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
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’.
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.
For all the surreal, ultimately pointless show-trial aspects of the session, there was a larger historical logic to the meeting between Murdoch (who must have left the room thinking They didn’t lay a glove on me) and the forces of government that day. Two great and opposing conceptions of the press and its role in public life had just collided. One of them holds that the press is basically different from other businesses: the unique protection it enjoys under the First Amendment gives it unique responsibilities to serve the public interest. The other holds that the news business is basically the same as other businesses. The second version—the Murdoch version—has now won, and Murdoch deserves to move from “controversial” to “visionary” status.
It is thanks largely to Joseph Pulitzer, who invented a new kind of journalism in the late 1800s, that newspapers moved from the open partisanship of an earlier era to a pretense of objectivity today. Henry Luce transformed magazine journalism before World War II with Time, Fortune, and Life. After the war a handful of television-news pioneers created the documentary form, the evening newscast, the Sunday talk show, and other staples. Then TV news changed again, starting in the late 1970s, through the efforts of, among others, Roone Arledge, of ABC, who made news profitable; Ted Turner, of CNN, who made the news cycle continuous; and Larry King and Geraldo Rivera, who merged news and entertainment.
Rupert Murdoch is this era’s influential figure. His holdings have grown surprisingly fast, over a surprisingly long period of time. The cartoon explanation of his success is that he is ruthless or power-mad or even today’s Hitler, as his former friend and current antagonist Ted Turner has called him. The real explanation is that he has combined several crucial ingredients—an instinct for mass taste, an appreciation of technology, a concept of strategic business structure, and a knack for exploiting political power—in a new and uniquely effective way. His is not the largest media company, but it is now the model to beat—or to imitate.
A Taste for Risk and Contention
Rupert Murdoch was born into a newspaper family, but one far less established than those of his near contemporaries Arthur (“Punch”) Sulzberger Sr., of The New York Times, and Otis Chandler, of the Los Angeles Times. (Both are a few years older than Murdoch, and both are retired.) Murdoch's father, Keith, was the son of a Presbyterian minister who had emigrated from Scotland to Australia in the 1880s. Early in life Keith decided that he wanted to be a reporter. After an apprenticeship in his home town, Melbourne, his big break came during World War I. He took part in an early version of “embedding” with Australian and New Zealand troops at Gallipoli, where he assured the commanding general that what he saw would remain confidential. In violation of that assurance, he then wrote a bitter letter to the Australian Prime Minister about conditions for ANZAC (Australia and New Zealand Army Corps) troops. Eventually the general was recalled, the troops were withdrawn, and Keith Murdoch, age thirty, became known as a man who could rock the boat. “Oh, sure, it may not have been fair,” Rupert Murdoch told an interviewer, Gerard Henderson, in 1989. “But it changed history, that letter.”
The rest of Keith Murdoch’s rise in journalism had a similarly scrappy, anti-elite quality. He went to London and learned the techniques of mass marketing from Alfred Harmsworth, who became Lord Northcliffe, the Fleet Street genius of the time. As William Shawcross points out in Murdoch: The Making of a Media Empire (1997), a respectful and authoritative biography of Rupert Murdoch, Northcliffe's papers introduced many of the irresistibly vulgar come-ons associated with London tabloids—and, now, with the Fox network and the New York Post. A typical headline would read DO DOGS COMMIT MURDER? or WHY JEWS DON’T RIDE BICYCLES. “A newspaper,” Northcliffe told his acolytes, “is to be made to pay. Let it deal with what interests the mass of people. Let it give the public what it wants.”
Keith Murdoch put this philosophy into effect when he returned to Australia. With Northcliffe’s encouragement, he took over Melbourne’s stagnant evening paper, the Herald, and revived it with racy features. Through the late 1920s he acquired other newspapers and turned them into a chain, to which he added radio stations. His son, Keith Rupert, was born in 1931. (There were also three daughters in the family.) Over the Depression decade Murdoch's newspaper and radio holdings expanded, and the family business entered a nationwide market struggle against Australia's established and respectable press dynasty, the Fairfax family, whose base was the Sydney Morning Herald. The Murdoch chain kept growing through the war and postwar years.
By the time young Rupert went off to Oxford, in 1950, Keith was in his mid-sixties, sick, withdrawing from the business, and greatly concerned about its future. While Rupert was largely frittering away his time at Oxford, his father discovered a plot led by his deputy to push him out of power within the company. "I can't die yet," Keith Murdoch said in 1952, according to Neil Chenoweth's recent book Rupert Murdoch: The Untold Story of the World's Greatest Media Wizard. "I've got to see my son established, not leave him like a lamb to be devoured and destroyed by these people." After Keith Murdoch's death, in the fall of 1952, company rivalries and disputes broke into the open, and the family's holdings were greatly reduced. Keith Murdoch had stated in his will that he hoped Rupert would "have the great opportunity of spending a useful, altruistic, and full life in newspaper and broadcasting activities"—that is, would succeed him in control of the company. But the company Rupert inherited, now called News Limited, was battered and troubled. Most of what is said about Rupert Murdoch and his operations was said about Keith Murdoch as well: that despite his great influence he always felt at odds with a respectable elite; that he understood himself to be running a family business; that he believed controversy was beneficial and understanding mass taste was indispensable. But Rupert Murdoch was also motivated to rebuild a family business that his father had created and partially lost.
Between the young Rupert Murdoch who took over an Australian family business in the early 1950s and today's globally recognized symbol of media power is a path described in hundreds of articles and numerous books. In reading through the vast public record, I was surprised to be reminded of how many dustups Murdoch has been involved in. He has been like Zelig, seemingly everywhere that important changes in media were taking place—but at the center of the action rather than the periphery.
He entered British journalism in the late 1960s and was soon in a tussle with Robert Maxwell for control of the British tabloid News of the World. Over the next fifteen years he mounted campaigns to take business and editorial control of the low-end Sun and the high-end Times and Sunday Times of London. In the mid-1980s, as Margaret Thatcher was fighting coal miners, Murdoch waged an epic battle against press unions and built an entirely new printing plant so as to operate with much cheaper labor.
