Murdoch Extends His Media Empire to the United States Summary

  • Last updated on November 10, 2022

By purchasing the New York Post, Rupert Murdoch extended his successful tabloid style of newspaper publishing from London and Australia to the United States. He continued to adapt his style in order to make his newspapers sell, and the established media had to scramble to maintain their subscription lists.

Summary of Event

In December, 1976, newspaper magnate Rupert Murdoch purchased the New York Post for $30 million from Dorothy Schiff. Murdoch’s premise in purchasing an American newspaper was founded on his previous success in publishing mass circulation newspapers. If his tabloid approach to journalism was successful in London and Australia, he believed, it should also be successful in the United States. Murdoch’s purchase created an international and transatlantic newspaper connection, one that rankled the established newspaper world of New York City and created contention in other parts of the United States. The U.S. publishing community generally opposed Murdoch’s incursion, partly because of his aggressive dealings in purchasing newspapers and expanding his paper kingdom and partly because of his tabloid format, which sensationalized the news and relied heavily on pictures. His formats were far removed from those of such major newspapers as The New York Times and the Christian Science Monitor, along with most other New York newspapers. News Corporation [kw]Murdoch Extends His Media Empire to the United States (Dec., 1976) [kw]Media Empire to the United States, Murdoch Extends His (Dec., 1976) [kw]United States, Murdoch Extends His Media Empire to the (Dec., 1976) News Corporation [g]North America;Dec., 1976: Murdoch Extends His Media Empire to the United States[02630] [g]United States;Dec., 1976: Murdoch Extends His Media Empire to the United States[02630] [c]Organizations and institutions;Dec., 1976: Murdoch Extends His Media Empire to the United States[02630] [c]Publishing and journalism;Dec., 1976: Murdoch Extends His Media Empire to the United States[02630] Murdoch, Rupert Schiff, Dorothy Chandler, Otis McDonald, George E. Kennedy, William

British journalist Anthony Smith, Smith, Anthony writing in The Nation, described Murdoch’s approach as an unceasing flow of titillation, sensationalism, and voyeuristic excitement, devoid of information. Edwin Diamond Diamond, Edwin later suggested in the same publication that Murdoch seemed unconcerned with the conventional standards of taste imposed by advertisers aiming at an educated middle-class audience. A journalistic variant of Gresham’s law appeared to be at work, in which newspaper publishers believed that bad journalism drives out good journalism. Murdoch believed that newspapers do not create taste, they merely reflect it.

Murdoch’s American advertising agency comprised a team that often repeated, “You’ve got to hit’em hard, mates, hard,” referring to the readers. Soon, Murdoch realized why his formula was not working in New York City as well as it did in London: The United States did not have the same sharply divided class structure. In 1977, Murdoch was asked in an interview whether his “cheeky working-class formula” was applicable to New York. Murdoch replied that New York City was middle-class and did not have a working class.

Lines of battle between Murdoch and the rest of the New York newspaper establishment were drawn even more sharply when the pressmen struck in 1978. Labor strikes;newspaper pressmen George E. McDonald was president of the Allied Printing Trades Council, the coordinating group to which nine of the ten newspaper unions belonged. He was also the president of the Mailers’ Union. William Kennedy was the president of the Pressmen’s Union.

Murdoch was serving as the president of the Publishers’ Association of New York City. Following a breakdown in negotiations, McDonald suggested bringing in Theodore Kheel Kheel, Theodore as a mediator. Most of the principals in the strike opposed bringing in Kheel. Kennedy feared that Kheel would be the middleman in a cabal of publishers and unions other than his. The publishers were wary because the peace Kheel had brought in past strikes had come at a high price. Joseph Barletta Barletta, Joseph of the Daily News had vetoed Kheel as a mediator in a Newspaper Guild strike at his paper the previous June. Distrust among the principals caused an early deterioration.

Meanwhile, McDonald planned a strike by his mailers’ union against the already struck newspapers as a means of giving himself sufficient direct involvement to call for Kheel’s designation as mediator. Once Kheel was called in as mediator for the mailers’ union, McDonald thought it would be natural for him to mediate the pressmen’s strike. Instead, Kheel suggested that he enter negotiations as an adviser rather than as a mediator. Kenneth Moffett, Moffett, Kenneth deputy director of the Federal Mediation Conciliation Service in Washington, D.C., thought that Kheel could be a positive influence.

