Gawker
Rupert Murdoch's 78th year has been busy. With the exit of the Wall Street Journal's native managing editor, Marcus Brauchli, the Australian media mogul's lieutenant now has a free hand to turn the business newspaper into a broader national title. We're hearing this afternoon that Daily News owner Mort Zuckerman has dropped out of the bidding for Newsday, clearing the way for Murdoch's News Corporation to take control of a third newspaper in the New York market. And the New York Post is this week shrinking to allow the News Corporation tabloid to be produced on the same presses as the Journal. But here's the question: why the rush? There are three main reasons: newspaper publishing economics; the broader synergies available to a media group with heightened political influence; and mortality.
1. Publishing economics. The New York Post's new size, 12 inches high, down from 13½ inches, will make it the size of the Wall Street Journal, folded in two. I'm told this will allow both Murdoch-owned papers to be produced on the same presses. If Murdoch's rumored $580m bid for Long Island's Newsday goes through, News Corporation will achieve even greater savings. A person familiar with the deal said the deal, by combining printing and distribution of the New York Post with another title in the same metropolitan market, would wipe out the $50m in annual losses that the Australian media titan still bears on his beloved New York tabloid. This move would be straight out of News Corporation's UK playbook: there, the media conglomerate transformed the profitability of its UK titles in 1986 by breaking the print trade unions and moving production of The Times, The Sun and other London papers to a heavily fortified print works in Wapping.
2. Influence. Rupert Murdoch may be the personification of the press baron, but he's never had anything like the influence in the US that his array of newspapers and television networks brought in the UK. His solitary US newspaper title, the New York Post, has given Murdoch influence over New York City and State politics, but precious little juice in Washington, DC. Murdoch has never had the access to the White House, even under George Bush, that he had to Number 10 Downing Street during Tony Blair's tenure as UK prime minister. Fox News is powerful, of course, but the cable news network is too reflexively conservative to provide any real influence over the liberals who are likely to run national politics, and appoint regulators, over the next political cycle. By creating a national title in the Wall Street Journal, and taking control of about half the New York newspaper market, Murdoch or his successor should be able to withstand any political effort to break up his empire. Look at the UK: the Labour party, which long sought to curtail News Corporation's media power, has entirely given up; about a decade ago, Murdoch passed the critical threshold beyond which he became untouchable. By creating a similarly interlocking network of television and newspaper operations in the US, he can achieve a similar result on a grander scale—if competition authorities allow.
3. Mortality. Last month, the Australian media mogul turned 77 years old. His motives are hard to divine, but one has to presume that the nightmare would be the breakup of an empire he has spent a lifetime in building, the fate which awaits Time Warner and Sumner Redstone's holdings. News Corporation is the one media conglomerate which makes some sense: the profits are made on sports and entertainment broadcasting; tabloids and quality newspapers provide political protection. That's the formula in the UK, at least. In the US, the richest media market, Murdoch bought New York Post in 1976 and has gradually accumulated television stations over the three decades since, launched a fourth entertainment network and a surprisingly successful cable news channel, Fox News. But it is only now, as proprietors such as the Bancroft family and Sam Zell lose hope in the future of newspaper publishing, that Murdoch has been given the scope in the US to achieve the same concentration he has in the UK. And it is no wonder that Murdoch is in such a rush. These newly available newspapers need a dramatic intervention if they are to make the transition to the internet. Potentially hostile Democrats are about to take control of executive and legislative branches of government. And Murdoch, the last great media mogul, is mortal. The aging press magnate can deny the reality by wearing black polo-neck sweaters on the urging of his much younger wife, but he doesn't have much time to conclude his legacy.
(Citizen Kane's desolate mansion, in the Orson Welles movie based loosely on the life of William Randolph Hearst, the pre-eminent press baron of an earlier age.)
Comments
They'll furnish the papers and he'll furnish our government...
oh mr. denton thank goodness you reminded me - mr. murdoch posted a thank you note, he simply adored the antique scottish thumbscrew you sent him for his birthday. it really was an especially thoughtful gift, sir. oh yes, I'm recovering alright, sir! no no, not at all - it was my pleasure to allow you to try it out on me!
