Anyone but Rupert Murdoch might have been shamefaced over an article that appeared March 9 in his New York Post.
Here’s an old article that WhoWhatWhy editor Russ Baker wrote about Rupert Murdoch, the media titan whose News Corp is currently the focus of so much controversy. This ran in the Columbia Journalism Review in 1998. But it is useful for comparing the company’s (non-hacking) practices, then and now.
by Russ Baker
If there was ever an enterprise that needed a Chinese wall — in this case literally — it is Rupert Murdoch’s News Corp. Yet the very concept of such a wall, meant to protect one part of a large conglomerate from the depredations of another, seems foreign to News Corp’s chief. Rupert’s Rule appears to be that all lines are permeable. And the notion of synergy, so logical and beneficial in many commercial enterprises, takes on a cynical and even malevolent cast when the corporation is a multimedia empire with Murdoch at the helm. This is particularly so in view of News Corp.’s recent boast that through its satellite, broadcast, and cable units, it will soon be able to reach more than three-quarters of the wired world.
Murdoch uses his diverse holdings, which include newspapers, magazines, sports teams, a movie studio, and a book publisher, to promote his own financial interests at the expense of real newsgathering, legal and regulatory rules, and journalistic ethics. He wields his media as instruments of influence with politicians who can aid him, and savages his competitors in his news columns. If ever someone demonstrated the dangers of mass power being concentrated in few hands, it would be Murdoch.
To understand the effects of Murdoch’s special brand of synergy, one must begin where it all began for Keith Rupert Murdoch — in Australia. Down under, Murdoch owns half of a major airline group, co-owns one of the country’s pay TV operators and a Rugby league, and controls more than 60 percent of the country’s metro, regional, and suburban newspapers, from an upscale national broadsheet, The Australian, to mass-market daily tabloids.
Murdoch’s taste for corporate cross-pollination was never more apparent than on March 3, 1995, when readers of his hometown paper, TheAdelaide Advertiser, might understandably have mistaken the front page for a paid ad. An article told them they could soon enjoy the most advanced pay television channel in the world, including sports and the latest releases from Twentieth Century Fox; it was a “gateway to a new era.” The newspaper neglected to mention that many of the same movies had already been shown on free channels. Murdoch’s other Australian papers ran similar, ad-style copy. The Herald-Sun of Melbourne headlined, finally, a clear vision on pay TV. Then, the paper cheekily asked readers to call in on its “Vote Line,” and answer the question, “Do you plan to subscribe to pay TV?” (The paper then actually charged for each incoming call). Even Murdoch’s quality paper, The Australian, ran eleven full pages on the non-story.
A Murdoch financial columnist went as far as to advise readers to buy stock of News Corp., claiming both objectivity and insight. “I do have that insider’s advantage of knowing what’s it all about,” wrote Terry McCrann in the Daily Times-Mirror of Sydney. Four days later, he popped up in Murdoch’s Adelaide Sunday Mail interviewing the boss: “You’ve certainly led one of the most extraordinary lives in the twentieth century and it’s been entirely of your own making. Can you accept the accolade that you are probably the most remarkable Australian in about 200 years?” “Oh, I don’t believe that for a minute,” a modest Murdoch demurred.
Over the years, a feisty dialogue over Murdoch’s methods has grown, and not only in Australia. In England, the decision not to publish Chris Patten’s book critical of the Chinese sparked an unexpected revolt. British papers jumped on the story with gusto. Their readers learned of a “smoking memo” in which HarperCollins UK chairman Eddie Bell revealed that “KRM [Keith Rupert Murdoch] has outlined to me the negative aspects of publication.” The Daily Telegraph, The Independent, The Guardian, and many other papers also reported that the literary editor who handled the book had left the company and sued over it.
But Murdoch’s British papers, including his flagship, The Times of London, ignored the story — until their ostrich act became the story. Then, they concentrated on putting out Murdoch’s version of events, a rendition that lacked credibility. Meanwhile, it emerged that the recently retired East Asia editor of The Times, Jonathan Mirsky, had told a January Freedom Forum gathering that the paper “has simply decided, because of Murdoch’s interests, not to cover China in a serious way.” Mirsky also said that he has a transcript of a 1997 conversation between The Times‘s editor, Peter Stothard, and the Chinese vice premier in which Stothard apologizes for having inquired about a Chinese dissident.
