The Age of Murdoch

Many see him as a power-mad, rapacious right-wing vulgarian. Rupert Murdoch has indeed been relentless in building a one-of-a kind media network that spans the world. What really drives him, though, is not ideology but a cool concern for the bottom line—and the belief that the media should be treated like any other business, not as a semi-sacred public trust. The Bush Administration agrees. Rupert Murdoch has seen the future, and it is him
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No civics text has the stomach to describe Washington's "wait in line" industry. When a famous witness is to appear before a committee of Congress, or a famous case is to be argued at the Supreme Court, tourists imagine they can drop in to watch; but they discover that the line for admission formed well before dawn. Professionals in town—lawyers, lobbyists—can't afford to be left out, especially if clients' money is at stake. So they hire services to do the waiting for them. On the days of big events, lines resembling those outside soup kitchens or for-pay blood banks snake through marble corridors in House and Senate office buildings and spill out onto the sidewalk long before most staffers show up for work. At 9:45 or so, for the typical 10:00 A.M. committee hearing, taxis and town cars begin depositing passengers who have come from breakfast or early meetings at their firms. The paid placeholders hold up little signs with names on them, like limo drivers greeting arrivals at an airport, and the switch occurs. Someone with wild hair or wearing several sweatshirts leaves his place in line or his seat in the hearing room, and someone in a nice suit steps in. Economically the arrangement makes sense, but it's a little too crass a reminder of the different standing of citizens before their democratic government.

A line formed outside the Russell Senate Office Building early one morning this May, in anticipation of a session that would combine glamour and money. Congress was beginning to pay attention to pending changes in the rules that restrict the number of radio and TV stations a person or company may own. The proposed revisions were highly technical, but if the changes went through, they would provoke a wave of buying, selling, and consolidation in the media business. In particular they would allow, and therefore presumably encourage, a large number of mergers or takeovers among newspapers and TV stations. Supporters argued that this would be economically efficient and productive, opponents that it would give too much power to too few companies. A Senate committee chaired by John McCain had summoned several expert witnesses to discuss the implications of the changes that morning, along with a man who was not directly involved in the debate but who seemed to personify media power: Rupert Murdoch.

At this hearing, as in most of his public appearances, Murdoch would dismiss the idea that he is anything like a media "baron" or that the holdings of his company, News Corporation, constitute an "empire"—a term he dislikes. The company is generally referred to as "News" or "News Corp"; politicians often pronounce the name "News Core," as if it were akin to the Peace Corps or the Marine Corps. Its main holdings are the Fox broadcast networks and Fox News, Fox Sports, FX, and other Fox cable channels in the United States; 20th Century Fox studios; thirty-five local U.S. TV stations; the New York Post plus The Times and The Sun of London; the conservative magazine The Weekly Standard; the publishing house HarperCollins; the Sky satellite system in England and the Star satellite system in Asia; the Los Angeles Dodgers, which News Corp is selling; and various publications in Murdoch's native Australia. In addition, Murdoch is now seeking federal approval to buy a one-third share in DirecTV, the leading satellite-broadcast system in North America.

To someone not named Murdoch, this might sound like a lot. But Rupert Murdoch frequently points out that the three established TV networks in the United States are part of conglomerates much larger than his. Last year the total revenues of News Corp were about $17 billion. CBS belongs to Viacom, which also owns Paramount Pictures, Simon & Schuster, Blockbuster, Infinity radio, and so on, with total revenues of $25 billion. ABC is part of Disney, with revenues of $26 billion. NBC is owned by General Electric, whose total revenues were $131 billion. Murdoch's upstart Fox News Channel, founded in 1996, has for more than a year consistently beaten the better-known CNN (founded in 1980) in cable-news rankings. CNN is part of the AOL Time Warner combine, whose revenues last year, despite the historic AOL collapse, were $42 billion—two and a half times News Corp's.

So Murdoch didn't represent the biggest media company, or even one that was directly affected by the proposed changes in ownership rules. His share in DirecTV would involve legal and regulatory issues different from the ones Congress was discussing. But Murdoch was the media heavyweight the politicians wanted to hear from, because News Corp and Fox are personal companies in a way that other networks have not been since the days of William S. Paley and "General" David Sarnoff. Murdoch and his relatives control some 30 percent of all News Corp shares, through a family trust called Cruden Investments. That stake is worth about $12 billion at News Corp's current market capitalization. Because of his role as owner, and also his market success, Murdoch's reign has been long and unchallenged in a way not seen for the past few decades, during which CBS and NBC (the networks Paley and Sarnoff founded), and most of the rest of the media world, became the province of corporations. Jack Welch was in charge of GE for more than two decades, and Michael Eisner has run Disney for nearly that long. But neither of them can expect to stay in command as long as they're physically able, which Murdoch clearly intends to do. And unlike Paley and Sarnoff, whose familial power died with them, Murdoch has planned his succession.