I don't know why he's buying up newspapers with the (almost) weekly updates of cutbacks and layoffs in the print media field.
This man has already played key roles in two elections, 1991 and 97 in the UK as well as the most recent one. Labour would have had difficulty getting in without Blair supporting Murdoch's attempt to get a satelite over China. Then the Sun went Labour.
@Sarcastic_Communist_Gamer who uses sarcasm. Remember that.:
He did it to us. He'll do it to the USA.
@head cheerleader, gawker high: Sigh, you people are all so shallow. Okay, more reality TV recaps then!
@Nick Denton:
Actually, this and Pareene's recap of the Democrat primary season were my favorite posts of the day. Great analysis.
@Nick Denton: you know what, nick? that's really fucking misguided and actually kind of stupid of you to say to me. I deliberately comment on your pissy little media fight posts - because I enjoy them immensely and never want to see a gawker where they're not a part of the mix. and I worry that they won't be, because they don't generate the comment & pageview numbers the way, say… open-captions do. sorry that my contributions aren't up to your exacting standards (I thought scottish thumbscrew was inspired.)
also? I don't watch much by way of reality programming and as a result you'll rarely see me mucking it up in any of those threads.
@Nick Denton & head cheerleader gawker high: The managing editor and owner of the "Media Gossip and Pop Culture Around the Clock" blog must be kidding, I think. Or maybe he's gonna close up shop as soon as that first edition of À la recherche du temps perdu gets out of escrow.
This was a terrific piece that I really enjoyed reading. Great work Nick!
@head cheerleader gawker high: Cheerleader head with a thumbscrew! Cheerleader head with a thumbscrew!
Damn. Everyday Gawker finds a way to put me right back in high school - y'know, clumsily babbling Cheerleader Head & a Thumbscrew everytime i get around a cute girl and a bottle of booze, and realizing that it won't matter anyway because we're all so goddamned anonymous.
No Future.
@jackvinyl: you should totally ask me to prom.
@Nick Denton:
Wow, that was thought-provoking. Thanks.
I notice that Newscorp's US-based online holdings are an odd random mix of sports, religion, social networking, kids online games, movie entertainment and men's sex advice.
His holdings in all other media are all better integrated with the NewsCorp brand. They are also usually stellar performers in their segments.
But the wide range of genres of his online American holdings reek of a lack of focus. It is as though he simply bought up random websites based on their sitemeter readings. Plus, their offerings are all singularly low-brow. And had been even before he bought them up. With the exception of MySpace and Hulu, the rest aren't close to being market leaders.
Thoughts? I'm cautiously assuming that Murdoch doesn't get Internet media the way he does offline media.
@karion: i agree wholeheartedly. a tip of the hat to nick and pareene.
It is going to be very interesting when he takes over Newsday. Long Island politics skew socially liberal / fiscally conservative, with an emphasis on the arts and culture, family interests, and public safety; in short - the exact opposite of The Post. Woe will be Rupe if he tries to Post-ify our daily local. Long Islanders will stop buying and start watching Channel 12 instead.
I also see the snarky, snotty, intellectual Long Island Press getting a big boost from this. They've already scooped Newsday more than once on local stories - probably because the Trib is based in Ohio.
@head cheerleader gawker high: Last Chance for a Slow Dance...
I would be charmed if you would promenade with me. Please, pass me the bottle and we'll toast on it...
Less reality teevee and more of this, please.
When did he become a sharpei?
@Nick Denton: also, while I realize it was simply a frothy head intern comment, didn't it indicate to you that I actually read the post? jesus fuck, nick. (sorry, I'm really annoyed by you right now.)
Regarding his mortality - it's important to remember that Rupert still phones his mother every week. The man's got titanium genes...
...but I'm loving the fact that he's had a make over - by the Muppets. I just want to stick my fingers in the back of his head and make those features wibble.
