From a local Australian newspaper to a global media empire, Rupert Murdoch has built his company, News Corporation, into the mammoth size it is today making him one of the great minds of the Information Renaissance period. News Corp spans from television, film, cable and satellite broadcasting to magazine and book publishing and newspapers. The company is truly global with operations in the United States, United Kingdom, Europe, Asia, and the Pacific Basin (2002, Rohm). Recently, Forbes Magazine ranked Rupert Murdoch’s net worth at an astonishing $7.8 billion (2004, December 17).
The Australian-born entrepreneur turned U.S. citizen, has lead an amazing life which some would call, full of crude business deals, hostile takeovers, greed, and control. On the other hand, some may call it brilliance and success in a hardcore competitive business world. Nevertheless, Rupert Murdoch has become a media giant on a global scale. Maintaining leadership and control over such a large empire has not been without challenges and pitfalls along the way. The history of Rupert Murdoch and the building of his vast empire are both compelling and intriguing.
In 1954, Rupert Murdoch took control of his father’s small town newspaper, the Adelaide News. This small town newspaper in Australia would be his initial capital in building his media empire. His father Sir Keith Murdoch was a very serious-minded, hardworking man. He married Elisabeth Greene in 1928. Sir Keith, born August 12, 1885, was one of seven children (2001, Chenoweth). His father, Patrick Murdoch was a reverend who had an interest in the politics of church and state. Sir Keith spent a short time in London where he studied economics. He became terribly homesick and returned Australia. Sir Keith also had an interest in politics and journalism. He later became a war correspondent and returned to London where he met the proprietor of the London Times, Lord Northcliffe. Sir Keith learned a great deal about the newspaper publishing business from Northcliffe which he would later teach to his son Rupert. Late in 1920, Sir Keith was offered the editorship of the Melbourne Herald. After accepting the position as editor of the Herald, Sir Keith expanded its circulation from 100,000 to nearly 140,000 within a year (1997, Shawcross). He continued to expand the Herald’s assets by acquiring and launching several magazines including the Sun News Pictorial, a competitor of the Herald. In 1931, Sir Keith joined the Adelaide News board of directors. His goal was to build a newspaper and publishing business for his only son Rupert. Although successful for many years, the competition was cut-throat and by the time Sir Keith passed away in 1952 most of his companies’ assets had to be sold to pay creditors. The piece of the company that remained to be inherited by Rupert was the small newspaper of Adelaide which would remain very near and dear to his heart.
Rupert Murdoch was the only son of four children. He was born in Melbourne, Victoria-Australia on March 11, 1931 (2001, Chenoweth). He had one older sister, Helen, and two younger sisters Anne and Janet. From an early age Rupert loved spending time with his father at the printing presses. He loved the smell of the fresh ink and the excitement that surrounded the company. His parents set high, Christian standards. They taught them money was not to be taken for granted. Rupert also enjoyed spending time with his maternal grandfather Rupert Greene. “Pop” Greene was a colorful character, unlike Rupert’s father’s side of the family which were serious minded, Scottish Christians. Elisabeth Murdoch was quoted as saying, “On Keith’s side he [Rupert] is all Scottish. That’s what makes him good. But he probably gets a bit of color and zest from my side of the family. Perhaps Rupert inherited his gambling instinct from my father.” (1997, Shawcross). In addition, Rupert himself stated, “My father thought he [Pop Greene] was a wild, drinking, gambling man. They all got along for the sake of family life, but it was one of my father’s nightmares that I’d turn out like my grandfather, which I probably did, a bit.” (1997, Shawcross).
At the age of ten, Rupert was sent off to Geelong Grammar School and didn’t fair well. He felt like a loner in school and was bullied, probably due to his father’s unpopularity being a newspaper baron. Worcester College in Oxford followed boarding school. His father had hopes that Rupert would enter the newspaper business after graduation. Sir Keith arranged a summer job for Rupert at the Gazette in Birmingham, Great Britain. Rupert enjoyed his time at the Gazette and was active in school. In 1952 he launched a campaign for the position of secretary of the University Labour Club. Rupert continued to tour Europe and write. He began spending time with an Australian couple by the name of Rohan and Nan Rivett who were family friends of the Murdochs. Rohan Rivett was the Melbourne Herald’s London correspondent. The Rivett’s had a positive influence on Rupert and he enjoyed their time and travels together.