Murdoch’s British tabloid, The Sun, recently reversed its opposition to the controversial Millennium Dome — an enormous exhibition hall (“the world’s largest dome”) to be built in London — after Murdoch’s British Sky Broadcasting (BSkyB) satellite service became a key investor. The English reading public had seen this before. Murdoch’s firing of editors Harold Evans of The Times (in 1982) and Andrew Neil of the Sunday Times (in 1994) were both widely felt to be over reporting by the papers that angered the Tory governments — during a period when government decisions were massively enriching the tycoon.
This press lord uses some of his media outlets for more than simple financial gain. HarperCollins has repeatedly paid stunning book advances to public figures who can be — or have been — enormously helpful on the political front. Since such books rarely earn back their advances, they appear to be outright gifts — or worse. HarperCollins, for instance, offered a $4.5 million book advance to U.S. House Speaker Newt Gingrich (who renounced part of it under withering criticism) while major telecommunications legislation was before Congress.
During the regimes of Prime Ministers Margaret Thatcher and John Major in Britain, Murdoch ventures — especially his purchase of newspapers and the launch of his BSkyB service — were repeatedly favored with easing of regulations and with government failure to invoke monopoly oversight. Murdoch’s papers, in turn, played a central role in bolstering Thatcher’s career and virulently attacked her opponents. Thatcher’s memoirs, for which she is believed to have accepted at least $3 million, were published by HarperCollins. John Major, too, is believed to have accepted a seven-figure advance from Murdoch. Now there is talk that a coalition of other publishing companies should jointly outbid Murdoch for Prime Minister Tony Blair’s future memoirs, in an effort to blunt News Corp.’s influence with the Laborite, which is already strong.
In the United States, Murdoch’s percentage of media ownership is lower (except for television) than in England and Australia, but his influence and reach are growing quickly. His U.S. properties include Twentieth Century Fox, HarperCollins, TV Guide, the New York Post, Fox Broadcasting, Fox News Channel, Fox Sports Net, The Weekly Standard, and television stations in New York (WNYW), Washington (WTTG), Los Angeles (KTTV), Philadelphia (WTXF), Chicago (WFLD), Atlanta (WAGA), Boston (WFXT), Phoenix (KSAZ), and fourteen other cities.
“His company has grown so rapidly I’m not sure people have stopped to look at how he got where he is,” says Washington Post staff writer Paul Farhi. Late last year, theWashington Post front-paged Farhi’s examination of possible accounting sleight of hand by News Corp. The article explored ways the company, which is run chiefly from Los Angeles and New York but calls Australia its corporate headquarters, is able to use that country’s arcane accounting methods to turn a potential net loss of $155 million (under tough U.S. standards) into a gain of $561 million — thereby enabling acquisition binges. Ironically, while putting the best face on its financial fortunes, News Corp. has been able to keep its worldwide corporate tax rates surprisingly low (roughly one-fifth those paid by Disney, Time Warner, and Viacom), largely by shifting income through an almost unfathomable web to low-tax and no-tax havens in places as far-flung as the Cayman Islands, Fiji, and even Cuba. Virtually no other media organizations followed up on this story.
Farhi says that when he began his own reporting, he found that no one would talk to him — not even Murdoch’s competitors. Similarly, CJR found competitors refusing to speak for the record. Some noted ruefully how the range of possible employers has narrowed with media consolidation.
Americans know little about Murdoch. And no wonder. In the U.S., he truly has been the Teflon man. When the $4.5 million advance to Gingrich became public, nearly all of the criticism was leveled at Gingrich, not the publishing company, which was willing to pay far more than seemed to make business sense. The story that News Corp. had hidden from the Federal Communications Commission the extent of its ownership of Fox in 1985, when that company began assembling a new television network, also got relatively little play.
Not much has been reported on the wide range of loopholes, operating waivers, and other gambits employed by News Corp. in its U.S. television expansion. One was getting around former FCC rules limiting the number of stations owned to twelve by investing in — and thus influencing — some twice that number. Staffers departed from Murdoch’s employ, miraculously reappearing as managers at the stations he technically did not control. Another was receiving unusual permission to provide National Football League broadcasts to border-region Mexican television stations that beam those games back into the United States.
