Shortcuts / 26 September 2023
After a 70-year career, Rupert Murdoch has named his successor: his eldest son Lachlan Murdoch. The announcement comes as the 92yo media mogul gets set to step down from his management roles with his global media empire in mid-November. So in this Squiz Shortcut, we take a look at the power and influence Murdoch accumulated, the controversies that rocked his media empire, and the challenges ahead as the Murdochs move into the next chapter.
Before we start, what is this media empire we’re talking about?
We’re talking about News Corp and Fox Corporation – their operations are in the UK, Australia and the US, but their influence is far wider than that… Together they’re worth about $40 billion.
That’s not that big when it comes to company size, right?
For comparison, the Commonwealth Bank’s value is almost $170 billion, so News Corp and Fox are together about a quarter of the size of our biggest bank. But they are behind some of the world’s most influential publications and TV stations across the world, and that gives them power…
And how much do the Murdochs own of that?
The Murdoch family owns about 40% of the voting shares of those businesses.
What do they own?
Some of the most popular newspapers in the UK and the most popular news channels in the United States. And it’s long been the case that between 50-70% of all newspapers sold each day in Australia are News Corp.
How did it start?
With Rupert Murdoch’s father, Sir Keith. He was a prominent political journalist during WWI who became a media owner when he established a national chain of newspapers here including The Herald in Melbourne, what’s now The Advertiser in Adelaide, The Courier Mail in Brissie and The West Australian in Perth. And for media nerds, he also founded the Australian Associated Press (AAP) in 1935, which is the newswire service that provides content to all outlets for a fee.
It’s nothing to sneeze at. Sir Keith died in 1952 when Rupert was 22yo, and the business was passed on. After settling some debts, the main newspaper left was in Adelaide. It had been operating at a loss until Rupert took over and turned it into a huge success.
And then what?
Murdoch began his decades-long buying spree. He acquired other newspapers in Adelaide, Perth, New South Wales, Queensland, Victoria and the Northern Territory. And then in 1964, he created The Australian newspaper.
And then Murdoch set his sights on a bigger prize?
Yep, he started looking outside of Australia to build his media empire. In a flurry of activity at the end of the 1960s he bought 2 UK newspapers: News of the World and The Sun. And once again, he turned them into big commercial successes. Then he bought newspapers The Times and The Sunday Times, which really cemented his place as the king of media in the UK.
What’s his secret sauce?
People looking back at Murdoch’s rise have started to identify the Murdoch recipe for printing a successful newspaper. The Economist says Murdoch “invented the modern tabloid newspaper—a stew of sexual titillation, moral outrage and political aggression”.
When does the US come into the picture?
Murdoch began buying newspapers in America in 1973, and then in 1985 he became a US citizen – because only US citizens were allowed to own TV stations.
So he started moving into broadcasting?
Yep – it was in 1985 that he bought Twentieth Century Fox and turned it into 21st Century Fox. In the UK in 1990, he launched what would become Sky. And then in the US, he launched Fox News in 1996.
These are some big names…
Fox News in particular has been a lucrative success. It’s now the biggest primetime news channel in the US, and it has a huge influence on American politics. But it wasn’t all wins – back in 2005, Murdoch paid US$580 million to buy a website called Myspace.
I haven’t heard that name in a while…
That’s because Myspace turned out to be a dud. It very quickly became all about Facebook…
Apart from that, was it smooth sailing?
Absolutely not – there were some dramatic challenges to Murdoch’s media empire throughout his career.
So News Of The World was the biggest newspaper in the UK when claims emerged in 2010 that its journalists and private investigators had been illegally hacking into the voicemails of thousands of celebrities and other people in the news in order to get stories.
It was an enormous scandal in Britain, and some of the people involved went to jail. And it was a big hit to Rupert Murdoch’s empire: he shut down News of the World that year.
What other issues has Murdoch faced over the years?
More recently, there was a big challenge to Fox News in the US. A lot has been said about its role in the rise of Donald Trump, and the company got into a lot of trouble because of its coverage after the 2020 US presidential election.
The one that Trump lost to Joe Biden?
That’s the one – and Donald Trump said the election had been stolen from him, pointing to voting machines made by a company called Dominion. He said they had somehow rigged the election for Biden.
What does this have to do with Fox News?
Some hosts on Fox News picked up that theory and really ran with it. Dominion sued Fox News over its broadcast of the false claims, and that trial led to the release of internal documents showing the hosts didn’t actually believe it themselves.
That’s not great…
It was a reputational hit for Fox, and their most popular host Tucker Carlson lost his job. There was also a financial hit: Fox ended up settling the claim with Dominion just before trial for US$787 million. And it’s not over – there’s a $2.7 billion damages claim from Smartmatic, which is another voting machine manufacturer savaged by Fox’s on-air talent.
So Lachlan Murdoch is going to have his hands full when he takes over…
No doubt. He’s got those issues to manage, as well as all of the other problems that traditional news operations face: namely, being profitable in the era of digital disruption. That’s a hard thing to do in the newspaper business, and as for the cable channels, the question is how to keep those eyeballs as audiences shift towards streaming.
What’s the strategy?
So far they’ve largely been successful by picking a lane and being the best at it – and that’s been about producing content for an audience on the right side of politics.
And is he ready for it?
We’ll see… But keep in mind he’s been the executive chairman and CEO of Fox Corporation since 2019, and he’s also had several roles with News Corp over the past 30 years.
So this is it for Rupert?
Not at all… The 92yo may be stepping down as chairman of News Corp and Fox Corporation, but he says he’s staying on as Chairman Emeritus and will remain “engaged daily with news and ideas”. So he’ll remain at the centre of all the action.
Journalist Paddy Manning’s biography of Lachlan Murdoch, The Successor
Wondery’s podcast British Scandal on ‘The Murdoch Phone Hacking Scandal’
Squiz Shortcuts - A weekly explainer on a big news topic.
Get the Squiz Today newsletter
It's a quick read and doesn't take itself too seriously. Get on it.