Whether or not News Corp is an empire, functionally it is a dynasty. At seventy-two, Murdoch is four years older than Welch—but twenty-two years younger than his own mother, Dame Elisabeth Greene Murdoch, who as of this summer was still active in Australia. (Murdoch is said to have remarked when he heard that Britain's Queen Mother had succumbed at 102, "An early death!") His father died at sixty-seven, after heart and prostate problems. After a prostate-cancer scare three years ago, Murdoch become a diet-and-fitness enthusiast. His third wife, Wendi Deng, is thirty-five. His fifth child, Grace, is not yet two, and a sixth child is on the way. He has two older daughters—Prudence, age forty-five, and Elisabeth, thirty-five—and two sons. Lachlan, thirty-two, is the deputy chief of operations at News Corp. James, who will turn thirty-one late this year, runs the Star satellite business in Asia. For several years Murdoch has been indicating that one of the sons—probably Lachlan but perhaps James, depending on how he does in the next few years at Star—or both jointly will succeed him at News Corp.

Several years ago I ended up, to my shock, sitting across from Murdoch at a long restaurant table at a crowded technology conference. He said hello and asked my name, went back to finishing his meal, and in general didn't behave as if I should be in awe of him. We discussed nothing of substance on that occasion, and News Corp officials told me not even to dream of interviewing Murdoch for this article. I was able to watch him testify and speak to groups several times, and I interviewed people who have worked or still work closely with or who have competed against him. All the associates and employees I reached, and most of the business rivals, refused even to meet for a discussion unless I agreed not to use their names. The Fox News organization is under blanket orders not to talk to the press unless pre-cleared. I did not manage to get anyone at Fox to admit the incongruity of a news organization's taking this stance.

Billionaires, based on the seven-person sample I've had the chance to observe, tend to be either superpolite and ostentatiously respectful or the reverse. Murdoch is in the polite camp. When he stepped into the Senate hearing room, his personal bearing set him apart from the senators who had asked him to appear. Senators carry themselves as if waiting to be noticed. Murdoch eased into the hearing room as if hoping not to make a stir. He was wearing a plain dark suit and not-very-stylish large glasses. His face is heavily lined; his hair is thin and combed straight back; he is of medium build. He would not stand out in a crowd. Nonetheless, TV cameras immediately surrounded him, and senators came down from behind the podium to shake his hand.

Murdoch gave a brief, upbeat opening statement that was almost identical to what he had told a different congressional committee two weeks earlier: "We have a long and successful history of defying conventional wisdom and challenging market leaders ... We started as a small newspaper company and grew by providing competition and innovation in stale, near monopolistic markets." When asked about the topic of the hearing, the new rules for media ownership, he said, to appreciative laughter, "I don't have a dog in that fight." He was being cute: although unaffected by the specific measure under discussion, he obviously supported a general relaxation of rules. Then he responded tersely but with a wry edge to what the senators, especially the Democrats, were really asking: whether he had become too powerful for the world's good.

Ernest Hollings, of South Carolina, a Democrat in his eighties who often makes folksy remarks, held up a long list of companies controlled by News Corp to counter Murdoch's self-portrayal as a small fish in the media sea. The list ran to a full ten pages. Hollings drawled, "I wish I could buy some stock in this thing."

"Any day," Murdoch deadpanned (the company is, after all, listed on the New York Stock Exchange), bringing laughter from everyone but Hollings. Murdoch then gave a discursive answer about his holdings that lasted until a light turned red in front of Hollings, signaling that his time for questions was up. "Your lawyer is good!" Hollings told Murdoch. "Your answer went past the red light." Then, thinking that the microphone was turned off, sounding both exasperated and impressed, he muttered "Jesus!"

What about the imbalance of political views on talk radio and many cable TV channels? asked Byron Dorgan, a Democrat from North Dakota. Murdoch repeated his standard claim that his news organizations always strove to be "fair and balanced." Then could he explain the fact that radio had 300-plus hours of nationally syndicated conservative talk each week, versus five hours of liberal talk?

"Yes," Murdoch said with a twinkle. "Apparently, conservative talk is more popular." As if aware that he might have needlessly shown up Dorgan, Murdoch added, in charmer mode, "If we could find a popular, amusing broadcaster to talk for an hour or two every day and he was a liberal, we'd have him on like a shot." Senator Dorgan, Murdoch said, was "doing very well" in his tryout for the job.

Barbara Boxer, a Democrat from California, pointed out that Murdoch's New York Post had introduced the label "Axis of Weasels" for France and Germany, and that his Fox News had enthusiastically repeated and amplified the message. Didn't this show that one man could become his own media echo chamber? She then asked, "Do you believe there should be any limits—at all—on how much media one individual or one company can control?" The result was a David Mamet-style dialogue.

MURDOCH: I don't know what the right limits are, but I'm certainly in favor of relaxing the existing limits, Senator.

BOXER: You're in favor of relaxing the limits! ... Well, what if you owned everything?

MURDOCH: If I owned everything?

BOXER: Do you think there ought to be limits on you?

MURDOCH: No, of course not. And we don't—

BOXER: You think there should be limits?

MURDOCH: I think there should be competition everywhere. My life has been built, and my business, [by] starting competition and starting up against—

BOXER: So we've gotten this far.

MURDOCH: —other people and providing diversity.

BOXER: So we've gotten this far. So you agree there should be limits. And the—

MURDOCH: I think there should always be diversity.

BOXER: Good. Limits and diversity. We agree. So then the question is how much? And that's—you're saying you can't put a number on it.

MURDOCH: There should be no limit to diversity.

(Laughter.)

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.
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