Murdoch employees seldom express the sort of skepticism of bosses common among journalists. That’s a stark contrast, for example, to the atmosphere at the New York Post‘s cross-town rival, the Daily News, where some employees openly exhibit disdain for owner Mortimer Zuckerman and his trademark fickleness and incessant meddling. SaysPost reporter Gersh Kuntzman of Murdoch: “In the newsroom, everyone loves him. He’s really charismatic, a very intelligent person. Not just a figurehead.”
So dynamic and larger-than-life is Murdoch that even top people who are fired by him (almost always through intermediaries) continue to hymn his virtues. Says David Salter, longtime executive producer of the Australian Broadcasting Company’s program, Media Watch: “His executives fall over each other trying to out-praise his business acumen and flair, conveniently forgetting that not so long ago the whole News Corporation empire was one tiny financial heartbeat away from total collapse. How that unique News Corp. culture has been developed and sustained is one of the enduring mysteries.”
Another factor is that many employees enjoy working at Murdoch’s freewheeling tabloid properties, both for the sheer Front Page exuberance and for a general sense that the company takes care of its employees. Almost no one except the highest-ranking editors ever experiences direct interference from Murdoch. Harold Evans, forced out as editor ofThe Times of London, said in his memoirs that critics were wrong in suggesting that Murdoch was dictating language to his editors. “He is not a miniaturist,” Evans wrote. “He creates an aura.” Murdoch makes his wishes known, according to Evans, by constantly disparaging politicians or others he doesn’t like, generally criticizing articles (“Now what do you want to do that for?”), and sending along screeds from other publications, often right-wing magazines, with notes like “Worth reading!” The message is unmistakable.
Jetting from one continent to another and working the phones incessantly, Murdoch does maintain a constant personal presence among his top editors and producers. Kuntzman, a popular Post reporter who says he loves his job and isn’t pressured on what he writes, nevertheless points to page two, which is internally referred to as the “Pravda Page.” Says he: “When there’s a major [Murdoch] business deal going down, with no interest to readers, it’s on page two. Or when [Senator Alfonse] D’Amato [a Murdoch favorite] makes a pronouncement of no particular interest to readers, it’s on page two. Maybe our editor, Ken Chandler, is trying to catch Murdoch’s eye.”
Murdoch did what he could to prevent Bill Clinton’s election in 1992, including running stories in his British papers, which were then picked up and published stateside (“blowback” in espionage argot) about matters like Clinton’s visit to Moscow during his college days. Since 1992, the New York Post has often taken the lead in initiating and running with leaks, tips, and speculation about Clinton, especially on the wild question of whether Vincent Foster was murdered, and examinations of Clinton’s personal behavior.Post editors, employing a favorite Murdoch technique, use headlines to indict when the material in the article is itself inconclusive. (“Caught in the Act” was one early header in both the Post and the Daily News during the Monica Lewinsky saga.) Post reporters were so weary of their relentless coverage of Clinton scandals that when word came that a judge had thrown out the Paula Jones case, a cheer rose in the newsroom.
Clinton’s FCC, unlike those of the Reagan and Bush eras, has at least made Murdoch sweat by reviewing the circumstances under which he was able to assemble the Fox network. “He can get more done with a Republican administration, whether it’s FCC approvals, environmental concerns, or trade issues,” says former Post editor Lou Colasuonno.
Here again, his years of courting Republicans has paid off. After ten years of indifference, the FCC looked at Fox Television in 1994 to see if it was foreign-owned (Murdoch became a U.S. citizen although his company is registered in Australia). Conservative Republicans, who might otherwise have opposed foreign ownership, instead attacked the FCC. “They lambasted me for the audacity of having looked into the question,” recalls former FCC chair Reed Hundt. (Consistent with Murdoch’s good fortune, the panel, led by the GOP appointees, ultimately voted with Murdoch.)
Another target of Murdoch, historically, has been the Kennedy family. A big factor in his disdain was Senator Ted Kennedy’s sponsorship of legislation that forced him to sell his beloved Post in 1988 because of his cross-ownership of the local New York television station, WNYW. His bitterness toward Kennedy seemed to ease when Kennedy, of all people, backed his right to re-purchase the Post in 1993 on the basis that the Post might otherwise fold. Soon after he regained the Post, Murdoch bought back his Boston television station after selling his Kennedy-tormenting Boston Herald, raising questions in some minds about a quid pro quo.
