised for an "ill-considered project", which is a bit like an ayatollah admitting he'd misread the Qur'an.

But this, I fear, will cause just a ripple in the Murdoch empire: the emperor can afford to behave decently from time to time, and we are all very grateful - just as when he decided to stop publishing rubbish from global-warming deniers and take an interest in saving the planet. Of more importance is Murdoch's sudden purchase (to be precise it was James Murdoch, son of Rupert and chief executive of BSkyB, but the distinction isn't important) of 17.9% of ITV shares. Sir Richard Branson, with the cable company NTL, was planning a £6bn takeover of ITV. It might not have happened anyway (ITV's board yesterday rejected the bid while implying it might look kindly on a higher price), but Murdoch's intervention makes it highly unlikely.

Though Murdoch is just within the 20% limit for cross-media ownership of ITV shares, the media regulator Ofcom is to investigate. But don't expect spectacular results. The Times assured us yesterday that Labour was "happy" and the Conservatives "content", and that only the dear old dotty Lib Dems were at all bothered. So that's all right, then.

Well, no, it's not all right, particularly since the insouciance of the big political parties is entirely down to their anxiety about securing Murdoch's support at the next election. We are talking information here, and Murdoch controls a vast amount of the information that flows around the world, from China to California. As the OJ Simpson affair shows, he's a cultural, as well as political, gatekeeper. That's why, though we should worry about Branson, we should worry more about Murdoch. Branson also has a gigantic network of interests, but he's essentially a brand label that can be slapped on anything from jeans to jumbo jets, and doesn't have the same influence on how we perceive the world.

What is Murdoch up to at ITV? All you need to grasp is that we don't really know; we never do with Murdoch. "In any deal that Murdoch does," one biographer has written, "there is always a second strand running below the public transaction, known only to insiders, and then there is a third strand running under that again, which no one ever sees." Without many people here noticing, he picked up 7.5% of Fairfax, his Australian rival, a few weeks ago. "Just to make it difficult for anybody to take them over," explained Rupert - who presumably calculates that, in his native land, they appreciate plain speaking, whereas the Brits can be told the ITV share purchase was just "a long-term investment". It looks as if this is the new Murdoch mission across the world: to stop predatory capitalists from gobbling things up. As long as the predatory capitalist isn't called Murdoch.

In other words, if he can't or won't get actual control (and, depending on the strength of other shareholders, 17.9% seems very close to it), Murdoch will continue to do what he has always done: to weaken his rivals, not by producing better quality content, still less by developing original TV programmes or innovative films, but by exploiting his dominant market position. He wants to maintain what amounts to a monopoly position in non-terrestrial British TV programming and, if Branson and NTL got their hands on ITV's content and programme-making experience, that might be threatened. Keeping his rivals weak cheats the public. Murdoch endeavours to stifle competition, and thus bring everything down to his level of mediocrity and bland populism.

We've seen it before. His newspaper price war in the 1990s caused the Independent to lose its independence and threatened its survival. In its headline circulation figures, the Daily Telegraph clung on to its market leadership among daily qualities, the only sector of the national market where Murdoch isn't undeniably dominant. But its full-rate UK sales are now significantly below those of the Times.

Murdoch can live with small, relatively weak rivals, such as Channel Five, the present ITV, the Telegraph, the struggling Mirror papers, and so on. Look, he will say, readers and viewers have plenty of choice, so how can you accuse me of excessive control? He will muse, from time to time, about a democratic revolution, in which technology allows anybody freedom to publish. He said it after the move to Wapping, the advent of digital TV and the growth of the web - but the new age never quite comes to pass.

What Murdoch will not tolerate is anything big enough to challenge him. He has only two serious rivals in the UK media industry: the BBC and Associated Newspapers, owners of the Daily Mail and the Mail on Sunday. He has disrupted the latter by starting a freesheet, the London Paper - as a rival to Associated's free Metro, distributed on the London tube, and to its evening paper, the Standard. The BBC, meanwhile, is subjected to relentless knocking propaganda from the Murdoch press that aims, at the least, to pressure the government into starving the corporation of resources by holding down the licence fee. BBC news services are consistently accused of being dominated by a liberal bias: a chilling echo of similar charges levelled at the public broadcasting channels and great metropolitan newspapers in America from, among others, the Murdoch-owned Fox News.

