Is the old bruiser about to come out fighting?
Murdoch’s sale of personal shares may well be driven by pressing Newscorp needs
Rupert Murdoch sold the vast majority of his personally controlled non-voting shares in Newscorp at some point in the last four weeks. It doesn’t dilute his control over Newscorp, but it does beg several questions. None of them were being answered last night by Jack Horner, a News Corp. spokesman, who declined to comment. He sat in the corner sucking his thumb, having no plum to offer us.
Murdoch sold at the highest point of Newscorp share values this year, and according to the record books this is the biggest non-deal connected sale he has ever undertaken. He was out to raise the maximum in cash. Why?
There are Hackgate rumour-mongers who insist that the ageing news tycoon needs some walking-around money to buy protection for his son….or buy off American victims likely to blow the hacking scandal apart in the States…or to buy inaction from some of the government agencies involved in its investigation. Here in the UK, for example, victims with strong evidence of post-2006 hacking of their phones are still being given hush-money. But this facade too is starting to crack. After this year’s revelations about Newscorp payoffs, company money is not as discreet as it was.
I don’t know of anyone even close to standing that one up. But I do know that – in the UK market especially – some of the Murdochs are already thinking beyond even Newscorp itself.
‘Forced’ to close down their News of the World title earlier this year, Newscorpers continue to maintain that in turnover terms, the NoW was “a minute part of our global turnover”. But figures from the company’s accounts suggest that in margin terms, it had been a massive profit centre, easily mopping up a high share of Sunday news sector advertising on the basis of its salacious content. It is also a myth that the Murdochs ‘bowed to public pressure’ in closing the paper: its closure came as a bolt from the blue. Newscorp closed NoW because the advertisers had all pulled out, and it represented a crippling overhead….at a time when Newscorp per se was assailed by hacking problems. The ‘spin’ about ‘doing the right thing’ was and is bollocks.
Then there is the problem of Murdoch’s paywalls. Although doing well on premium-content titles like the Wall Street Journal, the push earlier this year to boost the UK Times titles is now stuck in the mud. Times Newspapers is continuing to see digital subscription gains – but growth is slowing, and the boost to print sales has proved short-lived….in fact, it’s gone into reverse. The Times, for example, now has 111,036 digital subscribers….woefully short of what the Wapping Liars projected two years ago. The Sunday Times has even less, at just over 75,000.
As regards the Sunday situation, the simple reality is that in 1991, the sector all up sold an average of 16.2 million copies. By 2001, that total had slipped to 13.6 million. This year’s atd is down to a mere 8.3 million. Thus, Roop faces a triple whammy of problems: first, he’s in a dying sector; second, the paywall experiment hasn’t worked; and third, he’s lost an enormous revenue stream from the News of the World.
Despite confident predictions of a Newscorp return to the sector last July, the Murdochs haven’t looked at a disguised relaunch (or ‘Sunday Sun’) as yet. In truth, the sector’s potential is very limited: although few outside the business realise this, fully 700,000 Screws readers simply stopped buying a newspaper on Sundays. I think two factors here are key. First, Sunday activities have changed. The Sunday snooze and gradual hike through umpteen sections is becoming a thing of the past: the so-called day of rest is in fact much more these days one of outdoor activities. Shopping is one…and ironically, for some folks, another is going to watch Sky soccer down at the pub….a development pioneered and driven by the Digger himself.
Second, other daily newspapers these days increasingly fill the role once played by the NoW in particular. Ironically, this too has been led by Newscorp’s Sun. There is a degree to which, in the longer term, Murdoch has eroded his own core power-base.
As for the Sunday Times today, the kind of time starvation mentioned above – plus of course the arrival of online versions of the Sundays – has bitten deep into its raison d’etre. How many times have we all looked at a pile of unread sections the following Tuesday?
The daily Times itself is a different issue. The product has become, especially over the last year, unutterable crap. During that time I have read maybe a dozen issues, but the point at which I really noticed the fall in quality was on our return from France six weeks ago. The columnists are second-rate, and the ‘news’ is generic stuff either seen on TV news the night before – or before leaving the house that day…or recycled from earlier Sunday editions. You can read it in under ten minutes. That’s not even true of the Daily Mail…and in that latter case, much of one’s consumption is slowed down by having to blink at the crass idiocy and/or alarmist bigotry of the content.
Here yet again, Sky News has cannibalised much of Murdoch’s opinion-leader readership. Sky’s business news offer is generally better than the Beeb’s news channel, and more European than either CNN or Bloomberg. But equally important, it’s yet another 24/7 operation. The only way forward for a quality print title in the 21st century is going to be stuff – either scoop analyses or dramatically expressed opinion – that you cannot get anywhere else….either online or off.
So: is a venture in the works? Although this is ‘personal’ money Roop has taken home, I maintain the prediction I made eight months ago: that Liz Murdoch has not been brought in to provide a nice figure in the boardroom. Of all the old boy’s progeny, she is by far the most talented. She’s also the only one who has made it without Dad. She is, too, the apple of his eye. There is a growing awareness in the Murdoch clan as a whole that, one way or another, they’re going to lose control of Newscorp: which may itself wind up too tainted and capable of eating itself to be a sensible long-term vehicle anyway. Never, never underestimate this family….it is always planning further ahead than most.
The word is that father and daughter have been discussing something of late, and it isn’t within the mainstream of Newscorp: it may in fact end up being an entirely separate family firm. Perhaps this is why the ailing patriarch has started to build up a cash mountain.
The Slog 