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http://www.foreignpolicy.com/story/cms.php?story_id=3655Think Again: Rupert Murdoch
By Rik Kirkland Page 1 of 3
January/February 2007
The CEO of News Corp. has been injecting his personal views into the press and promoting provocative entertainment for nearly four decades. But the tycoon is no tyrant. He’s less powerful than you think and not the evil genius you fear.
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Even so, Murdoch’s position as the king of media is slipping. For one thing, the satellite-television system he cobbled together after a 20-year struggle may soon unravel. Rupert recently announced that he was close to swapping assets with cable billionaire John Malone in order to buy back Malone’s 19 percent stake in News Corp.—a stake that uncomfortably rivals Murdoch’s 30 percent hold over his own company’s shares. The price is likely to be News Corp.’s dominant position in DirecTV. Such a deal would leave Murdoch without a digital distribution platform in the critical United States market.
For another, Wall Street analysts don’t share the public’s outsized view of Murdoch’s might. At current share prices, they give News Corp. a total market capitalization of some $68 billion. That’s on par with Disney, but still less than archrival Time Warner, whose market cap is roughly $81 billion. (Disclosure: Time Warner was my longtime employer and still helps pay my mortgage.) More importantly, none of the traditional media giants comes close to the value that moneymakers are placing on eight-year-old new media upstart Google, which is currently worth more than $150 billion. After a remarkable four decades of striving and reinvention, Rupert may soon be yesterday’s most powerful media titan. ....
Although most of his news outlets have openly advanced a broadly conservative agenda, Murdoch himself has been a consistent proponent of a particular type of conservatism. As he told me back in 1984, when I first wrote about Murdoch for Fortune, he has always been “very much for small business and the small man.” This Murdochian little guy is a pragmatist, not a moral or intellectual conservative. He is typically anti-union and pro-market, likes a strong defense and strong leaders, and enjoys seeing the high and mighty taken down a few pegs. He’s deeply suspicious of the power of pointy-headed bureaucrats, whether they reside in Washington, Brussels, or Beijing. ....
But a progenitor-to-offspring handover is no sure thing. Murdoch controls News Corp. through a trust he set up decades ago to avoid the kind of Australian estate taxes that nearly wiped out the family’s media empire when his father died. Rupert used to control the trust, but as the price for a relatively peaceful divorce in 1999, Murdoch agreed to share power with the kids. He retains the right to appoint four trustees, and the four grown children now get one vote each. When Rupert dies, his votes vanish with him. His children will then need to decide who among them deserves, or even wants, the crown. Even after that, there’s still no guarantee they will prevail. ....
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