In New York City politics, Murdoch’s power is legendary. “Murdoch created Ed Koch as mayor, and they had a very good relationship,” says Dick Belsky, city editor during Murdoch’s first round of Post ownership. Murdoch’s influence waned somewhat during the tenure of Mayor David Dinkins, whom the Post relentlessly attacked. His successor, Rudy Giuliani, has felt the full force of Murdoch’s favor on both the editorial and news pages.
During Giuliani’s first term, News Corp. received a $20.7 million tax break for the mid-Manhattan office building that houses the Post, Fox News Channel, TV Guide and other operations. During Giuliani’s 1997 reelection campaign, News Corp. was also angling for hefty city tax breaks and other incentives to set up a new printing plant in New York City rather than move to New Jersey. Most dramatically, Giuliani jumped in to aggressively champion News Corp. when it battled Time Warner over a slot for the Fox News Channel on Time Warner’s local cable system. (Beyond the existing synergy, the mayor’s wife, Donna Hanover, is a correspondent on the local Fox TV station, WNYW. )
Three years into Giuliani’s first term, veteran Village Voice political reporter Wayne Barrett asked Post editorial page editor Eric Breindel if the paper had run a single editorial critical of the administration; Breindel, he says, admitted it had not. According to Barrett, the paper pulled off a perfect four-year streak before finding disagreement with the mayor late last year — over his harsh treatment of a fiscally conservative business-funded “watchdog” organization that investigates waste in government.
“It’s not only what they write, it’s what they won’t write, what they won’t say,” argues Barrett. The Post, for example, has not run any major stories about a serious conflict involving top Giuliani political advisers Raymond Harding and Herman Badillo lobbying city agencies for private clients of their law firm. By comparison, the Daily News — whose owner Zuckerman is a Giuliani loyalist with real estate projects before the city and who has saved millions based on Giuliani administration decisions — has run more than a dozen stories on the Harding-Badillo situation. And when Vanity Fair published a story about the mayor’s seemingly rocky marriage and closeness to his female communications director — a scandal of the sort the Post typically loves — the paper took off after Vanity Fair with the energy and enthusiasm of a converted sinner.
Almost completely absent are stories highlighting problems in the police department, in the mayor’s workfare program, in social services. “Nobody is doing enterprise stories in those areas,” says a former reporter. “They don’t want it.” Any negative stories about the administration tend to be about bureaucracy stepping on the little guy. The mayor is usually a bystander, as outraged as anyone.
In playing political hardball with his news columns, Murdoch is guilty of degree rather than kind. Many media barons do it, but with more decorum and finesse. In other areas, however, Murdoch seems to stand almost alone, and very exposed. One obvious Murdoch trademark is his use of bathing beauties and sex to sell copies, a tendency that has even afflicted the once-staid TV Guide. Another is race-baiting. During the interregnum, when Murdoch did not own the Post, that paper’s tendency to inflame racial passions in New York diminished remarkably. But Murdoch is back in force. “The one enduring theme at the Post is exposing the bad Negro wherever he or she may be,” says Jim Dwyer, a Pulitzer Prize-winning columnist at the arch-rival Daily News.
One variation appeared in a Post editorial last December 3. Titled “john hopeless franklin,” it was a vicious attack on eighty-three-year-old John Hope Franklin, the eminent black historian whom President Clinton named to head his advisory commission on race. Franklin had had the effrontery to speak about the notion of white superiority following the Civil War and the country’s failure to confront “its own Holocaust, its own violence.” ThePost labeled this “a slander against the United States and its white citizens,” and ended with the words: “Now it’s long past time for him to shut the hell up.”
