Rupert Murdoch: The untold story

Rupert Murdoch: The untold story. That’s the promise of Inside Rupert’s Brain. And it’s also the lie.

While Rupert Murdoch is just five weeks short of his 79th birthday, the founder, major shareholder, chairman and managing director of the world’s second largest media conglomerate, News Corp, Murdoch shows no signs of slowing down his deal making ability nor of standing aside in favour of his son James. So concludes author Paul R. La Monica.

Editor at Large with CNNMoney.com, La Monica successfully persuades buyers that his book, Inside Rupert’s Brain, forensically investigates News Corp from Rupert’s perspective. It’s when the buyers turn into readers that La Monica becomes unstuck.

What drives Keith Rupert Murdoch? How did the Adelaide News morph into News Corp? Why did he dip his toe into the US satellite pool, only to remove it at lightening speed? Did he erect Fox News Channel - the most watched cable news channel in the United States - for profits or for deeper reasons? Did he overpay the Bancroft family when he bought The Wall Street Journal? Why have two of four of his (pre Wendi Deng) children left News Corp and another never joined the team? If his youngest son James is to succeed him, when will that be?

These and even more interesting questions are raised - but alas not answered - by La Monica as he narrates a commercial history of Murdoch’s wheeling and dealing, that encompasses television (network, cable and satellite) in addition to print publications such as TV Guide, New York magazine, the Daily Mirror, New Idea, (New York’s) Village Voice and sports teams, such as the L.A. Dodgers (he bought) and Manchester United (he was blocked from buying).

La Monica can’t quite decide what he thinks of Mr. Murdoch. He claims that “to be sure, Murdoch has made his share of curious business decisions - strategic moves that have not always panned out the way he, or News Corp shareholders would have liked” and in the very next paragraph La Monica boasts that “another trademark of Murdoch’s career is his willingness to take chances … His decisions have been … often criticised by analysts, investors and insiders of the famously skeptical media. However, Murdoch, more often than not, has had the last laugh.”

Cases in point: October 1986. The debut of Fox Broadcasting Company was met with both scorn and envy by the liberal media and a host of stock analysts who claimed that there was no room for yet another (US) network in addition to the Big Three: ABC, CBS and NBC.

In a few short years, not only did Fox survive, but it has defined our times, as much as a media company can, with its offering of the longest running animated series in history, The Simpsons, the teen soap opera Beverly Hills 90210 and the reality singing contest show, American Idol. The latter show has been such a ratings juggernaut since its launch in 2002 that network executives at rival media companies talk candidly of the futility in programming against it.

Fast-forward ten years to October 1996. Murdoch defied the lord of liberal media, Ted Turner, with the debut of Fox News Channel. Few believed the marketplace was big enough for another 24/7 news channel. While owners of, and foot soldiers in, the liberal media criticised, disparaged and belittled FNC, FNC has grown and grown and now is the most watched cable news channel in the United States. Often with more viewers than the competition combined.

July 2005: Murdoch, not wanting to be left behind in the digital race, writes a cheque for US$580 million to buy MySpace. Like jihadists praying for his obliteration, the critics chanted that he was paying way over the top for the social networking site. After all, they reasoned, MySpace, at two years of age, was barely out of nappies.

But in a matter of three short years Murdoch served his critics one very cold dish. As of January 2008 MySpace had 300 million registered accounts generating an average of 68.6 million unique visitors per month and 43.3 billion page views. When Murdoch bought MySpace in November 2005, registered accounts were 89 per cent lower (at 34 million), unique visitors were 82 per cent lower (at 12.5 million) and page views were 38 per cent lower (at 26.7 billion pages). A few months prior to the January 2008 figures were released, at a Goldman Sachs media conference, Murdoch remarked “you were all laughing at me for buying MySpace. What’s it worth today? It’s worth more than twenty times what I paid for it.”

At the time, Murdoch looked like he was dishing out a whole lot of bravado, valuing MySpace at US$11.6 billion. This estimate however was not too far out of the stadium given Microsoft’s (then) recent purchase of a small part of rival Facebook, valued the latter at US$15 billion. And as Rupert was fond of reminding everyone who’d listen that by comparison with MySpace, “Facebook had fewer users and averaged a lower amount of monthly page views”.