A century of Bancroft-family ownership at Dow Jones & Co. is over.
Rupert Murdoch's News Corp. sealed a $5 billion agreement to purchase the publisher of The Wall Street Journal after three months of drama in the controlling family and public debate about journalistic values.
One of the oldest and best-known franchises in the newspaper industry, beset in recent years by business pressures, now enters a new era as part of a world-wide media conglomerate. The 76-year-old Mr. Murdoch, whose properties range from the Fox television network to the Times of London, negotiated hard to win the paper he long coveted. He has promised to invest more in Dow Jones journalism.
Another WSJ article called " A New Owner", discusses the paper and their hopes for it. One more from Opinion Journal here.
NewsBusters shows us some very negative reactions from a variety of sources.
The buzz shows a variety of reactions in the blogosphere.
Now, why is this so upsetting to liberals?
Lets take a look at Rupert Murdoch and the building of his empire, from Wiki:
Building the Empire
Acquisitions in Britain
Murdoch expanded to Britain in 1968. He succeeded in beating rival publisher Robert Maxwell in securing The News of the World, which had been the most popular English language newspaper in the world, claiming a peak circulation of 8,441,966 in 1950. By 1968, the circulation had dropped to around six million and a substantial number of its shares were offered for sale by a member of the Carr family, which had part-owned and managed the company for nearly seventy years.
It was also the first time Murdoch risked the whole business he had already created on the outcome of a new venture, for he mortgaged the most valuable of his existing Australian properties to buy the paper with a promise that he would share control with the existing Carr management. Upon succeeding, Murdoch not only controlled News of the World but had then completely regained full ownership of all his Australian assets.
When the daily newspaper The Sun entered the market in 1969, Murdoch acquired and converted it into a tabloid format, which by 2006 was selling three million copies per day.
Murdoch later acquired The Times, the paper his father's mentor, Viscount Northcliffe, had once owned. The distinction of owning The Times came to him through his careful cultivation of the owner who had grown tired of losing money on the property.
During the 1980s and early 90s, Murdoch's publications were generally supportive of the UK Prime Minister Margaret Thatcher.
At the end of the Thatcher/Major era, Murdoch switched his support to Labour and the party's leader Tony Blair. The closeness of his relationship with Blair and their secret meetings to discuss national policies was to become a political issue in Britain.
In 1986, Murdoch introduced electronic production processes to his newspapers in Australia, Britain, and the United States. This led to significant reductions in the number of employees involved in the printing process due to the greater role of automation. In England, the move aroused the anger of the print unions, resulting in a long and often violent dispute fought in London's docklands area of Wapping, where Murdoch had installed the very latest electronic newspaper publishing factory in an old warehouse. The unions had assumed that Murdoch intended to launch a new newspaper from those premises but he had kept as a surprise his intention to relocate all News titles there. Once the Wapping battle had ended, union opposition in Australia followed suit. Today, most newspapers around the world are produced using his method, due to the increased profit involved in the automation of the process.
News has subsidiaries in the Bahamas, the Cayman Islands, the Channel Islands and the Virgin Islands. From 1986 News Corporation's annual tax bill averaged around seven percent of profits.
Moving into the United States
Murdoch made his first acquisition in the United States in 1973, when he purchased the San Antonio Express-News. Soon afterwards, he founded Star, a supermarket tabloid, and in 1976, he purchased the New York Post. On September 4, 1985, Murdoch became a naturalized citizen, to satisfy the legal requirement that only US citizens could own American television stations. In 1987, in Australia, he bought The Herald and Weekly Times Ltd., the company that his father had once managed. By 1991, his Australian-based News Corp. had amassed huge debts, which forced Murdoch to sell many of the American magazine interests he had acquired in the mid-80s. Much of this debt came from his British-based satellite network Sky Television, which incurred massive losses in its early years of operation, which (like many of his business interests) was heavily subsidized with profits from his other holdings, until he was able to force rival satellite operator British Satellite Broadcasting to accept a merger on his terms in 1990. (The merged company, BSkyB, has dominated the British pay-TV market ever since.)
