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”.

Colourfully recounting the various wheeling and dealing that Murdoch involved himself, concentrating on the last 20 years, the author hints at Murdoch’s nous, but steps back from asserting basic facts about his rivals. Not once does he poke fun at any of Murdoch’s rivals and steers well clear of dot pointing his employer, Time Warner’s, shortcomings. Which are plenty.

La Monica considers if Murdoch can possibly chart an even brighter future for News Corp, occupied as he is with the question of succession. The evidence the author himself marshals - though doesn’t investigate, even at the shallowest of levels - suggests that shareholders cannot count on son James to carry Rupert’s legacy of vision, profits and commercial brilliance, any time soon. While La Monica, in common with many shareholders, is convinced that James is heir apparent, he is not sure the apple falls close to the tree. Well not without further necessary ripening.

The story of how Murdoch and his chief lieutenants think, act, strategise and view the world is complicated and far more interesting to media insiders and outsiders, both in Australia and the United States than is La Monica’s laundry list that lasts 272 pages.

To be fair, this book does identify absorbing events in the life of News Corp, but overly focuses on the last 20 years. Murdoch’s motives are left undiagnosed, his commercial and political networking unexamined and his personality is ignored. It seems that while the title is Inside Rupert’s Brain, it is other people’s brains that are being examined. And sadly there isn’t even a Murdoch amongst them.

The book ends with a tour of the possibilities of succession. While the tour is short lived and quite off the money, La Monica introduces the reader to Peter A. Chernin.

Chernin joined News Corp in 1989 as president of entertainment for Fox Broadcasting. Soon after he was promoted to president of Fox Filmed Entertainment and since 1996 he has been president and Chief Operating Office of News Corp. Effectively Rupert’s number one man.

Simultaneously praising the genius of Chernin, La Monica laments that as a non-Murdoch, the genius could never become CEO of News. Chernin, he reminds readers, signed a five-year contract with Murdoch “which ends mid 2009”. Noting that Murdoch will move heaven and earth to see that another Murdoch takes control of the empire after he retires, La Monica wonders if Chernin will be persuaded to stay beyond 2009 in the job (and in his spare time train James to take over) or whether Murdoch will have to front up (any day now) to the board and recommend installing his son James in the position.

By mid 2009 - long after the book hit the printers - Mr Chernin left News Corporation, after 20 years. He closely oversaw the company’s Los Angeles-based film and television businesses and left the company with a generous exit package, which included movie and television production deals with 20th Century Fox.

Contrary to La Monica’s predictions, he neither hung around to skill up James, nor was James shoehorned into the job. Chase Carey who worked as CEO at DirecTV, a satellite broadcaster, was selected to succeed Chernin.

Mr Murdoch’s behaviour is quite transparent. It’s no secret that he wants his son to succeed him at the “right” time, but clearly the “right” time is yet to come. Rupert it seems, is in no rush to retire A consummate dealmaker with a host of runs on the board, he wants to prove his longevity equals, if not exceeds, that of his mother’s.

Rupert’s mother, Dame Elisabeth, is very well known for her activities in a plethora of philanthropic pursuits including academia, the arts, children, flora and fauna, heritage and medical research. Many of Australia's most cherished institutions, from (Melbourne’s) Royal Children's Hospital to the Australian Ballet have benefited from her involvement.

What is less known is that this coming Monday, February 8, she celebrates her 101st birthday.