Murdoch is so much a part of the landscape that we sometimes lose sight of how outrageous his power is; we think his behaviour is just that of a natural businessman, as in some senses it is. But British political leaders cross the globe to pay him court, like tribal chiefs from outlying provinces offering tribute to a Roman emperor. He pays only the tax he feels like paying, which isn't much. To a remarkable extent, his political agenda - light business regulation, tight shackles on trade unions, a semi-detached status within the European Union, support for the American neocons in Iraq - is also the British political agenda.

Murdoch is an object lesson in the dangers of concentrated cross-border power. Such power is always problematic because it is apt to reduce diversity, squeeze out the regional and local, and stifle dissent. When it occurs in the information industry, it threatens democracy. It's doubtful that anybody can stop him buying his 17.9% of ITV: ownership regulations, last relaxed three years ago but with the usual assurances about "safeguards" for the public interest, nearly always turn out too weak to prevent Murdoch doing what he wants to do. It is time more people followed the example of middle America and took him on.

A predatory capitalist who stifles competition and delivers mediocrity

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NEW YORK, June 25, 2007: In the autumn of 2003, a piece of Rupert Murdoch's sprawling media empire was in jeopardy.

Congress was on the verge of limiting any company from owning local television stations that reached more than 35 percent of American homes. Murdoch's Fox stations reached nearly 39 percent, meaning he would have to sell some.

A strike force of Murdoch's lobbyists joined other media companies in working on the issue. The White House backed the industry, and in a late-night meeting just before Thanksgiving, congressional leaders agreed to raise the limit - to 39 percent.

One leader of the congressional movement to limit ownership was Senator Trent Lott, Republican of Mississippi. But in the end, he, too, agreed to the compromise.

It turns out that Lott had a business connection to Murdoch. Months before, HarperCollins, Murdoch's publishing house, had signed a $250,000 book deal with Lott, records and interviews show.

The senator's memoir, "Herding Cats," sold poorly.

An aide to Lott said the book deal had no bearing on the senator's decision, and a spokesman for Murdoch chalked it up to coincidence.

But the fight showcases the confluence of business, political and media prowess that is central to the way Murdoch has built his global information conglomerate.

His vast media holdings give him a gamut of tools - not just campaign contributions but also jobs for former government officials and media exposure that promotes allies while attacking adversaries, sometimes viciously - all of which he has used to further his financial interests and establish his legitimacy in the United States, interviews and government records show.

Murdoch may be best known in the United States as the man who created Fox News as a counterweight to what he saw as a liberal bias in the news media. But he has often set aside his conservative ideology in pursuit of his business interests.

In recent years, he has spread campaign contributions across both sides of the political aisle and nurtured relationships with the likes of Bill and Hillary Clinton.

More than 30 years after the Australian-born Murdoch arrived on the American newspaper scene and turned The New York Post into a racy, right-leaning tabloid, his holding company, News Corp., has offered $5 billion to buy a pillar of the business news establishment - Dow Jones, parent company of The Wall Street Journal.

The sale would give Murdoch control of the pre-eminent journalistic authority on the world in which he is an active, aggressive participant.

What worries his critics is that Murdoch will use The Journal, which has won many Pulitzer Prizes and has a sterling reputation for accuracy and fairness, as yet another tool to further his myriad financial and political agendas.

"It is hard to imagine Rupert Murdoch publishing The New York Post in Midtown Manhattan, with all of his personal and political biases and business interests reflected every day, while publishing The Wall Street Journal in downtown Manhattan with no interference whatsoever," James Ottaway Jr., a 5 percent shareholder and former director of Dow Jones, said recently.

Members of the Bancroft family, which controls Dow Jones, have sought elaborate assurances from Murdoch that he will preserve the independence of The Journal's news coverage.

On Sunday night, advisers to both sides said they were close to reaching an agreement on editorial control, but it was unclear whether the Bancrofts would approve a deal. When Murdoch bought The Times of London in 1981 he gave similar assurances, but some former editors say he meddled with news operations anyway.

Murdoch declined a request for an interview, but in recent interviews he promised to preserve The Journal's independence. His spokesman, Gary Ginsberg, said it was "insulting" for anyone to suggest that Murdoch would "impugn the integrity of one of the world's great newspapers" adding, "It's not good business and it's not good politics and it's absurd on its face."