@Lazy Susan: I wonder if anyone has ever pleasured the clitoris tucked deep in his weird little forehead vadge, or if he was ritually circumcised and that's why he's such a dickhead.
Oh you know the Chinese. They'll eat anything.@Hez:
@head cheerleader gawker high: Oh, I was just being pissy. Because sometimes I dream of a Socratic dialogue in these comment threads, rather than one-liner oneupmanship. But there's a place for both, and I do enjoy your whimsical commentary.
@Nick Denton: Re: Zuckerman - Not so fast.
[www.nytimes.com]
@Nick Denton: A Socratic dialogue? Can we make out?
@head cheerleader gawker high: @Nick Denton: Socratic dialogue interspersed with boob pics and snark is the ideal mix, duh, that's as obvious as peanut butter and jelly.
Great analysis of the economic and media market dynamics, despite Murdoch's success, in some ways he has yet to achieve critical mass in the US market, until now as you pointed out.
However, I think your assumption that liberals will be in charge in Washington over the next few years is suspect. The presidential election looks like a toss up at this point, and if the Dems win the White House and try to govern from the left, that will likely create a backlash that turns Congress back over to the Repubs in the off year elections, just like in '94.
@Nick Denton: Dude, you get some awfully good dialogue going on in these threads. Head over to the fucking Atlantic and look at the pathetic-tacular mess that vaunted intellectual institution's blogs' comments constitute; Marc Ambinder turned his off the other day because the few dozen people who contribute couldn't be civil to each other.
But anyway, exactly what deliciously debatable points have you made in this post that we're supposed to delve into here, Nicholas? That you can save money by consolidating production means, and that Rupert Murdoch wants to save money? That influence is directly proportional to how many media outlets you control, and that Rupert Murdoch wants to expand his influence? That Rupert Murdoch is 77, and that 77-year-old people can generally be expected to die soon?
Would you agree that none of these points are particularly disputable? (Hey, check it out -- it's could get all elenchus-ized up in here!)
@moff: Aporia ensuing in three...two..one...
@moff: Whazup Ari G! Respek.
@Bell County: Booyakasha!
@rosaluxembourgeoise: And now, a little Hemlock...
+ Watch video
@moff: Damn you, Hemlock! That's not "deduction", it's abductive reasoning.
We're trying to have a dialogue here. Let's avoid flights of whimsy, one-upmanship, and irresponsible use of philosophical terminology, shall we?
@rosaluxembourgeoise: Oh, I know what this is about: You're upset that I ate half of your chicken salad sandwich. Q.E.D.!
Mortality? Have we all so quickly forgotten the locked chamber full of weeping Pinoy orphans that Rupert Murdoch keeps close at hand for organ transfers?
Sheesh. Short attention spans with you peohlookshinypretty
@munkles: Only Pinoys say "Pinoy," right, kababayan?
I admit it's quite intellectually diverting to try to analyze Murdoch and his empire, but I'm not sure it's possible to make any conclusions about it that are meaningful in the long run. Three reasons for this come to mind:
1) I'm not sure that the difference between Murdoch and his competitors is that significant. It seems to me that Murdoch and his media-titan competitors all share the same basic understanding of how to extract dollars from people's pockets in exchange for news/entertainment produced as efficiently as possible. Rupert might have a little greater appetite for risk and a slightly greater patience for the effort to understand different markets -- but that's about as far as I can reliably distinguish him.
2) It's just media. I know I'm in the minority here, but I just don't see Fox News influencing people. I know few people who watch it. And the New York Post? Are you serious? I think The Simpsons is more influential than the Post.
3) I trace this insight to James Surowiecki, but Nick is on it too: These huge media conglomerates were assembled according to one person's vision and force of personality, not market logic. And as soon as the charismatic empire-builders are gone, there will be no one else around who can possibly understand how the parts are supposed to work together, and the empires will thus fly apart again under their own centripetal force. I think this is the basic insight to retain about these empires, and it's a fun one to track because it contains a prediction too.