After Rupert sent out a letter to his parents that arrived on October 2 1952, Sir Keith felt as if Rupert had finally got it, meaning, he thought Rupert was maturing responsibly and had developed good judgment. Later that night, October 4-5, 1952, Sir Keith died in his sleep (1997, Shawcross). Rupert was unable to get back for the funeral in time. Sir Keith had left Rupert with some shares of stock in Queensland Newspapers and a major part of Cruden Investments which included Brisbane and Adelaide stock. Due to the financial woes of his father’s company in the late years, Rupert’s mother thought they could not afford to keep both the Adelaide News and the Brisbane Courier-Mail newspapers. Thus, all the inherited assets were sold to support the Murdoch family except for the Adelaide News.
After completing a short stint at the “Daily Express”, a racy London newspaper, Rupert Murdoch officially took over the Adelaide News in 1954 (1997, Shawcross). He was in constant worry over the future of the News due to the stiff competition of the Adelaide Advertiser. Rupert learned from Lord Beaverbrook at the Daily Express that the best way to run a newspaper was to acquire enough stock in the company to be independent. Beaverbrook told Rupert, “If you work for me, you will never become a millionaire but you will live like one.” (1997, Shawcross). Rupert decided then he would be working for himself and become a millionaire on his own.
In March of 1956 Rupert married his first wife Patricia Booker (2005, January). Rupert and Patricia’s daughter Prudence was born two years later in August of 1958. His marriage and the birth of his daughter didn’t slow Murdoch’s work down. In the late 1950’s he decided to purchase a Melbourne-based magazine called New Idea, as well as, a second newspaper, the Sunday Times in Perth. By May of 1960, Murdoch was officially expanded into Sydney with the purchase of the Daily Mirror (1997, Shawcross).
After the expansion outside of Adelaide, Murdoch and his company then named News. Ltd. set their eyes on America. Murdoch wanted to enter the broadcasting industry in the U.S. He made regular trips to New York which he loved. Rupert was very eager to access the U.S. market due to its trends with the television. Later on, Murdoch was quoted as saying, “In the 1950’s you had to be in TV…and to be in TV you had to be into America.” (1997, Shawcross). Murdoch made many network contacts in the States. Leonard Goldenson of American Broadcasting Company was probably the most important. Murdoch allowed Goldenson to purchase stock in News Ltd. Goldenson could see the potential with television broadcasting on an international scale.
While making important contacts in the States, Murdoch was also expanding in Australia and London. On July 14, 1964, News Ltd. rolled out Australia’s first continent-wide daily newspaper called the Australian. Murdoch created the newspaper from a secondhand printing press in the nation’s capital of Canberra. Although Murdoch never really liked England, he made millions there. On January 2, 1969 Murdoch gained control of News of the World in London and by October of that year he purchased the London Sun (2005, January). In the Sun, Murdoch’s infamous third page topless girls were as hot as the radical front page headlines. The Australian would later become the company’s flagship but a non-profiting newspaper. Later, the Australian would be financed by the London Sun and News of the World. However, at this point, the Sydney Mirror was the backbone financial support for the company (1997, Shawcross).
Murdoch’s marriage to Patricia had failed and on April 28, 1967 he married his second wife Anna Torv. Anna came from a poor Catholic family who immigrated to Australia in the early 1950’s from Europe. Anna was a beautiful blond and very ambitious. Her goals were to become an actress or a journalist. Anna took a financial clerk position at the Sydney Mirror and moved up the ranks to editor of the cadet newspaper. Anna Torv decided to interview Rupert (the boss). Later on, Rupert stated, “I thought she was a very pretty girl. Her writing skills were not going through my mind.” Anna said later she was immediately attracted to him, “He was like a whirlwind coming into the room…it was very seductive” (1997, Shawcross). After marrying, Anna and his daughter Prudence accompanied him on trips to Europe and the States. In the late 1960’s and early 70’s, Rupert and Anna’s children were born. Elisabeth was born in 1968, Lachlan in 1971, and James in 1972 (2005, January). The Murdoch’s threw lavish parties through these years at their old stone house in Cavan not far from Canberra.
The London Sun and News of the World were profitable to the company in England. However, Murdoch was determined to enter the U.S. industry. On October 25, 1973 News Ltd. purchased two newspapers in Texas, the San Antonio Express and News (2001, Chenoweth). After the purchase, the Murdoch’s moved to New York City. Both Rupert and Anna loved the city. They were never fond of London and Rupert knew he wanted to be part of the excitement the industry offered in New York City. Murdoch’s strategy in the newspaper industry was to set his eyes on purchasing the struggling, “underdog” papers of a city. Rupert would purchase the paper and begin slashing costs, including employees of course. He would strip them down, spice up the headlines and bring them back to life. With his mind set on a purchase, Rupert didn’t care if the price was high. If he wanted the company, he would pay a higher price to get it.