From his beginnings as a proprietor of a single Australian newspaper, Murdoch now commands a news, entertainment and Internet enterprise whose $68 billion value slightly exceeds that of Walt Disney.

The U.S. newspaper industry has never seen a publisher quite like him. Murdoch has long been a pivotal figure in England and Australia, and in the dozen years since he has moved his base of operations to the United States, he has insinuated himself into the political and financial fabric of the country.

His businesses have thrived in a highly regulated environment, in part because of his remarkable ability to mold the rules to fit his needs.

This became clear in the regulatory fight over media ownership, a battle critical to Murdoch's audacious creation of a fourth national television network, Fox.

He has also turned his political clout on business rivals, as he did when he mounted a campaign recently against the Nielsen television rating agency.

"Rupert is sort of an 18th-century guy: the world is still forming, and he's going to do what he can to hack out a place in the wilderness and defend it," said Richard Parsons, chairman of Time Warner, who both competes and socializes with Murdoch.

Shortly before Christmas in 1987, Senator Edward Kennedy, Democrat of Massachusetts, taught Murdoch a tough lesson in the ways of Washington.

Two years earlier, Murdoch had paid $2 billion to buy seven television stations in major U.S. markets with the intention of starting a national network. To comply with rules limiting foreign ownership, he became a U.S. citizen.

And to comply with rules banning the ownership of television stations and newspapers in the same market, he promised to sell some newspapers eventually. But almost immediately he began looking for ways around that rule.

Then Kennedy stepped in. The senator's liberal politics had made him a target of Murdoch-owned news media outlets, particularly The Boston Herald, which often referred to Kennedy as "Fat Boy." Kennedy engineered a legislative maneuver that forced an infuriated Murdoch to sell his beloved New York Post.

Murdoch was able to buy back the tabloid five years later, but the sale represented a rare and, some say, transforming defeat.

"Teddy almost did him in," Philip Verveer, a cable television lobbyist, said.....

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Murdoch has shown an ability to adapt to changing political winds. In Britain, his newspapers had a long history of being pro-Tory and anti-Labour, and he was personally close with former Prime Minister Margaret Thatcher.

But in 1997, two of Murdoch's papers endorsed Tony Blair for prime minister. Murdoch became a frequent guest at No. 10 Downing Street, "effectively a member of Blair's cabinet," said Lance Price, who was a Blair spokesman from 1998 to 2001.

Murdoch had reason to court Blair: ensuring that the new government would allow him to keep intact his British holdings, which by then included The Times of London, multiple tabloids and a stake in Sky News.

Many in the Labour Party under Blair favored the enactment of media ownership limits, which could have forced Murdoch to divest some of his interests. But Blair "quietly dropped the policy," Price said.

"Blair's attitude was quite clear," Andrew Neil, editor of The Sunday Times under Murdoch in London from 1983 to 1994, said during an interview. "If the Murdoch press gave the Blair government a fair hearing, it would be left intact."

Murdoch's trajectory in the United States has been similar. His credentials as a purveyor of conservative journalism notwithstanding, he operates like many less visible corporate executives in not allowing his personal politics to get in the way of his bottom line.

An analysis of campaign finance records shows that since 1997, Republicans have received only a slight majority - 56 percent - of the $4.76 million in campaign donations from the Murdoch family and News Corp.'s political action committees and employees.

Since Democrats won control of Congress in the 2006 elections, the company and its employees have given more than twice as much to Democrats as to Republicans, the records show.

"We did seek more balance," said Peggy Binzel, Murdoch's former chief in-house lobbyist.

Now, Murdoch is trying convince the Bancroft family to sell him The Wall Street Journal.

Dow Jones has proposed a committee to safeguard the paper's editorial independence that includes a continuing role for some members of the Bancroft family and current Journal editors and executives. Murdoch rejected the family's first proposal but responded with his latest proposal over the weekend.

Murdoch has said he prefers a model of the committee used at The Times of London. The News Corp. bought The Times in 1981 and in order to win approval for the deal, Murdoch agreed to an independent oversight committee and guidelines intended to prevent him from meddling in news coverage.

According to interviews with former Times editors and affidavits filed in an unrelated 1995 libel suit, there were clashes over the publisher's involvement in the paper from the very start.