Murdoch’s personal conservatism does not necessarily make him an exemplar of political principle. He is at heart a man who knows which way the winds blow. For a staunch anti-communist, Murdoch’s China policy represents a stunning display of pragmatism in service of the bottom line. He moves effortlessly between Republicans and Democrats, Tories and Laborites, capitalists and communists, depending on what deals are cooking. For a time in the 1980s, Murdoch owned the left-leaning Village Voice and had the good sense not to trifle with the profitable weekly. Like Richard Nixon, whom he greatly admired, Murdoch talks an anti-establishment line that belies his real interests. (He also fosters an up-by-the-bootstraps image that hardly squares with a childhood of privilege as son of a wealthy, titled Australian newspaper owner.)
His protean tactics make competing with Murdoch a bewildering and frustrating experience. Only one thing is certain: marshaling all the means at his disposal, he plays to win. Of course, plenty of News Corp. staffers strive to produce quality journalism. Yet those who so aspire face a tough challenge when opportunities for intra-corporation backscratching present themselves. When the Chris Patten book flap erupted, The NewYork Times and the Daily News reported the uproar and ensuing revolt by some of HarperCollins’s other authors. But the Post, known for intensively covering publishing, ran nothing.
At the same time, the launch of Murdoch’s Fox News Channel (FNC) was treated in thePost with the same sort of urgency as his Australian Pay TV launch in his Australian papers. When FNC was told by Time Warner that the New York City cable position it expected would go instead to MSNBC, Murdoch filed suit. Giuliani intervened on his behalf, on the ground that FNC meant jobs for New York. The Post, too, swung into action. Day after day, it ran headlines, gossip items, and cartoons that alternately tweaked and slammed Time Warner vice chairman Ted Turner (who once intemperately compared Murdoch to Hitler).
“The paper was going beyond news you can use or even care about, and settling a personal score,” says a former reporter. Ex-Post editor Lou Colasuonno agrees. “Time Warner employs about 12,000 people in New York, far more than Fox will ever employ. It was complete nonsense, the way he used the Post as a club to the beat the issue to death, for his own monetary gain. He needed that market.”
Some staffers were embarrassed (but not really surprised) when the Post played the FNC’s New York City launch party as big news, even though its own readers couldn’t see the station on their cable systems. “A lot of it was just understood, if there’s something big involving Murdoch, somebody’s going,” says a former reporter. “Any event concerning Murdoch was covered disproportionately with its newsworthiness. We’d run, for example, fluff items any time Murdoch got an award.” By contrast, a regular column devoted to skewering The New York Times — secretly enjoyed by many a journalist elsewhere — is not only self-serving but also a classic pot-calling-the-kettle situation.
And it is easy to see how the Post positions the financial fortunes of News Corp. and its competitors for the consumption of its heavy Wall Street readership. In its February 5 media business section, one headline reads “News corp. posts 23 percent earnings rise” and is accompanied by a box putting News Corp. alongside competitors that are faring poorly, rather than those that are doing well. Next to this is an article about The NewYork Times cutting its suburban price, in a move termed “ganging up on small suburban papers,” although the Post‘s aggressive price-cutting is never couched in such terms. The article, headlined “Prodigal times pares stand price in ‘burbs,” waits eleven paragraphs before noting that the New York Times Company’s just-released earnings report showed profits more than tripled during 1997.
That same issue of the Post was chock full with self-promotional material, including an article on a billboard that has gone up in Times Square promoting Fox’s show, King of the Hill, and plugs for Fox TV specials, which are variously described as “jaw-dropping,” “megasuccessful,” and “highly anticipated,” while shows from other networks earn less-effusive wordplay.
Titanic had unsurpassed popularity and revenues, yet the coverage in the Post still managed to seem excessive. The paper invented endless ways to run articles about the movie (often more than one) almost every day in the period preceding the Academy Awards. This saturation presumably also had a salutary affect on the legions of Wall Streeters who read the Post and judge News Corp. stock’s worthiness.
Covering Advance Publications’s sale of its Random House unit to Bertelsmann, the Posttook an opportunity to slam Harold Evans, former president and publisher of Random House and Murdoch ex-employee, who is now editorial director overseeing the Post’s competitor, the Daily News. The story called him “poster boy for high-spending perks and excessive book deals that flopped.” It used words like “blew,” “failed,” “squandered” while presenting in neutral terms HarperCollins’s $270 million writeoff and drastic publishing schedule cuts and staff firings.