In the winter following the purchase of the Texan newspapers, Rupert focused on the launch of his first national newspaper in the States, the National Star. Later the National was dropped and is currently named the Star. The National Star was direct competition to the National Inquire. With its bold, radical headlines the paper caught the attention of American readers. Murdoch began as a left-wing liberal and later moved to the right-wing conservative views. However, he always had a flair for bold headlines that some viewed as “less than trustworthy” news. This was particularly evident in his infamous New York newspaper. November 19, 1976 Murdoch bought the New York Post from Dolly Schiff for an estimated $30 million (2001, Chenoweth). News Ltd. would also acquire New York Magazine and the liberal newspaper, the Village Voice. During the New York City blackout in July of 1977, the New York Post’s headlines read, “24 Hours of Terror: A City Ravaged” (1997, Shawcross). The Post also picked up heavily on the Son of Sam killings that summer.
An area of great importance to Murdoch was satellite communications. Although Murdoch was quoted as saying he regretted his lack of interest in cable, he was fascinated by a man named Arthur Clarke. Clarke was credited with the concept of satellite communications (1997, Shawcross). Clarke worked out his theory of satellite communications and was astounded by the rapid advancements in technology that brought it to reality. By 1964, Intelsat (International Telecommunications Satellite Consortium) was formed to direct the organization of this advancing technology. Intelsat had control of 14 satellites in the Clarke Ring and had members from 100 countries. Murdoch saw great potential in satellite communications and knew it was a way to expand his global communications empire. While Murdoch was expanding his corporation with the purchase of the “underdog” newspaper, the Herald in Boston, he jumped on the Clarke Ring and bought into Skyband. The company offered monthly subscriptions for movies and sports. However, it appeared that Murdoch’s vision of satellite broadcasting into private residences was premature. The use of large satellite dishes for residential use was not very appealing and Murdoch pulled out of the investment taking $20 million in losses (2001, Chenoweth). It wouldn’t be until 2003 that News Corporation would gain 34% of controlling stock in Hughes Electronics and Murdoch would have his vision of direct satellite broadcasting into millions of private residences world-wide a reality. Owned by General Motors, Hughes Electronics is the broadcaster of DirecTV (2002, Rohm).
Much to Rupert Murdoch’s surprise, in January of 1981 with the purchase of the London Times and Sunday Times a 5% stockholder’s share of Reuters was included. The stock in Reuters became a gold mine. Reuters had a reputation of safe reliable news and with the leasing of transatlantic cable circuit lines the company increased its revenue from ₤13.8 million a year to ₤180 million within 10 years (1997, Shawcross).
The 1980’s lead to more of the Murdoch empire expansion especially in the U.S. Murdoch’s right-wing views connected well with the Republican views of Ronald Reagan and Margaret Thatcher. Murdoch’s support for Reagan and Thatcher showed his strong interest in the political arena. The 1980’s brought about some interesting events in Murdoch’s quest for entering the entertainment industry in the States. Murdoch set his eyes on Warner Communications which infuriated Steve Ross, Warner Communications chairman. By 1983 Warner stock had dropped dramatically and News Corp began buying up stock in the company. In December of 1983, News Corp announced its purchase of 6.7% of Warner Brothers Studios. Ross began to worry that News Corp may be able to take the company over soon. The fight was on. After court battles, Warner was able to hold on to its company by buying back News Corp’s stock shares at a $40 million profit for Murdoch (1997, Shawcross). By this time, News Corp’s mammoth size and access to resources made many companies very concerned about hostile takeovers. News Corp’s interests in a company lead to mergers and acquisitions to ward off the giant.
Although wealthier from the Warner settlement, Murdoch still had his focus on Hollywood. On March 21, 1985, News Corp announced its purchase of 50% of Twentieth Century Fox for $250 million (2005, January). Murdoch bought the 50% from Marvin Davis. The other 50% was owned by Barry Diller. Although not fond of partnerships, Rupert stated he would rather own 50% of a film company than none at all. Later that year, Murdoch would buy out Diller for the other 50% of the company for $325 million (2002, Crainer). The deal was a milestone for Murdoch. He accomplished the goal of owning his own major film company. Moreover, this company would become the basis for his vision of a fourth major network in the U.S. In addition, it would allow him the rights to multiple movies and provide programming for his global enterprises.
One of the most important acquisitions to Murdoch’s development of a fourth network came with the seven Metromedia television stations. These television stations which were located in 7 major U.S. cities allowed Murdoch to form his much anticipated Fox Television Network. Prior to launching Fox Network, a realization for Murdoch was the fact for this to happen he would need to become a U.S. citizen. The U.S. Communications Act clearly states, “No corporation can hold a broadcasting license if any officer or director is an alien…” (1997, Shawcross). On September 15, 1985 Rupert Murdoch gained U.S. Citizenship on Ellis Island. This decision was only one of many controversial moves made by the media giant.