He entered the U.S. newspaper world in the early 1970s, with a quiet takeover of the San Antonio Express and News; noisier takeovers of the New York Post and New York magazine soon followed. (It was under Murdoch that the Post published the great tabloid headline "HEADLESS BODY IN TOPLESS BAR.") He also owned, briefly and improbably, the Village Voice. To satisfy U.S. ownership requirements of the time, he applied for U.S. citizenship and was naturalized in 1985. Murdoch was forced to sell the Post in 1988, mainly because of the efforts of Senators Edward Kennedy and Ernest Hollings to overturn a previous waiver of ownership rules. But he bought it again, out of bankruptcy, in 1993.
His real entry into the American consciousness came with his move into television. Murdoch took over 20th Century Fox in the mid-1980s, and at about the same time announced a fanciful-sounding plan to assemble small TV stations into a fourth national network. In the late 1980s he bought the parent company of TV Guide and also began creating his Sky and Star satellite systems in Britain and Asia. In the early 1990s Fox Broadcasting shocked CBS by outbidding it for the rights to National Football League games—the first of many contracts that have made Fox the dominant broadcast sports network. Murdoch fell out with Ted Turner in the mid-1990s, and the two waged personal and business war. (After Turner compared Murdoch to Hitler, the Post ran the headline "IS TED NUTS? YOU DECIDE.") Murdoch started the Fox News Channel partly with the goal of overtaking and thus humiliating Turner's CNN.
Several striking themes recur in this saga. One is Murdoch's long-standing determination not simply to broaden News Corp's portfolio—by diversifying, for instance, into new or unrelated businesses—but to extend his strategic control of the supply and distribution channels on which his existing businesses rely. His father had moved from print to radio with the understanding that each medium could publicize and support the other. Murdoch's companies now constitute a production system unmatched in its integration. They supply content—Fox movies (Titanic, The Full Monty, There's Something About Mary), Fox TV shows (The Simpsons, Ally McBeal, When Animals Attack), Fox-controlled sports broadcasts, plus newspapers and books. They sell the content to the public and to advertisers—in newspapers, on the broadcast network, on the cable channels. And they operate the physical distribution system through which the content reaches the customers. Murdoch's satellite systems now distribute News Corp content in Europe and Asia; if Murdoch becomes DirecTV's largest single owner, that system will serve the same function in the United States.
In his biography of Murdoch, Neil Chenoweth, who has worked for years as an investigative reporter for the Australian Financial Review, stresses that the DirecTV deal is valuable to Murdoch mainly as a way of ensuring wide distribution for his movies and his news, sports, and original TV programming. "We are going to see a landslide of Murdoch content produced for DirecTV and his global satellite network, and it will just blow everybody else away," he recently wrote in an e-mail. The next big wave of media consolidation, Chenoweth predicted, would be driven by other companies trying to match what Murdoch had put together.
Another constant in his career is its embattled, roller-coaster quality. Murdoch is said to be popular and admired within his own organization, rather than resented, mocked, or gossiped about behind his back. But with business rivals he is always in feuds and showdowns, and not only high-profile ones like that with Turner. He has taken big risks (one associate describes Murdoch's making, in a matter of minutes, the billion-dollar decision to back Fox News "the way you or I might order lunch"), and his business has suffered serious reverses. In 1990, in an episode vividly described by Shawcross, Murdoch was nearly forced to liquidate News Corp after a bank in Pittsburgh refused to roll over a small but crucial portion of his corporate debt. Although admirers compare him to Bill Gates or John D. Rockefeller because of his appreciation of technology and his instinct for strategic advantage, Murdoch is perhaps best compared to Bill Clinton: his nature keeps getting him into predicaments from which his talent lets him escape.
Political involvement has been one more constant in his career. The simple view of Murdoch, especially among liberals who fear him, is that he is a dangerously obsessed conservative propagandist—Richard Mellon Scaife with a job. This is imprecise. The exact nature of his political views is a subject of some debate among his associates. Overall he is of course more right- than left-wing. Murdoch likes to refer to himself as a "moderate libertarian" rather than a "conservative" or, in U.S. terms, a Republican. Two of his lieutenants—Roger Ailes, who runs the Fox News Channel, and Bill Kristol, the editor of The Weekly Standard—have worked in Republican Party politics. Murdoch's own involvement with the party itself, as opposed to with specific politicians who might prove useful to him, has been limited. His associates report that he has never met George W. Bush, hard as it may be to believe. He has, though, developed a respectful relationship with Bill Clinton. Each has lunched at the other's office in New York, and Murdoch came away impressed by Clinton's ability to discuss impromptu almost any issue arising almost anywhere on earth. Associates of both say that despite the political differences between the men, they clicked because of complementary personalities: Murdoch loves to listen, and Clinton loves to talk.
The strongest element in Murdoch's conservatism is his taste for leaders who take clear, decisive, line-in-the-sand positions on important issues. That is what he admired in Margaret Thatcher and Ronald Reagan, and what he respects, post-September 11, in Donald Rumsfeld and George Bush. Where he strays furthest from Republican Party orthodoxy is on social issues—gay rights, public religion, "traditional family values," and so on. Given the vulgar-to-raunchy tone of Fox programs like Who Wants to Marry a Multi-Millionaire and That '70s Show, it would be awkward if Murdoch publicly pushed a conservative social agenda. As a personal rather than a political matter, Murdoch was known to be unhappy about the violent nihilism of the Brad Pitt movie Fight Club, which the Fox studios produced, and about an episode of Fox TV's recent Married by America in which shots of a woman's naked breasts were not digitally blurred. But he is usually happy with whichever show on Fox—or headline in the Post, or topless Page 3 model in the London Sun—draws a big audience. He is proud of The Simpsons for both its popularity and its wit. He has done voice-overs for a self-mocking appearance on the show, in the role of a grasping plutocrat.
