Rupert Murdoch: Protector of the printed word (The Guardian)
James Robinson – The Observer
Rupert Murdoch is often cast as the villain of the newspaper trade, but having revitalised the Wall Street Journal and with his radical plans to charge for access to online papers, he could be the unlikely saviour of the beleaguered industry
Rupert Murdoch is the wizard of Oz. The 78-year-old has spent a lifetime building the world’s most powerful media group, transforming a single antipodean newspaper into an empire that transcends national boundaries. Like his literary equivalent, his power is real, and prime ministers and presidents often seem mesmerised by its potency. But while his newspapers and television holdings give him undoubted influence, his status is magnified many times by the Murdoch myth. He has been a figure on the world stage for so long that his reputation alone is sometimes enough to inhibit the actions of others, whether in the Square Mile, Whitehall or Washington. His views on Europe or on the free market are familiar enough to policy-makers and opinion-formers, so he sometimes finds himself in the happy position of receiving favours without even having to ask for them.
It is a unique arrangement which Murdoch skilfully exploits, but it depends in large part on his continued ability to keep on controlling the news and to make huge amounts of money in the process. Last week, for perhaps the first time, Murdoch came close to admitting that he may not be able to continue doing so unless he radically transforms his business and in the process revolutionises the industry that has made him so powerful.
The 78-year-old media mogul, who controls more than 100 newspapers and dozens of TV channels around the world, has supposedly mellowed of late, a change that many attribute to the influence of his 40-year-old Chinese wife, Wendi Deng, with whom he has two young children. He is sometimes spotted in open-necked shirts and chinos and briefly shared a fashionable Manhattan loft apartment with his third wife before moving back to the wealthy Upper East Side, although he is hardly likely to slip comfortably into retirement. Murdoch is too busy lavishing attention on his latest trophy acquisition, the Wall Street Journal, which he bought in 2007, and winning plaudits for sharpening up the paper’s news coverage, surprising those who feared he might take the paper downmarket.
Newspapers are in Murdoch’s blood. He inherited shares in a small Australian media group, News Ltd, on the death of his father, Keith, in 1952 and became its managing director after graduating from Oxford, using it as a platform to expand across the country and then into the UK and the US. His TV interests make more money, but it is his print portfolio that is dominating Murdoch’s thoughts at present. His titles, which include the Times and the Sun, are facing the biggest challenge in their history, battling falling advertising revenues, down 14% year on year as the worst recession for a generation or more continues to bite.
Like most print products, they are also losing readers and advertisers to the internet and although many consumers are migrating to established newspaper sites, no one has so far figured out how to make money from content that is given away online. That could be about to change, however. Unveiling full-year results at News Corp, the sprawling media giant he chairs, and which owns movie studios and internet site MySpace as well as "old media" assets including papers and TV channels, Murdoch announced on Wednesday that all of his titles will begin charging for online content by June next year.
That represents a stunning rejection of industry orthodoxy, which holds that no one will pay for news-related content online and could prove to be one of the defining moments of Murdoch’s long career. Executives at his UK papers, now run by his 36-year-old son and heir apparent, James, have been working for months on plans to place some premium content beyond the reach of punters who aren’t prepared to pay for it.
It is unclear whether the News of the World, the Sun or Sunday Times and its daily sister title will introduce monthly or annual subscriptions, charge users a few pence per visit or come up with a new business model that competitors have not yet stumbled upon. There is little doubt that the rest of the industry is waiting to see what Murdoch does and will be quick to copy his strategy should his gamble pay off. "I believe that if we’re successful, we’ll be followed fast by other media," Murdoch said last week.
On the face of it, the move seems like a typical piece of Murdoch bravado, an attempt to play a new tune in the expectation that everyone else will dance to it. Media commentator Michael Wolff, who was granted unprecedented access to Murdoch for a 2008 biography, says: "What he is going to do is the thing he has always done: buck convention, offend sensibilities and not pussyfoot around. [That] has pretty much been his method of operation in the media business. By force of will and clarity of position, he defines the world."
Wolff doubts the plan will be a success and argues that Murdoch has alighted on it out of desperation after watching News Corp make the biggest losses in its recent history. "There is no one who produces more news than Rupert. Quantity is what he does. On this basis and with this approach, he is now losing his shirt."
Two of his cash cows, the Sunday Times and News of the World, can no longer make the contribution they once did to the UK newspapers group. The first is loss-making and the "Screws" is making a reduced profit of around £5m. Only the Sun, which saved Murdoch’s burgeoning empire from collapsing under the weight of huge debts in the early 1990s, still makes a significant sum. The tough new conditions have led Murdoch to declare that the era of free news is over, although News Corp insiders say there are still no clear indications about how he intends to persuade people to pay for it.
Other veteran Murdoch-watchers claim the fact he has chosen to flag up his plans for the best part of a year suggests he is uncharacteristically nervous about the step he is about to take. He usually takes the opposition by surprise, cutting the cover price of the Times or the Sun to 10p to boost circulation or, famously, transferring the workforce of his British newspapers to Wapping overnight.