In 1995, Murdoch's Fox Network became the object of scrutiny from the Federal Communications Commission (FCC), when it was alleged that News Ltd.'s Australian base made Murdoch's ownership of Fox illegal. The FCC, however, ruled in Murdoch's favor, stating that his ownership of Fox was in the public's best interests. In the same year, Murdoch announced a deal with MCI Communications to develop a major news website, as well as funding a conservative magazine, The Weekly Standard. In the same year, News Corp. launched the Foxtel pay television network in Australia, in a partnership with Telstra.
In 1996, Murdoch chose to enter the world of cable news with the Fox News Channel, a 24-hour cable news station. Following its launch, the heavily-funded Fox News consistently eroded CNN's market share, and eventually proclaimed itself as "the most-watched cable news channel." This is due in part to recent ratings studies, released in the fourth quarter of 2004, showing that the network had nine of the top ten programs in the "Cable News" category. However, in recent years, its ratings have begun to decline.
In 1999, Murdoch significantly expanded his music holdings in Australia by acquiring the controlling share in a leading Australian independent label, Michael Gudinski's Mushroom Records; he merged that with Festival Records and the result was Festival Mushroom Records (FMR). Both Festival and FMR were managed by Murdoch's son James Murdoch for several years.
Expansion in Asia
Murdoch acquired Star TV from a Hong Kong company in 1993 (Souchou, 2000:28) STAR TV (Asia) and created offices for it throughout Asia, including Singapore, China, India, Pakistan, Vietnam, etc. It is one of the biggest satellite TV networks in Asia.
In late 2003, Murdoch acquired a 34 percent stake in Hughes Electronics, operator of the largest American satellite TV system, DirecTV, from General Motors for $6 billion (USD).
In 2004, Murdoch announced that he was moving News Corp.'s headquarters from Adelaide, Australia to the United States. Choosing a US domicile was designed to ensure that American fund managers could purchase shares in the company in circumstances where many chose not to buy shares in non-US companies. Some analysts believed that News Corp's Australian domicile was leading to the company being undervalued compared with its peers.
On July 20, 2005, News Corp. bought Intermix Media Inc., which held MySpace.com and other popular social networking-themed websites for $580 million USD. On September 11, 2005, News Corp announced that it would buy IGN Entertainment for $650 million (USD).
Rupert Murdoch and Ted Turner have been competitors for quite some time. Murdoch launched the Fox News Channel to compete against Turner's CNN.
In September 2005 the subject of Murdoch's alleged anti-competitive business practices resurfaced when Australian media proprietor Kerry Stokes, owner of the Seven Network, instituted legal action against News Corporation and the PBL organization, headed by Kerry Packer. The suit stems from the 2002 collapse of Stokes' planned cable television channel C7 Sport, which would have been a direct competitor to the other major Australian cable provider, Foxtel, in which News and PBL have major stakes.
Stokes claims that News Corp. and PBL (along with several other media organizations) colluded to force C7 out of business by using undue influence to prevent C7 from gaining vital broadcast rights to major sporting events. In evidence given to the court on 26 September, Stokes alleged that PBL executive James Packer came to his home in December 2000 and warned him that PBL and News Limited were "getting together" to prevent the AFL rights being granted to C7.
Recently, Murdoch has bought out the Turkish TV channel, TGRT, which was previously confiscated by the Turkish Board of Banking Regulations, TMSF. Newspapers report that Murdoch has bought TGRT in a partnership with Turkish recording mogul, Ahmet Ertegün and there are alleged reports that Murdoch has acquired Turkish citizenship to overcome the current obligations against capital sales to foreigners.
Murdoch's shattering experience with Thomas Playford in South Australia (see above: "Start of Business Career") and his early political activities in Australia were to set the pattern he would use around the world for the rest of his life.
Murdoch found a political ally in John McEwen, leader of the Australian Country Party and governing in coalition with the larger Menzies-Holt Liberal Party. From the very first issue of The Australian Murdoch began taking McEwen's side in every issue that divided the long-serving coalition partners. (The Australian, July 15, 1964, first edition front page: “Strain in Cabinet, Liberal-CP row flares.”) It was an issue that threatened to split the coalition government and open the way for the stronger Australian Labor Party to dominate Australian politics. It was the beginning of a long campaign that served McEwen well.