Similarly, his notorious China "policy" is that of a dealmaker and not a conservative purist. Just before Gingrich came to power, Murdoch made a speech with the Gingrichian theme that advanced communications technology would be "an unambiguous threat to totalitarian regimes everywhere." The Chinese government immediately banned satellite dishes, sabotaging Star TV's satellite transmissions into China. In a highly publicized and controversial series of atonements, Murdoch had his companies publish a book by Deng Xiaoping's daughter; cancel another book, about Hong Kong, that was likely to provoke the Chinese; and drop the BBC World Service, with its independent news broadcasts, from the Star TV lineup.
In 1995 Murdoch funded the creation of The Weekly Standard in Washington, which gave conservative writers another home. But at the same time, his papers in England were playing a significant role in the downfall of the Tory government. That same year the young Labour politician Tony Blair came to Australia to speak at a News Corp retreat on Hayman Island in the Great Barrier Reef. His speech and general energy impressed Murdoch. Two years later the tabloid Sun in London plumped hard for Blair and "New Labour" in an effort to unseat John Major and the conservatives. Murdoch's British press has been as pro-Blair as his U.S. outlets were anti-Clinton through the late 1990s. The Blair government has proposed relaxing TV-ownership rules in ways that would benefit News Corp.
In short, some aspects of News Corp's programming, positions, and alliances serve conservative political ends, and others do not. But all are consistent with the use of political influence for corporate advantage. In the books I read and interviews I conducted, I found only one illustration of Murdoch's using his money and power for blatantly political ends: his funding of The Weekly Standard. The rest of the time he makes his political points when convenient as an adjunct to making money. But there are many examples of Murdoch's using political connections to advance his business ends. "Andrew Heyward [the head of CBS News, a Viacom subsidiary] would be allergic to the idea of attacking a politician who opposes a Viacom interest," says a man who has competed against News Corp. "Murdoch has been shameless about using his journalism for the advancement of his business interests." In this view, The Weekly Standard and the New York Post, neither of them profitable, are more means than ends.
Changing the Rules
Murdoch’s use of political power for commercial ends naturally brings us back to Washington. The dispute over ownership rules for the broadcast industry, about which Murdoch had been summoned to testify, was at face value too narrow and technical to sustain a real political debate in America. But the intense, if brief, controversy over this seemingly arcane dispute was appropriate to the long-term implications of the changes.
The most immediate and direct effect of the revised rules was likely to be on local news coverage. In as many as 180 metropolitan areas the new rules would allow the leading newspaper and the leading TV station to be owned by the same company—something that has until now been outlawed except in a few special-waiver cases. Because the leading newspaper is the only newspaper in the great majority of cities, the new rules would mean that in all but the very largest American cities one news organization could dominate. Supporters of the changes said that this might free resources for better programming—and that other sources of information, whether the Internet or national TV and print outlets, would ensure diversity and competition. Opponents said that the new rules would concentrate press power unacceptably, first at the local level and then nationally: other proposed changes would also permit the formation of larger nationwide chains.
Other than during a few weeks in May and early June, the dispute drew little coverage from the national media. Opponents said, This proves our point! Because most large media companies stood to profit from the changes, they of course devoted much less space to them than to, say, the Laci Peterson murder case. John McCain, who sometimes seemed to support the changes and sometimes did not, observed acidly at a hearing in May that newspaper editorial policies conveniently tend to follow the newspaper’s economic interest. In a Washington Post story Frank Ahrens reported that at one hearing McCain reminded a lobbyist for the newspaper industry that during a Clinton-era regulatory fight all the newspapers that editorialized in favor of a certain rule change were owned by companies that would have benefited from it, and all the papers that editorialized against it were owned by companies that would not.
Beyond its immediate impact on local news and on media-business prospects, the debate symbolized a historic shift in concepts guiding the business of journalism. The shift is back to the idea of journalism as principally a business—and away from an idea promoted over the past seventy years by the Federal Communications Commission.
The FCC is in a way the most futuristic arm of the government. The operating agreements that govern the structure of today's Internet and tomorrow's wireless networks are generally thrashed out there. But the official seal that hangs over the FCC’s hearing rooms is almost comically retro, with an eagle circling crudely drawn radio transmission towers while holding lightning bolts in its talons. It reflects not just the artistic style but also the technological attainments at the time of the agency’s creation, as part of the early New Deal, in 1934. One of the FCC’s most important, and most anomalous, functions was rooted in Depression-era technology and is now undergoing inevitable and painful change.
The anomaly was the FCC's ability to regulate news coverage. The First Amendment's stricture that “Congress shall make no law” that might abridge “freedom of speech, or of the press” has effectively kept the government away from newspaper regulation. Apart from special circumstances involving libel or wartime national-security concerns, what newspapers and magazines decide to publish has been strictly up to them.
Broadcasting—which emerged as an important news medium in the 1920s, with radio, and as the leading news source in the 1950s, with TV—differs in one fundamental way from print. In theory, anyone can start a new publication, but the nature of the electromagnetic spectrum means that only so many broadcast TV or radio channels can co-exist. Since the 1930s the FCC has therefore administered an underappreciated news-management policy. It awards licenses for local broadcast stations, and for combinations of stations into networks. These are effectively licenses to make money. Lyndon Johnson's route to wealth during his years in Congress, for instance, was based on his family's role as the radio and TV licensee for KTBC (now KLBJ) in Austin.