Talking about the plans to charge, Andrew Neil, the former Sunday Times editor, says: "It is a good idea. I think he’s right and it would help if everybody did it." But he adds: "He knows that this will work best if all the main competitors do it."
If some of News International’s content is placed behind a firewall that can be accessed only by consumers brandishing credit cards, competitors could steal a march on Murdoch by continuing to make similar material available free of charge on their own sites. Even if they choose to follow News Corp’s example, the BBC will continue to operate one of the world’s biggest free news sites.
One of the most intriguing aspects of the Murdoch plan is that it has recast him as an industry saviour in the eyes of some of his critics, who previously regarded him as an enemy of the "quality journalism" he now claims he is attempting to rescue. He is still characterised as a ruthless businessman who routinely bends governments to his will in order to pursue his corporate interests and for many on the left, Murdoch is little short of evil incarnate, a foreigner who used his newspapers to brandish unprecedented power over successive administrations. Although his influence may have been exaggerated, it hardly mattered whether it was real or imagined as long as politicians and their advisers believed it was genuine.
Now, however, many who spent decades willing him to fail are praying he succeeds. His reputation in America, where he is reviled by liberals who resent the success of Fox News, has also been rejuvenated, to a degree, by his ownership of the Journal, one of the country’s most respected journalistic institutions.
Martin Dunn, now editor-in-chief of the New York Daily News, but previously a Murdoch executive as editor of Today, says: "Rupert’s reputation was one of absolute dread. Everybody thought he was going to devalue the entire newspaper industry over here. There was that fear amongst journalists at the Journal. The view of most people I’ve talked to is that he’s improved the paper and there is a grudging respect for what he’s done among what I would call the literati of US journalism."
Dunn says Murdoch is one of the few newspaper proprietors who is passionate enough about print to lead an industry effort to save it. "He wants to protect his titles. He is realistic about the problems newspapers face, but at least he’d doing something about it and putting his money where his mouth is".
The sceptics, including Wolff, believe he will fail. "He is certainly swimming against the tide," Murdoch’s biographer said. "Consumers are going to have to pay him per click. It isn’t likely that you will, but Rupert has pulled off upsets before, though this one would be his most astounding."
It would also complete a dramatic transformation from villain to hero. Wolff’s biography of Murdoch is called The Man Who Owns the News, but if he writes a sequel, he may have to call it The Man Who Saved the News. That is an epitaph even Murdoch’s most ardent admirers could not have imagined he would ever lay claim to.
Then below is a report in Rupert Murdoch’s The Times (UK)
Guardian lost £24m in bungled currency trading
GUARDIAN MEDIA GROUP, the owner of The Guardian and The Observer newspapers, lost £24m last year on botched currency trading as it tried to protect hedge-fund investments.
The newspaper publisher, which is considering closing The Observer, the world’s oldest Sunday newspaper, was caught out by the dollar’s rapid rise against sterling which led to a £24m loss.
The investments were made out of a £200m investment fund designed to spread GMG’s risk away from volatile advertising markets.
Sources said the fund was never intended to make a profit in its first year and the losses were the result of a “mark to market” valuation at the end of March. However, the scale of losses from derivatives investments, which contributed to a £90m annual group loss, will alarm its left-leaning readership.
Last week The Sunday Times revealed that GMG could close The Observer as part of a drastic cost-cutting drive. Dummies of a Sunday Guardian newspaper, which it may launch to replace The Observer, are being worked on internally but no decision is expected until next month. Another option considered by the Scott Trust, the charitable foundation that owns GMG, is to convert The Observer into a midweek news magazine.
“Guardian News and Media [the national newspapers and websites division] is conducting a careful and thorough review of all of its operations,” it said. “No decisions have been taken and we will not comment on speculation until we are in a position to talk to our staff about the outcome of the review.”
GMG has also suspended its directors’ performance-related bonus scheme for this financial year. The scheme promises to hand out up to 100% of salary value as a bonus. Carolyn McCall, the chief executive who was paid £498,000, waived her entire bonus entitlement.
Fears over the future of The Observer have led to a campaign being launched on Facebook to save it. Separately, a group of writers, artists and performers including Rory Bremner, Armando Iannucci and Konnie Huq, the former Blue Peter presenter, have written to The Sunday Times to raise their concern.
“It seems unthinkable to us that one liberal newspaper would seek to extinguish another,” they wrote.
The reshaping of the newspaper industry continues in America, where the New York Times Company put the loss-making Boston Globe up for sale last week. Three parties have expressed interest in the Globe but the sums discussed are a fraction of the $1.1 billion (£659m) The New York Times paid for the paper in 1993.
The California-based buyout house Platinum Equity, which bought the San Diego Union-Tribune in May, is reported to have submitted a bid of only $35m, plus the assumption of $59m in pension liabilities. The auction is being run by Goldman Sachs.