A controversy occurred when Murdoch learned of a private meeting between Kheel and Walter E. Mattson, Mattson, Walter E. executive vice president and general manager of The New York Times. Murdoch was enraged because this meeting was contrary to the understanding he had when he became president of the Publishers’ Association. The original understanding was that none of the principals would discuss the terms of a settlement with anyone outside the group except by mutual agreement, and that Murdoch would be the central figure in all such moves. After a series of meetings and misunderstandings, Murdoch made a separate pact with the union and abandoned the bargaining table. He launched a Sunday edition of the New York Post, complete with a television supplement similar to one that the Daily News had been quietly planning. Murdoch thus expanded his subscriber base while other papers suffered from strikes.

After the strike was settled, the Daily News went on a campaign to bury Murdoch by going after his subscribers and advertisers in an effort to win them away from Murdoch and thus bring down his expanding newspaper kingdom. Joseph Barletta stated in a 1979 interview that newspaper publishing in New York is not an “old boys’ club,” but that if Murdoch was going to be a street fighter, the establishment could play his game.

By 1979, Murdoch still had only a small share of total U.S. newspaper revenues as well as a small portion of U.S. newspaper holdings. His sprawling international media empire annually grossed close to $600 million, netted more than $45 million after taxes, and sold two and a half billion copies of ninety-two publications, mainly in Australia and Great Britain. His American properties included the New York Post, the weekly Star, two papers in San Antonio, Texas, and the Village Voice. The Gannett Company Gannett Company during the same period published seventy-seven newspapers in thirty states, dwarfing Murdoch’s American holdings. The Times Mirror Company, publisher of the Los Angeles Times, made three times as much money as Murdoch’s entire empire. Otis Chandler, head of newspaper operations for that company, stated that he was waiting to see how long it would take for Murdoch to fail in the United States.

Rather than fail, Murdoch continually analyzed his losses and adjusted the formats of his papers. Although tabloids such as the National Enquirer existed prior to Murdoch’s arrival on the scene, those papers had gradually changed to adjust to the market. Murdoch also adjusted. After his use of lurid headlines pertaining to the Son of Sam murders in the New York Post, the Murdoch formula declined in the United States. Murdoch knew he had to adapt. By 1979, the New York Post began to display upgraded quality, even though it still featured crime, scandals, gossip, and occasional bouts of hysteria. The paper now carried a solid financial section and reported more international and metropolitan news. American newspaper publishers also learned from Murdoch. He was becoming part of the American newspaper establishment.

Significance

When Murdoch bought the New York Post from Dorothy Schiff in 1976, the initial reaction from the newspaper establishment was fear that the Murdoch format of sensationalism would squeeze out the more conservative papers that appealed to the middle and upper classes. Publishers also objected to his aggressive style of acquisitions. His style and format precipitated a “bury Murdoch” campaign. The Gannett Company, a complex of publications, organized an effort to identify and reclaim every subscriber who had switched to the Post.

Murdoch drew criticism and animosity while generating fear among the established newspaper publishers. His aggressive manner in acquiring newspapers was abhorred, and his tabloid format caused fear among more established publishers that the quality of the newspaper world was going downhill. Some observers believed, however, that American newspapers were becoming more elitist. Murdoch offered choices by offering another style of journalism. His presence in the American market worked in two ways. Murdoch continued to adapt his style in order to make his newspapers sell, and the established media had to scramble to maintain their subscription lists. At the same time that Murdoch was becoming Americanized, he prompted action in response to his style. Other publishers had to react, going after potential subscribers in a shifting demographic environment and making other changes in their publishing operations. Many of the changes should have been made twenty years earlier. Murdoch’s entry into U.S. publishing made his new competitors move faster.

Murdoch’s News International Company encompassed holdings in England, Australia, and the United States, resulting in an international press network different from any in the past. Murdoch kept a tight rein on every phase of his publishing empire, compared with the American style of departmental authority. Murdoch passed judgment on his publications in every department rather than assigning authority in the various phases of publishing. He even brought in American editors to replace some of his overseas editors.