In exchange for this lucrative right, broadcast licensees—and their news operations—have been subject to rules that affect no other part of the press. Their licenses are up for renewal every few years. At least in theory, the FCC will grant a renewal only if the licensee proves that it is serving the public interest with the programming it offers. Broadcasters can’t use foul language or be too risqué. This was the basis for George Carlin’s famous “Seven Dirty Words” routine, about the words flatly outlawed by the FCC, and it is the reason that Oz and The Sopranos cannot appear on broadcast TV. Until the rules were relaxed, in the Reagan era, broadcasters had to apply a “fairness doctrine” in their coverage of political issues. Under the rules up for reconsideration this summer broadcasters couldn't own a large number of stations, or newspapers in the same cities where they had TV stations, so the political influence that comes with their favored, licensed position would be kept within bounds. They have had to offer children's programming and respond to local concerns.
Broadcasters are in the news business but have been treated like a public utility, with public responsibilities. The most famous words ever spoken by an FCC chairman were those of Newton Minow, who told the National Association of Broadcasters in 1961 that television programming amounted to “a vast wasteland.” “I am here to uphold and protect the public interest,” he said. “Some say the public interest is merely what interests the public. I disagree.”
None of these rules, as rules, applied to the nonbroadcast press. But at the time of Minow's speech the idea behind them did: that the press enjoyed unusual privileges and therefore had unusual responsibilities. “Our republic and its press will rise or fall together,” Joseph Pulitzer wrote in 1904, in words now engraved by the entrance to the Columbia Journalism School. “A cynical, mercenary, demagogic press will produce in time a people as base as itself.” With allowances for fancy rhetoric, this admonition guided news operations through most of the twentieth century.
In the world beyond the FCC’s purview the idea that the news business differed from other businesses had started to erode as early as the 1970s. The process involved “infotainment,” corporate mergers, pressure for greater profits, and other well-known phenomena. The change within the FCC has been more distinct, though less publicized, and it is the background to this summer’s drama.
Ronald Reagan’s first chairman of the FCC, Mark Fowler, removed many of the controls on what radio stations could air. Before the mid-1980s Sunday-morning schedules on radio stations were laden with dutiful public-affairs and religious programs; after the controls were lifted, stations could air whatever they thought the market wanted. Fowler indicated that the same reasoning might apply to television. He is responsible for the second most famous utterance by an FCC chairman: TV, he said, was only a “toaster with pictures”—that is, a commodity requiring product-safety regulation but nothing more. Fowler's FCC also enabled Murdoch to create a fourth major network, Fox, by approving his acquisition of local TV stations.
A more dramatic change came in the following decade, when a Democratic FCC, chaired by an antitrust lawyer and close friend of Al Gore's named Reed Hundt, worked with a Republican Congress to pass the Telecommunications Act of 1996. This was arguably the most important economic event of the Clinton era: its effects have been greater than NAFTA’s, and they will clearly last longer than the brief achievement of eliminating the federal budget deficit. The act was a top-to-bottom reconsideration of FCC policies that has had dramatic consequences, foreseen and not, for the mobile-phone industry, telephone companies, Internet-based businesses, and many other firms.
For our purposes, what mattered about this bill was clause 202(h). These few lines instructed the FCC to review every two years its rules limiting media ownership—and to "repeal or modify" any rule that "it determines to be no longer in the public interest." These words could mean a lot of things—including not very much, if they were interpreted as instructing the FCC to stick with rules unless there was flagrant evidence of their pointlessness. But new players entered the drama: the judges of the D.C. Circuit Court of Appeals, and a man who had once been law clerk to one of them—a man who would be the lead player in the next act. In their collective view, clause 202(h) was full of possibilities.
The D.C. Circuit, which is of great importance as the venue for most suits against federal agencies, has recently been a source of conservative intellectual energy, as the Ninth Circuit, on the West Coast, has been a stronghold of liberal judges and views. Antonin Scalia and Clarence Thomas both came to the Supreme Court from the D.C. Circuit (as did the more liberal Ruth Bader Ginsburg). Robert Bork was on this circuit when Ronald Reagan nominated him to the Supreme Court. Douglas Ginsburg, now the D.C. Circuit's chief judge, was nominated by Reagan for the Supreme Court and would in all probability have been confirmed had it not been for controversy over his admitted marijuana use in the 1960s and 1970s, which caused him to withdraw. Another judge on the court, David Sentelle, is a former aide to Jesse Helms and was part of the three-judge panel that selected Kenneth Starr as the special prosecutor.
The judges on this circuit had a chance to examine clause 202(h) when several media companies sued the FCC to overturn limits on their expansion, merger, and cross-ownership plans. In two influential rulings issued last year, the D.C. Circuit Court ruled for the companies and against the FCC. Unless the FCC could prove the need to maintain its regulations, specifically the limits on cross-ownership, it had to change or remove the controls forthwith. In his ruling on one of the cases, Fox Television Stations v. FCC, Chief Judge Ginsburg wrote that some people may have imagined that Congress intended the FCC to take an "incremental" approach to relaxing ownership rules. But they couldn't be more wrong. "The mandate of § 202(h)," he wrote, "might better be likened to Farragut's order at the battle of Mobile Bay. ('Damn the torpedoes! Full speed ahead.')"
Some lawyers and legal scholars say that what the court was asking—all it could properly ask, despite Ginsburg's breezy remarks—was that the FCC do more to explain and defend its rules, such as those that kept the dominant newspaper in a city from buying the dominant TV station. "One way to respond to that sort of decision would be to go out and get proof that the limits are serving interests consistent with the First Amendment," Lawrence Lessig, of Stanford's law school, recently told me. He pointed out that the Supreme Court's rulings in this area have given the FCC considerable leeway to apply ownership rules. By this logic the FCC could have responded to the Fox ruling not by removing its ownership limits but by more fully explaining the rationale for them. If companies filed another suit, and if the D.C. Circuit Court sided with them yet again, the FCC could in principle appeal to the Supreme Court. Robert Pitofsky, a law professor at Georgetown University who was the chairman of the Federal Trade Commission during the Clinton Administration, says, “The courts were asking for a greater burden of proof. This didn't mean you have to throw all the rules out.”
It did not look that way to the man who had to decide whether to fight the rulings: the chairman of the FCC, Michael Powell.