The paper does sometimes report negative news about Murdoch that appears in competing publications. Says a former editor about a reported 1996 raid of News Corp. offices by Israeli authorities looking into whether a Murdoch-controlled company had tried to evade taxes on $150 million in income: “When Rupert was in trouble in Israel with that tax stuff, we’d pick up the wires and not spin it.”
On February 26, the Post‘s TVPlus section ran four short news items — one noting problems at competing cable outlets (Time Warner’s Court TV and NBC’s CNBC), and the other three putting a positive spin on Fox. One item mentioned that several players on Fox’s Melrose Place would be leaving, “part of an attempt by producers to focus on the show’s core cast,” ignoring that the program’s popularity has plummeted and that several of those leaving were core cast. Another item reported that FX (a network that is 50 percent owned by Murdoch) “has snagged the syndicated repeat rights to WB’s hit drama, Buffy the Vampire Slayer.” It went on to point out — or perhaps prod viewers — that FX “is still not available to Time Warner subscribers in New York” and that they are also missing out on reruns of The X-Files and NYPD Blue.
Fox products are peppered throughout the paper. Gossip columnist Liz Smith, for example, often incorporates News Corp. in seemingly tortured ways, such as this mention of two different News Corp. entities in one gratuitous sentence: “I was reading the morning papers in the Fox-TV/Channel 5 green room when in trooped Alex Linz, Fox [Network]‘s replacement for Macaulay Culkin in the studio’s new Home Alone 3.”
Murdoch has opened a new front of corporate synergy with his purchase of the Los Angeles Dodgers. Before agreeing to it, owners of other teams expressed worries that, with his deep pockets, he can afford to woo top players with salaries that will contribute to the spiraling costs that have endangered bottom lines and antagonized fans. Rumors that Murdoch will pick up a stake in the Los Angeles Lakers and a new hockey stadium can only provoke additional concern.
TV Guide, which Murdoch bought in 1988 (along with Seventeen and The Racing Form) for a mind-boggling $3 billion, has 9.8 million subscribers, way down from a peak of 20 million in 1977. But it remains a strong influence on viewers. Last year TV Guidenamed Fox’s King of the Hill the best show on television. Few critics would agree. Within several months last year TV Guide ran three covers on Fox’s Mighty Morphin Power Rangers, three on The X-Files, and a Simpsons Collector’s Edition. In the Simpsons issue, the Cheers & Jeers feature offered one cheer and three jeers. The cheer? A Fox show. In its designation over the last three years of “The Best Show You’re Not Watching” two of the three were either Fox Network (Party of Five) or 20th Century Fox Television (ABC’s The Practice). TV Guide has editorialized in favor of age-based instead of content-based ratings, which would benefit Fox because of the amount of violence in its programming.
TV Guide editors did not return CJR‘s phone calls, but Ari Karpel, editorial publicity director for the magazine, says that “isolated examples can ‘prove’ our slanted support for any network, but a careful reading of the past few years of TV Guide would reveal that we praise and criticize Fox shows with the same frequency with which we praise and criticize shows on every network.” Brian Lowry, who covers television business for theLos Angeles Times, says that “periodically, there is some handwringing [by Fox competitors] over TV Guide playing favorites at Fox, followed by loud protestations and a cover on whatever network complained. Some network execs say they complain aboutTV Guide just to keep them in line.”
Murdoch’s behavior has some competitors up in arms. Says NBC’s colorful West Coast president Don Ohlmeyer, who is regularly held up to ridicule in the New York Post: “Until the rest of the media decide to take a hard look at Rupert’s empire the way his media look at other people’s empires, he’s won. People genuinely fear him, and that’s a good position to be in in this business.”
Murdoch’s Citizen Kane model isn’t going away. At sixty-seven, he’s preparing a new generation to take over his domain. Will his heirs prove to have the man’s heart? Or will they miraculously take heed of the words of the late Roy Thomson, Murdoch’s predecessor as owner of The Times and Sunday Times. Thomson, whose son sold the money-losing Times to Murdoch, was so regularly beset by angry politicians over his papers’ independent spirit that he had his credo set down on cards he would hand out, explaining that he just wasn’t involved with what his employees wrote: “[N]o person or group can buy or influence editorial support . . . I do not believe that a newspaper can be run properly unless its editorial columns are run freely and independently by a highly skilled and educated professional journalist.”