News Corporation: Corporate Profile

Media Management and Leadership
Spring 2010

Corporate Profile: News Corporation

From Riches to Über Riches, A Corporate History of New Corp

In 1952 Rupert Murdoch inherited 3 Australian papers from his father, Keith. Eight years later Rupert began acquiring media and has not yet ceased. Between 1960 and 1973 he acquired 8 newspapers and started one of his own. In 1973 he bought his first of many US papers. Other firsts for Rupert in the 70’s include getting the “Murdoch Amendments” passed in the Australian parliament, which changed media ownership laws that allowed him to purchase yet more media. Also, he launched his first tabloid, “The National Star”.
The eighties were when the real media feeding frenzy began for Rupert. News Corporation was officially born in 1980. By 1985 he had acquired so much US media that he had to get American citizenship, so that he could buy more. His holdings expanded into book publishing, numerous television stations and the FOX network is established. After acquiring numerous international newspapers, News Corp is bankrupt by 1990 and is forced to sell off some of its assets. In an attempt to diversify outside of the media industry News Corp begins to buy properties in sports. Including official broadcasting rights for the NFL. The rights to the NFL cost over a billion dollars but gave FOX the boost it needed at the time to stay afloat and compete with the top 3 broadcasters. By 2004 News Corp had managed to pull of duopoloies in LA, Washington DC, Orlando, Houston, Chicago and Minneapolis .
By the time this paper is passed in, FOX cable news will have hit its 100th month as being the top rated cable news channel , not bad for a news channel that got it’s start in 1996. Also in a time when newspapers are losing steam nationally, Rupert has set out to overtake the New York Times with his competing Wall Street Journal.
News Corp is the 3rd largest media company in the world (revenue-wise). In 2008 they brought in $33 Billion in revenue and trailed only Disney ($37.8 billion) and GE ($183 billion) out of the top 6 global media companies. News Corp is not only a media goliath, its content is wildly popular in the US and abroad. In its 6th week, Avatar, released by 20th Century Fox, earned $1.8 billion globally. Second only to Titanic also, a 20th Century Fox release .

Financials

On April 28, 2010 News Corp stock price closed at $17.88 per share with 798.52 million outstanding shares. According to these numbers News Corp’s current market valuation is $14.277 billion. In the second quarter of 2009, the company brought in $881 million in revenue and had $564 million in net cash from operating activities. Their long-term debt was at $13,435,000 and their total gross operating profit was $3,076,000 .

Corporate Structure and Governance
Attached is a map of the top four tiers of the corporate governance of the company. Underneath the shareholders and Rupert is the Board of Directors. Below the Board of Directors are all of the News Corp Executives. The information on the corporate governance map was provided by www.Newscorp.com. Also attached is a complete list of what News Corp owns outright and has partial ownership in.
The management style of News Corp really sheds light onto their success. Rupert often takes a vocal and leading role in aggressively pursuing new strategies. A recent example of this strike first businesses strategy is embodied in his attempts to save print newspapers (mainly his). Last year he threatened to pull the content from his papers out of Google. The Times, The Sunday Times of London and The Wall Street Journal are all behind pay walls now in an aggressive first step for his newspapers to gain back lost revenue. Meanwhile circulation and advertising revenue are in consistent decline across the industry. The second punch to the industry is Rupert’s outright crusade to take over the New York Time’s market share and advertisers.
According to a recent article in the New York Times, The Wall Street Journal lost $80 million last year and The New York Post loses about $70 million a year. Meanwhile, last year The New York Times made about $21.2 million in operating profit . Rupert is not afraid to lose a little blood in the matter, “Mr. Murdoch has a long history of going after rivals in an aggressive and public way to win over readers and advertisers. ” The potential gain in the market over his competitor is enough to merit such battles.
Roger Ailes is another example of the aggressive management style of the company. Ailes, (featured in the red star on the News Corp power map) is the Chairman and Chief Executive of Fox News Channel and Fox Business Network. He is also the Chairman of FOX TV stations and Twentieth Television. Roger Ailes got his start at in conservative media at age 27, working for the Nixon campaign. Many years of experience later he has become a savvy and aggressive business leader. When Ailes caught wind that Rupert was considering endorsing Barack Obama in 2008 in the New York Post, he threatened to quit. Rupert responded to Ailes putting his foot down firmly in this seemingly internal political spat by giving him a huge raise and having The Post endorse McCain. Ailes is famous in indignant liberal blogs for being unashamedly conservative and for the FOX news channels brand of “Fair and Balanced” reporting.