Powell, who turned forty this year, is Secretary of State Colin Powell’s son. He is just under six feet tall and squarely built, with a somewhat high voice. By the time he graduated from William and Mary, in 1985, his father was already famous. Like his father, Michael went into the Army out of college—but two years later, when he was serving with an armored unit in Germany, he was gravely injured in a Jeep accident and hospitalized for a year. He left the Army and eventually enrolled in Georgetown's law school. After graduation, in 1993, he became a clerk for Harry Edwards, then the chief judge of the D.C. Circuit. Later he worked as an antitrust lawyer, and then served as an FCC commissioner; he became the agency's chairman in 2001.
"In some ways this is such a silly debate," Powell said when I asked him about assertions that the D.C. Circuit Court had not actually forced him to dismantle the ownership rules. "Let me put this in perspective. I clerked on that court. For the chief judge of that circuit! I bring, in my opinion, some credibility to the question. But put aside that selfish point—" He then went on to argue that anyone who really understood how courts work would know that the FCC was indeed being told to get rid of its rules. "It's not the fact that we lost that case. It's the basis on which the court relied in saying we lost that matters ... If you really, honestly read those cases, you understand that the status quo [maintaining the ownership rules] becomes extraordinarily vulnerable."
A reader of his transcribed words might not be surprised to learn that people who dislike Powell consider him aloof and conceited. In person he did not strike me that way. He seemed affable and engaging—but eager to explain the rightness of his views, as if disagreement must be rooted in either emotion or illogic. This is an approach I associate with theoretical economists. Like them, Powell punctuates his explanations with "Let's be honest about this" or "Once you move past the subjectivity and emotions ..." With great nuance he laid out his case for relaxing ownership controls on the media. With less nuance the argument boils down to two big ideas:
First, cable TV, satellite TV, Internet news sites and blogs, and countless other data sources give modern Americans more choices about information than any previous society has enjoyed. Therefore, rules to ensure competition among broadcast stations matter much less than they used to.
Second, complaints about overconcentrated media are really complaints about what’s on the air—and the content of news or entertainment should not be the government's concern. “Either you don’t see enough of something you like, or you see too much of something you don’t, “Powell said. “But at the end of the day you have to ask whether you want three out of five unelected regulators”—that is, a majority on the FCC—“saying, I want the public to see this but not that.” The market for news may not be perfect, but the government should be very reluctant to interfere with what people like to watch.
What’s significant about these views? They lead logically to the conclusion that the news business is basically like all other businesses, and should therefore be regulated in the way the rest are—that is, the government protects against price-gouging, fraud, and other run-of-the-mill economic abuses, but ends its oversight there. The idea that press responsibility begins and ends with attracting a market has historical precedents. It was the lesson young Keith Murdoch learned from the tabloid genius Lord Northcliffe: give the public what it wants. But for at least a century newspaper and broadcasting companies were expected to serve interests beyond the purely commercial. That is what made news different from entertainment. Entertainment's only purpose is to be popular. News is supposed to be as popular as it can while also introducing readers or viewers to thoughts, problems, and opportunities that affect them. American news companies have for a number of years been moving toward just-a-business operating principles. The FCC changes give them a governmental mandate.
The circumstances of the FCC’s rules changes were noisy, amusing, instructive, and embarrassing, often all at once. Michael Powell thought he had things under control. More than a year ago, after he had read the D.C. Circuit Court rulings, he told Congress that he would launch a new study to see how many ownership rules the FCC could and should relax. He said that new rules should be ready for an FCC vote this past spring. Through most of its history the FCC has operated with little or no attention from the general press, and Powell could well have expected these changes to sail through too.
But complications arose, unusually baroque even for Washington. The FCC normally has a three-two majority in favor of the party that controls the White House, and there are two other Republican commissioners serving with Powell. But all three of the Republicans are young enough to think that other important political jobs may still be ahead of them, and their personal ambitions seemed to explain more than did simple partisanship.
Michael Powell had been considered one of the Republican Party’s future stars—at least until early this year, when he ran up against another potential star, a new Republican commissioner named Kevin Martin. Martin is not quite four years younger than Powell, but he looks as if he could be in Powell's freshman seminar. A lawyer from North Carolina who was student-body president at the University of North Carolina at Chapel Hill, Martin is sometimes called Harry Potter at the FCC, because of his glasses and hairdo. The better comparison is to Ralph Reed, formerly of the Christian Coalition, who also seemed too unlined to have survived long political wars. Martin joined the Bush campaign in the summer of 1999 and helped to manage its Florida-recount strategy after the election; his wife succeeded Mary Matalin as Dick Cheney's communications adviser. They are considered a very well connected young Republican couple.
Early this year Martin weakened and embarrassed Powell by voting against him and joining the Democrats to defeat an important part of Powell's program for telephone deregulation. The essential question was whether regulators in each state could continue to apply price limits and other rules to the “Baby Bell” telephone companies. Powell argued that the limits were out of date. Martin, to widespread surprise, lined up with the two Democratic commissioners in saying that the rules were necessary to protect the consumer. His defection was mortifying to Powell—a sign that Powell could not control his troops. It didn’t work out that well for Martin, either. Telecom stocks crashed after the surprise defeat of Powell's plan, leading the trade press to call Martin “the sixteen-billion-dollar boy.” Powell, statesmanlike, declined to comment on the episode when I spoke with him. Martin's office canceled a long-scheduled interview on all FCC matters at the last minute, and returned no subsequent calls.
As the media-ownership decision neared, Powell and Martin both seemed certain to vote for the changed rules, albeit for different reasons. “Michael will always go with his analysis of the issue, and Kevin will go with the politics,” an aide who works with both men says, referring in Martin's case to personal ambition as well as party politics. Powell genuinely believed that the D.C. Circuit rulings made changes inevitable. Martin knew that a majority vote was important to the Bush Administration—and he must have understood politically that the issue, already attracting public debate, would only become more controversial the longer it was left unresolved. The third Republican commissioner, Kathleen Abernathy, who had been faultlessly loyal to Powell and was assumed to want to succeed him, was also going to vote for the rules changes.