Murdoch’s ownership of the New York Post from 1976 to 1988 was marked by flamboyance. Because of regulations forbidding media cross-ownership, Murdoch was forced to sell the newspaper in 1988. By 1993, The Wall Street Journal and The New York Times were carrying news of its bankruptcy and a subsequent bid by Murdoch to take over the newspaper once again.

A 1990 article in The Economist featuring Murdoch’s News Corporation described how nobody had exploited the booming media industry of the late 1980’s better than Murdoch. In addition, few had borrowed more money to do it. Murdoch’s willingness and ability to borrow money gave him opportunities unavailable to most others. Newspaper articles on his bids and holdings show years of being deeply in debt, but he always managed eventually to show a profit.

Murdoch continued, into the 1990’s, to make bids to purchase media holdings including newspapers, magazines, and radio and television stations throughout the world. Indeed, his establishment of the twenty-four-hour Fox News Channel Fox News Channel in 1996, and its almost immediate success in gaining a large viewership, vaulted him into the forefront of the cable news media. Fox News overtook Ted Turner’s Cable News Network Cable News Network (CNN) and claimed nine of the ten most-watched programs in the cable news category in 2004. The Fox News program Special Report with Brit Hume competed favorably with broadcast network news shows, and Fox coverage of the 2004 Republican National Convention surpassed that of the three major broadcast networks in viewership, suggesting that the Fox News Channel had come of age. News Corporation

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Chenoweth, Neil. Rupert Murdoch: The Untold Story of the World’s Greatest Media Wizard. New York: Crown, 2001. Through telling anecdotes, Chenoweth follows the trails of Murdoch and his rise to power—the key to which has been the media mogul’s grip on distribution.
  • citation-type="booksimple"

    xlink:type="simple">Diamond, Edward. “Low Road to Oblivion: Murdoch and the Post.” The Nation, May 24, 1980, 615-617. Explains what was often cited as Murdoch’s s formula: scare headlines, sex, scandal, and sensation, with a fifth s for New York-Studio 54 people. Explains the ups and downs in readership of the Post and how the newspaper shutdown of 1978 helped create a Post monopoly until the strike was over.
  • citation-type="booksimple"

    xlink:type="simple">Kennedy, Carol. “Tough Guy in the Gentlemen’s Club.” Maclean’s, March 2, 1981, 10. Theorizes about why Rupert Murdoch became so aggressive, suggesting that he tried to live up to his father’s reputation as a respected newspaperman. Also contains viewpoints of Murdoch’s executives.
  • citation-type="booksimple"

    xlink:type="simple">Kimmel, Daniel M. The Fourth Network: How Fox Broke the Rules and Reinvented Television. Chicago: Ivan R. Dee, 2004. Tells the story of how Fox, through shrewd programming tactics directed toward select audiences, became a serious competitor to the Big Three networks.
  • citation-type="booksimple"

    xlink:type="simple">Raskin, A. H. “A Reporter at Large, II: Intrigue at the Summit.” The New Yorker, January 29, 1979, 56-85. Penetrating report about the personalities involved in the pressmen’s strike of 1978.
  • citation-type="booksimple"

    xlink:type="simple">Reilly, Patrick M. “Murdoch to Offer Interim Proposal to Acquire Post.” The Wall Street Journal, March 26, 1993, p. B7. Describes Murdoch’s submission of a plan to a federal bankruptcy judge for the purchase of the New York Post.
  • citation-type="booksimple"

    xlink:type="simple">Shawcross, William. Murdoch: The Making of a Media Empire. Rev. ed. New York: Simon & Schuster, 1997. Well-documented biography of the media tycoon. Unfortunately, the book lacks 1990’s material.
  • citation-type="booksimple"

    xlink:type="simple">Welles, Chris. “The Americanization of Rupert Murdoch.” Esquire, May 22, 1979, 51-59. Explains how Murdoch created intense animosity in a short time. He brought his own “game rules” with him, but his rules and those of the newspaper establishment changed and to some extent meshed.

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