McEwen repaid Murdoch's support later by aiding him to buy his valuable rural property Cavan and then arranged a clever subterfuge by which Murdoch was able to transfer a large sum of money from Australia to England to complete the purchase of The News of the World without obtaining the required authority from the Australian Treasury.
After McEwen and Menzies retired, Murdoch transferred his support to the newly elected Leader of the Australian Labor Party, Gough Whitlam, who was elected in 1972 on a social platform that included universal free health care, free education for all Australians to tertiary level, recognition of the People's Republic of China and public ownership of Australia's oil, gas and mineral resources.
Rupert Murdoch's flirtation with Whitlam turned out to be brief. He had already started his short lived National Star newspaper in America and was seeking to strengthen his political contacts there.
In the US he has been a long-time supporter of the Republican Party and was a friend of Ronald Reagan. Regarding Pat Robertson's 1988 presidential bid, he said, "He's right on all the issues." Many Christian conservatives were dismayed when Robertson sold his television network to Murdoch. Murdoch's papers strongly supported George W. Bush in both the 2000 and 2004 presidential elections.
Murdoch's publications worldwide tend to adopt conservative views. During the buildup to the 2003 invasion of Iraq, all 175 Murdoch-owned newspapers worldwide editorialized in favor of the war. Murdoch also served on the board of directors of the libertarian Cato Institute. News Corp-owned Fox News is often criticized for a strong conservative and anti-liberal bias.
On May 8, 2006, the Financial Times reported that Murdoch would be hosting a fundraiser for Senator Hillary Clinton's (D-New York) Senate reelection campaign. Murdoch's New York Post newspaper opposed Clinton's Senate run in 2000.
In May 2007, Murdoch made a $5 billion offer to purchase Dow Jones, owner of the Wall Street Journal. At the time, the Bancroft family, who controlled 64% of the shares, outspokenly declined the offer, opposing Murdoch's often-used strategy of large employee cuts and "gutting" pre-existing systems. Later, the Bancroft family confirmed a willingness to consider a sale--aside from Murdoch, the Associated Press reported that supermarket billionaire Ron Burkle and Internet entrepreneur Brad Greenspan were among other interested parties. On August 1, 2007, the BBC's "News and World Report"and NPR's Marketplace radio programs reported that Murdoch bought Dow Jones; the news was received with mixed reactions.
In Britain, he formed a close alliance with Margaret Thatcher, and The Sun was widely credited with helping John Major win an unexpected election victory in the 1992 general election. However, in the general elections of 1997, 2001 and 2005, Murdoch's papers were either neutral or supported Labour under Tony Blair. This has led some critics to argue that Murdoch simply supports the incumbent parties (or those who seem most likely to win an upcoming election) in the hope of influencing government decisions that may affect his businesses; though it should be noted that the Labour Party under Blair had moved significantly to the Right on many economic issues prior to 1997. In any case, Murdoch identifies himself as a libertarian.
In a speech in New York, Rupert Murdoch said that the UK Prime Minister Tony Blair said the BBC coverage of the Hurricane Katrina disaster was full of hatred of America. Murdoch is a strong critic of the BBC, which he believes has a liberal bias.
In 1998, Rupert Murdoch made a failed attempt to buy footballing power Manchester United FC. He offered £625 million ($1 billion). It was the biggest amount of money anyone had offered for a sports club. It was rejected by the United Kingdom's Competition Commission, citing that the acquisition would have "hurt competition in the broadcast industry and the quality of British soccer."
On June 28, 2006 the BBC reported that Murdoch and News Corporation are flirting with idea of backing Tory leader David Cameron at the next General Election. However in a recent interview, when asked what he thought of the new Conservative leader, Murdoch replied "Not much".
In 2006, the UK’s Independent newspaper reported that Murdoch is to offer Tony Blair a senior role in his global media company News Corp. when the UK prime minister stands down from office.
Empire indeed. Now for one suggestion to Mr. Murdoch, how about going after the New York Times next?
Tracked back by:
Thoughts on Competition and The Journal from The B from DeMediacratic Nation...