But while the two Democratic commissioners—Michael Copps, a former aide to Ernest Hollings, and Jonathan Adelstein, a former aide to Tom Daschle—traveled around the country holding hearings to oppose the changes, or at least to delay the vote, Kevin Martin deftly got out of the way. On interview shows and in congressional testimony Michael Powell became the face of what William Safire, in The New York Times, called the “round-heeled FCC.” During and after broad and wounding attacks for a policy Martin favored—attacks that may well have made Powell too controversial to be a viable future candidate—Martin left few tracks.
The politics of the issue took on their strange shape through the late spring. In favor of the changes were a variety of large media organizations, especially regional newspaper powers like the Chicago Tribune and the Belo Corporation, owner of The Dallas Morning News. The big media companies—Viacom, Disney, and so on—were also in favor. When asked, Rupert Murdoch said he supported the liberalization but was mainly pushing for approval of his DirecTV deal. The Bush Administration strongly supported the changes, as did the many Republican senators and congressmen who support most forms of deregulation. One striking quality of the pro crowd was how silent it was. The White House, the Republican Party, and most of the big corporations left the arguing to Powell. Months in advance it was obvious that the rules would be changed, by a 3-2 vote. So there was no reason to waste energy or risk political exposure by arguing in public.
Meanwhile, interest groups that had nothing else in common launched letter-writing campaigns to oppose the changes. Members of the National Rifle Association mailed tens of thousands of protest postcards to the FCC. Common Cause reported that more of its members were mobilized on this issue than on any other in decades. The National Organization for Women and the Rainbow Coalition sided with Christian fundamentalists and the Conservative Communications Center. The common strand among the protesters, according to Mark Cooper, of the Consumer Federation of America, was that all were "controversial minorities" who felt that the national press was biased against their views. The bigger and more market-minded the media conglomerates become, they argued, the harder it is for anything other than mainstream views to be heard. Even Republican senators such as Trent Lott and Wayne Allard joined most Democratic senators in protesting the changes.
Cooper was one of a group of policy activists who went from hearing to hearing challenging the technical merits of the FCC changes. He talked about the "diversity index" the FCC produced to show that there would still be plenty of competition after newspapers and TV stations combined. The formula measures the number of "media choices" each community would have after the mergers. Cooper pointed out the grotesque flaw: the index assumes that every print or broadcast "outlet" has the same amount of influence. Thus if a community went from having two competitive papers to having one dominant paper and a community newsletter, there would supposedly be no real change.
Cooper also answered an argument made often by the Republican commissioner Kathleen Abernathy: that when technology makes so many choices available, concerns about concentrated media are overblown. What does it mean, she asked rhetorically, that 75 percent of prime-time viewers watch programs produced by just four companies? "I can only presume that this means that Americans are watching these providers because they prefer their content." To social scientists this kind of market result is known as a "revealed preference." When I asked Cooper about this explanation, he said, "We're talking about 'revealed preferences'? Okay, you give me NBC's broadcast frequencies for everything that's on my Web page, and I'll give them my Web page for everything they're broadcasting. You'll see some 'preferences' then."
One of the Democratic commissioners, Jonathan Adelstein, said, "Of the hundreds of citizens I heard from directly at field hearings across the country, not one stood up to call for relaxing the rules." The FCC order changing the rules, he said, "often equates the public interest with the economic interests of media conglomerates." He argued that the "marketplace of ideas" was being turned into a plain old bazaar. The other Democrat, Michael Copps, said that the FCC was "outdriving the headlights," making dramatic changes whose consequences it could not foresee.
"You know, it makes me feel extremely old to say so, but it is astonishing to see how young these guys are," Lawrence Lessig, of Stanford, told me. (He is forty-two.) "Powell and Kevin Martin are just at the beginning of their careers, and these are such enormous decisions. The idea that this naive, simple libertarian ideology gives you any handle on these issues is astonishing. What is essential here is pragmatism that is informed by experience and empirical measure."
On June 2 a line of activists, reporters (including me), and paid placeholders formed early outside the FCC building to watch the long-scheduled vote on the new ownership rules. Copps and Adelstein had asked for the "customary courtesy" of a thirty-day delay in the vote. Powell said no. "Let's be blunt," Powell later told me. "They asked for the thirty days not for more time to consider but to stop the results from being produced. I wasn't born yesterday." In the spring, in an episode I did not learn about from Powell, the White House political strategist Karl Rove had met with Powell to urge him to wrap up these controversial regulatory issues as soon as he could. Powell stood on his independence as a regulator and said he couldn't be rushed. But his principles led in the same direction the Administration sought: toward a vote with no further delay.
At 10:00 A.M. Powell gaveled the meeting to order, and the commissioners heard reports from their staff specialists about the virtues of relaxing ownership controls. Powell gave a ten-minute speech endorsing the changes, and Abernathy did the same. Copps and Adelstein each spoke twice as long in dissent. Kevin Martin briefly congratulated all sides for their hard work, said there was "strong evidence on both sides of this issue," and said he would vote for the changes. Powell called for the "ayes." Three hands went up. He asked for "nos," quickly slapped down the gavel, said "The ayes have it," and got out of his chair to leave the room. Security guards rushed toward a group of female protesters, who were dressed all in pink and had burst into song as Powell was calling the vote, and hustled them away. Out on the sidewalk Jesse Jackson and Dick Gregory were giving interviews, and other protesters were marching with placards showing a scowling Rupert Murdoch, who faute de mieux was the symbol of the evil consequences of the decision.
Two days after the vote all five FCC commissioners were called before John McCain's Senate Commerce Committee to explain why they voted for rules for which there was so little identifiable support and such broad opposition. Two weeks later McCain's committee voted to recommend that the new FCC rules be overturned.