With the buy of the Chicago Sun-Times in 1983 for $90 million Murdoch’s News Corp continued to build its power across America. Murdoch, like his grandfather “Pop” Greene was never fearful of a gamble to get what he wanted. Ted Turner was not an exception to that rule. The two media giants have battled head to head throughout the years. Both of these billionaires’ high profile lives, personal struggles, marriages, and remarriages have captured the attention of tabloid television and gossip columns. News channels have been one of their largest battles. When Murdoch launched Fox News Channel, Ted Turner’s CNN had direct competition which would cause Turner trouble for years (2003, Hack).
Although the 1980’s were good for Murdoch in the States, the London newspapers were being strangled by the labor unions. Murdoch’s newspapers were not the only ones being strong-armed by the unions. Other British newspapers were also in demise. On January 24, 1986 talks between management and the unions broke down and strikes were called at the Sun and News of the World. Murdoch had been preparing for this day nearly a year in advance. Murdoch had been secretly building a printing factory in Wapping, England large enough to print his four London newspapers. The new plant in Wapping was a big gamble for Murdoch. If the unions wouldn’t have gone on strike, he would’ve had to pay both the Fleet Street employees as well as the new employees at Wapping. This situation could have crippled his company. Upon the strike, only a slight majority of journalists obeyed Murdoch and went to work in Wapping. Murdoch was determined not to fall to the mercy of the labor unions. His plant in Wapping was highly guarded and surrounded with barbed-wire. The newspaper distributing and supplies trucks would convoy late at night on varying schedules to deter physical outbreaks of violence by picketers. In the end, Murdoch claimed a fairly inexpensive victory over the unions. The value of Murdoch’s London papers rose from $300 million to $1 billion with the relocation to Wapping (1997, Shawcross). His ruthless, ingenious business strategy had the financial world singing his praises while others, including his journalists and other employees saw him as the “Supreme Satan” (1997, Shawcross).
Through the highs and lows of the 1980’s Murdoch continued to be the sole leader of his media empire. William Shawcross, in an unauthorized biography of Murdoch stated that Murdoch was always involved with all of his companies. Shawcross depicted Murdoch as a leader who would read weekly financial reports on his companies and if changes were needed to improve revenue he would start making calls or travel to the troubled areas promptly (1997, Shawcross). The end of the 1980’s would yield yet another opportunity for Murdoch’s News Corporation. In 1989 News Corp launched Sky. Murdoch combined his satellite company, American Sky Broadcasting with a small satellite company called Echostar in Colorado. Sky satellite broadcasting was to offer 500 channels including local stations over an 18-inch satellite dish (1997, Shawcross). The venture was immediately attacked by the cable industry and dubbed “Death Star”. Sky would later merge with Hughes to form DirecTV as known today. Sky satellite broadcasting also branched into other regions of the world including Europe, Asia, and Latin America.
Whether admired or hated, Rupert Murdoch has been extremely successful in his entrepreneurship and a leader of the Information Renaissance. From his inherited small town Australian newspaper to the media empire today, Rupert has made the journey. He has been the epitome of the American dream. Through mergers and acquisitions, Murdoch has been able to develop his company into one of the four largest in the world. No other company has quite the global outreach as News Corp and the resources to maintain its mammoth size.
Murdoch has been labeled by some as a “yellow journalist” and a greedy mongrel on a power trip. Nevertheless, he has come out on top. There is a fine line between crude business deals and illegal acts. Murdoch, threw his brilliance and perseverance, has been able to stay in the game. With well-known holdings such as the Los Angeles Dodgers baseball team, TV Guide, Twentieth Century Fox, Fox Television, Fox Sports, HarperCollins Publishing, as well as, multiple high profile newspapers and magazines, Murdoch has been able to support his empire through struggling times.
Sources:
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(2005). News Corporation: Corporate Profile. Retrieved July 5, 2005 from http://www.newscorp.com/investor/index.html
(2005, January). Ketupa.net Media Profiles: Murdoch and News. Retrieved May 24, 2005 from http://www.ketupa.net/murdoch3.htm
Chenoweth, N. (2001). Rupert Murdoch: The Untold Story of the World’s Greatest Media Wizard. New York, NY: Crown Business.
Crainer, S. (2002). Business the Rupert Murdoch Way: 10 Secrets of the World’s Greatest Deal Maker. Oxford, U.K.: Capstone Publishing Limited.
Hack, R. (2003). Clash of the Titans. Beverly Hills, CA: New Millennium Press.