But for all of these reasons, one's ability to draw conclusions about these media behemoths' impact on anything outside of themselves is severely limited. I admit that on many levels, it would be interesting to believe that individual media titans shape public opinion in a way that it isn't already shaped by a zillion other forces -- but in the end that's just cult-of-personality thinking. On individual issues -- continuing to deal with China as a business partner, for instance -- I'll grant that someone like Murdoch might be able to nudge American government policy in one direction or another. But in the end, American public opinion is just too overdetermined and too subject to innumerable competing influences to get pushed even slightly off-center by one guy.
I admit that in the UK or Australia this might be different and public opinion might be easier to influence. I'm not even sure about that, though.
For a complete account you should note that Rupert's heredity is remarkable. Not only does he telephone his mother every week, but she, at 99 is only the latest in the maternal line to maintain vigour of mind and body into old age. His great uncle Prof Walter Murdoch was still writing a column and broadcasting into his 90s.
People think Murdoch is some kind of ideologue. He's a smart businessman who's merely filling voids in the market, whether they're ideological or otherwise. I really don't think he gives a damn about "nudging American government policy".
@Rachel Marsden: I think you just described a healthy portion of "Editorial Leadership" in Modern Journalism.
And: assuming it's really you, a sincere question: how do to take to being played as a corsetted pin-cushion on these pages? And why do you feed it?
Finally: Nick, Nick, Nick. It's all here for you: wit and wisdom. Amongst the chaff--yeah, plenty that, too. Try reading us sometime when you're a bit brighter-browed.
@KarenUhOh: wut
@KarenUhOh: Oh, I see what you mean. Actually, I find it funny. It doesn't really impact my life negatively or otherwise, so I'm pretty indifferent to it. :)
@Rachel Marsden: Funny, that you find it funny. I've never been very thick-skinned. I would cry a lot.
@KarenUhOh: Haha. I wouldn't know any differently. Nothing I've ever read has ever made me cry. Except the odd speech by a Democrat.
@Rachel Marsden: There you go. Let's talk politics. In our underwear.
@KarenUhOh: Do it in French. Please!
@skahammer: Who are you?
Nick Denton's year has been busy. With the exit of the Gawker's managing editor, Choire Sicha, the British blogging mogul now has a free hand to turn the Manhattanite Media blog into a broader national title (see: Scientology Takedown.) But here's the question: why the rush? There are three main reasons: blogging economics; the broader synergies available to a media group with heightened blogosphere influence; and ad revenue mortality.
1. Blogging Economics. Gawker Media's new headquarters is pretty swank. I'm told this will allow all Denton-owned properties to be produced on the same premises. Paying bloggers for pageviews also ensures optimal profitability.
2. Blogosphere Influence. Nick Denton is the personification of the blogging baron. Gawker has given Denton influence over New York Media, but precious little juice in the real world. Gawker is powerful, of course, but the blog is too reflexively snarky to provide any real influence over the Normals who click-through banner ads. By creating a national title in Gawker, and taking control of about half the snark market, Denton should be able to withstand any Steele-like effort to break up his empire. The Media, which long sought to curtail Gawker's power, has entirely given up. By creating an interlocking network of blogging operations in the US, he can achieve domination across multiple product verticals-if competition allows.
3. Ad Revenue Mortality. Last year, the American economy took a turn for the worse. Denton's motives are easy to divine because he blogs openly about them. He has gleefully carved apart the blog empire he has spent a few years building. Gawker Media makes some sense: the profits are made on sports, entertainment, and tech; quality Gawking provides political protection. It is only now, as proprietors such as the Bancroft family and Sam Zell lose hope in the future of newspaper publishing, that Denton has been given the scope in the blogosphere to achieve the same concentration that Murdoch has in the print world. And it is no wonder that Denton is in such a rush. Profitable blog conglomerates need dramatic intervention if they are to survive the coming Internet fall-out.
@Nick Denton: Lapsed media professional who went over to the business side long ago and along the way gained some familiarity with strategy consulting.
And who, might I add, are you? (PM is fine.)
@fasdunaroawerm: Oh, very clever. No, really, very clever.
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