This was symbolically important but isn’t likely to mean much. Even if a revocation measure could get through the full Senate, it would be likely to fail in the House. The chairman of the corresponding House committee, Billy Tauzin, of Louisiana, said he would not even schedule a committee hearing for the measure. Various groups promised to file lawsuits challenging the new ownership rules. Such lawsuits go first to the D.C. Circuit Court—where the outcome seems preordained—and then, if accepted for review, to the Supreme Court. The last time the Supreme Court ruled on media ownership, it gave great deference to the FCC's judgments about what limits were (and were not) necessary in the public interest. Whether it would maintain that deference or instead agree with the D.C. Circuit that such limits are largely outdated and should be reviewed is hard to predict—especially given its recent closely divided "liberal" rulings in affirmative-action and sodomy cases.
Immediately after the FCC vote the shares of media companies rose, based on the widespread expectation that most such companies would soon be either buying or getting bought. (As I left the hearing room, I walked a few paces behind the lobbyist for the Chicago Tribune Company, who had worked for months on this issue. On his first cell-phone call he asked, "How's the stock doing?") "Eventually you're going to see more and more of these huge conglomerates," Blair Levin, a former FCC official who is now a media analyst for an investment bank, told me, “because everyone’s going to need to do it to survive. I think of it in Pentagon terms. Rupert is the first one to have put together an Army, an Air Force, a Navy, and a Marine Corps. Inside the Pentagon people could argue about which force is more important and which is getting enough money. But if you’re the Iraqis, it’s a bitch to compete with.”
Levin continued with his view of the future. “The next phase after that will be the really big deals,” he said. "Who does NBC ally with? If Murdoch’s model really demonstrates the synergies of a multi-channel distribution network, with a broadcast network, with a content provider, then you may see Echostar [another satellite company] with Viacom [the parent of CBS]. The other networks will have to ask, Do we do a Comcast deal [referring to the major cable-TV system]? The change in the rules put a lot of wood on the fire. The question is what will light the spark."
To extend the military analogy, a corporate arms race is about to begin. "The FCC ownership stuff is not all that important to Murdoch," Neil Chenoweth told me in an e-mail. "It just helps everybody else catch up with him."
A few days before the FCC vote the liberal groups MoveOn.org, Common Cause, and Free Press organized a nationwide ad campaign to protest the likely result. A full-page ad ran in The New York Times, The Washington Post, and other papers. The ad showed four TV screens, representing coverage on ABC, CBS, NBC, and Fox, and on each screen was the same glowering picture of Rupert Murdoch, looking like Big Brother. "THIS MAN WANTS TO CONTROL THE NEWS IN AMERICA," the large-type headline said. "THE FCC WANTS TO HELP HIM." Chellie Pingree, the recently chosen president of Common Cause, told The New York Times, "He is the poster child of media consolidation. Who better to personify what the trends are than Rupert Murdoch?"
I talked with a News Corp official the morning the ad came out. He was exasperated by it and by the "poster child" quotation. News Corp was just a small player, he said. It had always stood for shaking up the status quo. And anyway, it didn't care about the FCC vote. Gary Ginsberg, a senior News Corp official, said to The New York Times in responding to the ads, "The reality is that in the past two decades no company has brought greater choice, unlocked more monopolies and invigorated more stagnant media markets than News Corporation."
Still, Pingree had a point—less about Murdoch than about the world around him. By example and by competitive threat, Murdoch was showing other companies the way ahead. What would it be like?
For people inside News Corp, it seems, not bad at all. Media organizations are dens of bitterness, intrigue, and insecurity, but News Corp seems no worse than most. Despite some fallings-out and notable firings, Murdoch's management team has been stable. The mood at Fox News seems positively jaunty, as the organization steadily overtakes CNN in the ratings with a much smaller staff. All of News Corp has an on-the-rise feel. The people I know who work at Fox News complain less than my friends in other news organizations. Murdoch will say "Sorry for interrupting" before coming into an employee's office. He is said not to yell or throw tantrums when things go wrong.
I heard several tales meant to illustrate Murdoch's reluctance to micro-manage in his empire—but I heard them in circumstances that make it difficult to determine whether they are true. Several people would, however, vouch for this incident: Benjamin Netanyahu, a longtime friend of Murdoch's, was booked on a Fox News Sunday talk show. But he got there late (offense No. 1 for a live show) because he was taping another Sunday show on another network (offense No. 2). The Fox News producers decreed, No more Bibi on our airwaves for a while! Netanyahu went to Murdoch and asked him to fix it. Instead of bigfooting, Murdoch told him to work it out with Brit Hume—the head of the Washington bureau. Netanyahu did, and the loyalty of the Fox staff increased.
From what I could gather in a number of off-the-record conversations with Murdoch's associates, he loves political gossip and is always calling officials to ask what they've heard, what's new. He is far more likely to use the telephone or talk in person than to send a memo. He rarely bothers with e-mail but is always interested in the details of new technology—especially the sort that can affect his business, from satellite to broadband. No one could remember Murdoch's recommending a novel to others, but he is always touting new nonfiction books—for instance, Robert Kagan's Of Paradise and Power, which contrasts American resolve with European weakness.
What Murdoch does pay close attention to is his divisions' finances. He looks carefully through "The Weekly Flash," a financial summary of the performance of News Corp divisions for the week and compared with the previous year. He makes lobbying calls when necessary in Washington but is not personally close to many of the big figures of the moment there. He is unlike Richard Nixon in seeming basically happy rather than tormented, but like him in believing that the "intellectual elite" is permanently scheming against him. Murdoch lives not on the Upper East Side but in a TriBeCa penthouse. One associate told me that Murdoch would rather be tortured than spend a weekend in the Hamptons. He is hypersensitive to criticism of his business judgment but laughs off complaints about his political or cultural role as mewls from the chattering classes.