Harry Evans, who was editor at the time of Murdoch's acquisition and was forced out soon after, wrote a memoir vividly describing his constant fights with the new publisher. In his affidavit, Evans describes Murdoch's ordering the publication of a cartoon that Times editors had deemed tasteless and Murdoch's complaining that too many stories had a leftist bent.

Another former editor said Murdoch once pointed to the byline of a correspondent and asserted, "That man's a Commie."

Fred Emery, another former Times editor, said Murdoch once said to him: "I give instructions to my editors all around the world; why shouldn't I in London?"

The turmoil of those first years subsided, in part, one former Times editor said, because Murdoch got rid of those who did not adhere to his politics.

"He puts people in who will do his bidding," said Neil, the former Sunday Times editor.

The current editor of The Times, Robert Thomson, paints an altogether different picture. "I've had absolutely no interference and a lot of investment in a loss-making newspaper, for which Rupert Murdoch gets no credit," he said.

Under Thomson, the business pages of The Times expanded, and there are now 18 foreign reporters, including 7 in the United States, compared with 8 in all when he came to the paper. The Times is the only British newspaper to keep a bureau in Baghdad.

Over the years, as Murdoch built his empire, he has lusted after The Journal.

In the mid-1980s, he attended a black-tie press dinner in New York and found himself sitting next to Julie Salamon, then The Journal's film critic and a former New York Times reporter. She vividly recalls his fascination with the inner workings of the newspaper and said he clearly expressed his desire to own it someday.

Salamon initially dismissed Murdoch. "The idea of this tabloid guy buying The Journal, which was then at the zenith of its success, seemed preposterous," she said.

But by the end of the meal, impressed by Murdoch's canny sense of the American media landscape, Salamon said, "I went home with a funny feeling in the pit of my stomach, like this guy might actually do it."

Rupert Murdoch, empire builder, still playing to win

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August 2, 2007 -- Overlooking Ground Zero in the heart of New York's financial district, Dow Jones's head office was buzzing with chatter and speculation yesterday about life under the company's imminent new owner. Rupert Murdoch's $5.6bn (£2.8bn) takeover of the Wall Street Journal's publisher prompted a mixture of resignation and angst, with frustration that so many members of the Bancroft family had accepted News Corporation's money.

The liberal pressure group MoveOn.org handed out spoof editions of the Journal bearing genuine headlines from News Corporation's Fox News network. Lead stories asked "Is the liberal media helping to fuel terror?" and "All-out civil war in Iraq: could it be a good thing?" MoveOn's Adam Green said: "We want to put Rupert Murdoch on notice that if he turns the Journal into the same unreliable, partisan media outlet that Fox is, people will no longer trust the newspaper."

Outside the Dow Jones building, views were mixed. Mark Wauben, art director of Dow Jones's Barron's business magazine, said: "I'm upbeat about it myself. We'll probably have a lot more resources - we'll be part of a conglomerate as opposed to a corporation." But a graphic designer on the Journal predicted some of his colleagues would be contacting headhunters to find new jobs: "Not many people in the newsroom are happy. Rupert Murdoch blurs the line between what is truth and what is entertainment."

The agreement brought to an end three months of wrangling involving the Journal's controlling Bancroft family. Mr Murdoch's audacious bid also prompted debates around the world about the prospects of editorial independence surviving at the paper. Parallels were drawn with the Times and Sunday Times, which many observers say have faced editorial meddling by Mr Murdoch since he bought the papers in 1981 despite an independent editorial board.

One of his pledges to the Bancrofts was to create a similar structure for Dow Jones. Yesterday, News Corp announced the inaugural five members of Dow Jones's "special committee", including the retired Associated Press chief executive Louis Boccardi.

The media conglomerate also confirmed it will appoint a member of the Bancroft family or another mutually acceptable person to the News Corp board of directors once the deal goes through - which is expected to be by the end of the year.

The Bancrofts have pledged 37% of Dow Jones's stock to News Corp, securing Murdoch a majority and ending more than a century of stewardship of the group. The sale brings a total windfall of more than $1bn to the descendants of Clarence Barron, who bought joint control of Dow Jones in 1902.

The offer of $60 a share was viewed by many as too high to refuse but a number of family members opposed the deal. A spokesperson for the Bancrofts described deliberations as "long, complex and arduous" and said their votes followed "much soul-searching, hard work and analysis". The family had spent a week considering the offer after the board recommended it to shareholders.

Newspaper heir Dieter von Holtzbrinck stepped down from the board in protest. On Tuesday another board member, Bancroft family member Leslie Hill, also quit. She said that the financial benefits failed to outweigh "the loss of an independent global news organisation with unmatched credibility and integrity".

Her relative Elisabeth Goth Chelberg did not agree. "On the one hand it is quite sad, but on the other it was the only reasonable thing to do," she told the Journal. "Now I look forward to a better Dow Jones. It's going to have more money and a world presence and all of the things that it could have and should have had but didn't."

Mr Murdoch said he was "deeply gratified" at the level of support from the Bancroft family and its trustees. "The Wall Street Journal and the other Dow Jones operations will be even more formidable competitors as we profitably extend their invaluable information across our print, broadcast and digital platforms around the world."

Mr Murdoch can be expected to invest in editorial content. John Morton, a media analyst, said Dow Jones had been scaling back the Journal's European and Asian editions - a decision likely to be reversed by Mr Murdoch.

Any changes in editorial direction should be subtle. "It'll be a question of what the Journal doesn't cover, rather than what it does," Mr Morton said. "I suspect the Journal has won the last Pulitzer prize it's going to get for coverage of China."

Roll call: Will editorial integrity be protected?

Against a backdrop of bleak predictions of editorial meddling from Mr Murdoch, one the media mogul's key pledges to the Journal's staff and its controlling Bancroft family was to create a special committee on editorial independence and integrity. The committee - whose members will be independent of the News Corporation, Dow Jones, the Murdoch family and the Bancroft family - must approve the hiring and firing of editors. Its first five members predominantly come from media backgrounds. They are retired chief executive of the Associated Press newswire, Louis Boccardi; Nicholas Negroponte, founder of One Laptop Per Child initiative to provide computers for children in developing countries; Pulitzer prize-winner Jack Fuller, a former president of Tribune Publishing, who was once editor of the Chicago Tribune; former Washington State Congresswoman Jennifer Dunn and former Detroit News editorial page editor Thomas Bray, who is also a writer for Dow Jones's OpinionJournal.com. Mr Bray will reportedly chair the committee. The creation of the committee provoked mixed responses. In her resignation letter to Dow Jones's board this week, Bancroft family member Leslie Hill wrote: "I do not believe that a special committee could ever be a match for true independence."

Dow Jones braces for Murdoch

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December 5, 2007 -- Rupert Murdoch is out to prove that you can serve God and mammon after all. The media tycoon's Fox Entertainment has bought Beliefnet, the largest online faith and spirituality network.

The site is a portal that includes interviews with celebrities and politicians, social networking tools, blogs, inspirational stories, sacred text searches and views from teachers and preachers. Discussion boards carry topics such as "Can inter-faith dating work?" and "Extreme abstinence". Beliefnet was founded in 1999 and the company claims to have 3 million unique visitors a month and nearly 11 million subscribers to a daily email newsletter. Beliefnet provides content across a broad range of faiths. For the undecided, it offers Belief-O-Matic, a questionnaire that helps to find which religion best defines people. One question seeks to establish the reader's view of God; is there only one God (corporeal or incorporeal), a supreme force or multiple gods? Another poses a question about the origins of life - the six options include a literal interpretation of Genesis, that God created the earth in seven days; a non-literal interpretation; and Darwin's world view of evolution.

Murdoch has described himself as a "practising Christian" who goes to church "quite a bit". He has been evangelical about the internet since buying MySpace for $580m (£330m) in 2005.

Fox said the network would give the company an online platform to distribute faith-based programming from 20th Century Fox Home Entertainment; plus products from other parts of Murdoch's News Corporation family, including Harper Collins's Zondervan imprint, which specialises in Christian books, and HarperOne, which publishes a selection of religious and spirituality titles.

At the same time, Beliefnet will provide faith-based programming for other parts of News Corp.

The market for religious goods and services is growing. According to the Pew Internet Project, more than 82 million Americans and 64% of all internet users go online for faith-related matters. Research cited by Fox suggests the market for religious books, DVDs and software is worth more than $8bn.

Beliefnet was founded by a former Newsweek journalist, Steven Waldman. It suffered the fate of many dotcoms launched in the late 90s and filed for bankruptcy protection in 2002.

Lo, Murdoch did bring the good news and stored up riches on earth

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