Murdoch is known to be in close touch with his children, and he often gives James and Lachlan, the two with major management positions, life coaching on the phone. "Well, darling, it's okay," he might say, after one of them has described a recent problem, and then go on to impart what he has learned from similar challenges. The role of Murdochs within News Corp is basically similar to that of Sulzbergers within the New York Times Company, or Grahams within the Washington Post Company. In each case the family controls large blocks of stock and expects, but is not guaranteed, to run the company. One difference is that Rupert Murdoch is more purely entrepreneurial than recent Grahams or Sulzbergers have been. As a result, the business up for the next generation of Murdoch family control is currently at least six times as large as the Times or Post Company; it is truly global, and faces far more varied challenges.
News Corp's technological and strategic advantages are also hard for any other company, even a larger one, to replicate exactly. There are only so many major studios in Hollywood, and creating a worldwide satellite system to rival what Sky, Star, and DirecTV will give Murdoch is currently beyond any other company's reach. But even though they cannot imitate him, other companies will have to learn from him. Two principles that others can take from Murdoch’s experience are his total market-mindedness and his pragmatic embrace of politics.
What the Murdoch model means in terms of content is precisely what the market will bear. In a country as big as the United States the market will support very refined and very coarse products. The gamut of Fox TV offerings, from the best to the worst on the air, indicates how wide the range can be. The writers for The Simpsons, the great pop-culture achievement of the late twentieth century, are fully aware of the contrast. In one episode Homer was convicted of murder, sentenced to death, and executed. Or so it seemed until the moment the switch was thrown on Ol’ Sparky, when Carmen Electra stepped out from behind a curtain to tell him that he had been a player in Fox’s newest reality show, Frame Up.
The purely market-minded approach creates more complications when it involves the news. The Fox TV empire covers news—sort of. Like its cable-TV competitors, it really covers whatever is most attention-getting that day. If it's a war, there is very interesting coverage of that war. If there's no war, then there’s almost equally intense coverage of the Laci Peterson case—or of Chandra Levy, or JonBenet Ramsey, or whatever is compulsively watchable at the moment. The old-fashioned concept of news involved some calculation of what was "important." News as a pure business has to go with what grabs attention and hope that from time to time it's important, too.
What will a Murdoch era for the press mean politically? Here’s what I think, after discussing the subject with people who have worked with and worked against Murdoch. The political component in Murdoch's media operation is larger than people inside the company admit—and perhaps larger than they believe. But it is smaller than most people who dread Murdoch's influence assume. He is principally a businessman, of conventional business-conservative views, who vents those views when possible but not when they interfere with any important corporate goal. For instance, the neoconservatives at Murdoch’s Weekly Standard harshly criticize China, but Murdoch applies the wholly conventional economics-class view that ever increasing trade with that country will mean freedom in the long run. The main political significance of a Murdoch era is that more of the press will become more openly partisan than it has been in many years.
Murdoch’s operations are not openly partisan quite yet. The New York Post is, maybe, with its cartoon of the ostrich as France's national bird. (Contrary to widespread belief, it was neither Fox News nor the Post that introduced “cheese-eating surrender monkeys” as a nickname for the French. The phrase came from Groundskeeper Willie, of The Simpsons.) But Fox News won't be budged from its claim that it offers “fair and balanced” coverage. Roger Ailes, the head of Fox News, frequently asserts that in opinion polls 70 percent of Americans say the media are “too liberal.” Set aside for a moment whether respondents actually say that—or whether they’re right if they do. For Fox's purposes it leads to the conclusion, as Ailes has put it, “that we can play things down the middle and get that seventy percent, while everybody else fights over the thirty.” Brit Hume, of Fox’s Washington bureau, has said that the “Washington herd” all runs in one direction. “If we just step aside from the herd, it's like picking up money off the street.”
Of course, the Fox establishment would hoot at the idea that NPR, The New York Times, or CNN was “playing things down the middle,” much as those organizations would hoot at Fox's claim. Every liberal thinks that Fox is a biased right-wing outlet; every conservative thinks the converse about mainstream outlets like these, plus the three big networks. Whether or not real bias in news reporting has changed, the perception of the press's political role has become steadily more polarized. One great truth of political life is that each side is absolutely convinced that the other has an unfair advantage in getting its views out. Liberals point to talk radio, conservatives to the generally liberal outlook of Hollywood. Many people point to Murdoch as an example of unbalanced power—and Murdoch himself points to The New York Times. In a recent speech he said that the Times was by far "the most powerful force in the country.” “Its news and its priorities,” he continued, “are repeated in hundreds of newspapers ... There is very much a tendency there, if you like, to domination by one company.”
Sooner or later Murdoch’s outlets, especially Fox News, will be more straightforward about their political identity—and they are likely to bring the rest of the press with them. There will be liberal papers, radio shows, TV programs, and Web sites for liberals, and conservative ones for conservatives. This result will hardly be new. Frankly partisan media have never ceased to be the rule in modern Europe. Our journalistic culture may soon enough resemble that of early nineteenth-century America, in which party-owned newspapers presented selective versions of the truth. News addressed to a particular niche—not simply in its content but also in its politics—may be the natural match to an era with hundreds of satellite and cable channels and limitless numbers of Internet sites.
An age of more purely commercial, more openly partisan media leaves out some of the functions that news was until recently expected to perform: giving a broad public some common source of information for making political decisions, and telling people about trends and events they didn’t already know they were interested in. One way or another, self-governing societies must figure out the suitable commercial channels through which the information necessary for democratic decisions can be spread.
That’s not exactly Rupert Murdoch's problem, though he helped make it the world's. If the pure-market approach doesn't do the job of informing the country, then eventually another sort of market process might kick in. Citizens who think they’ve landed in a vast information wasteland could ask their representatives to set new rules for the media: rules that recognize an obligation of the media beyond maximum profit, rules clear enough to survive interpretation by regulators or appeals courts with clear ideological agendas. In the long run the press does give the public what it wants. We’re about to see just what that is.