Strengths Weaknesses Opportunities and Threats

Relatively, News Corps debt is not very high to their net value. There is some cash on hand for the company to invest in the best way the leaders see fit. Which is what Rupert has been doing while setting his sights on the NYC local market. A major strength of News Corp is their willingness to be very aggressive in whatever their endeavors are, in the most recent case this means vying for the NYC market territory formerly occupied by the New York Times in a time of declining newspaper readership, nation-wide. This can also backfire in certain scenarios. If The New York Times actually put up a fight, News Corp might just end up throwing their money away and drain resources from other money making parts of the company, much like how the New York Post is a revenue sucker, thus weakening the entire structure.
Google is always a threat. No one realizes how much of a threat Google is to their business, because their credo is to, “Do No Evil”. There is also no (seemingly) linear focus to Google’s business plan. They come up form behind and they are quiet. That is Google’s strategy. Another inherent threat to or weakness of New Corp, as well as any other huge company, is that their size is often a detriment in a rapidly changing media landscape. There is always a tendency for large companies to be slow in reaction to new changes in the market place. Other weaknesses for Rupert’s media empire are familial disloyalty and the indignant liberal media. These may seem like trivial cracks in the façade of the third largest media company on the globe, but if the leadership grows complacent, changes hands or if conditions external to the company change, News Corp could lose its footing.
Another possible opportunity for News Corp may lie in their satellite TV infrastructure. There might be a way for them to harness what is there and use it to possibly enter the high-speed internet market. Currently the market for satellite television isn’t so hot, News Corp may as well try to make some money from their satellite infrastructure.


Conclusion:

News Corp is in a dominant position globally and has a very aggressive management style. This strike first competitive attitude of their leadership allows them to maintain their position as well as grow into myriad media markets. The management in the company also has symbiotic relationships with key government figures across the globe which also gives them strategic advantage over their smaller competitors. When Rupert, (now 79 years old) hands down the torch of his position as CEO and Chairman, it will be interesting to see how the media empire he created adapts.



News Corp holdings according to the Columbia Journalism Review
Television
Fox Broadcasting Company
Fox Television Stations
WNYW - New York City
WWOR - New York City
KTTV - Los Angeles
KCOP - Los Angeles
WFLD - Chicago
WPWR - Chicago
KMSP - Minneapolis
WFTC - Minneapolis
WTXF - Philadelphia
WFXT - Boston
WTTG - Washington D.C.
WDCA - Washington D.C.
KDFW - Dallas
KDFI - Dallas
WJBK - Detroit
KUTP - Phoenix
KSAZ - Phoenix
WUTB - Baltimore
WRBW - Orlando
WOFL - Orlando
WOGX - Ocala
WAGA - Atlanta
KRIV - Houston
KTXH - Houston
WTVT - Tampa
WHBQ - Memphis
KTBC - Austin
DBS & Cable
FOXTEL
BSkyB
Sky Italia
Fox News Channel
Fox Movie Channel
FX
FUEL
National Geographic Channel
SPEED Channel
• Fox Sports Net
FSN New England (50%)
FSN Ohio
FSN Florida
National Advertising Partners
Fox College Sports
Fox Soccer Channel
Stats, Inc.
Film
20th Century Fox Español
20th Century Fox Home Entertainment
20th Century Fox International
20th Century Fox Television
Fox Studios Australia
Fox Studios Baja
Fox Studios LA
20th Century Fox
Fox Searchlight Pictures
Fox Television Studios
Blue Sky Studios
Newspapers
United States
New York Post
The Wall St. Journal
Dow Jones
United Kingdom
News International
News of the World
The Sun
The Sunday Times
The Times
Times Literary Supplement
Australasia
Daily Telegraph
Fiji Times
Gold Coast Bulletin
Herald Sun
Newsphotos
Newspix
Newstext
NT News
Post-Courier
Sunday Herald Sun
Sunday Mail
Sunday Tasmanian
Sunday Territorian
Sunday Times
The Advertiser
The Australian
The Courier-Mail
The Mercury
The Sunday Telegraph
Weekly Times
Magazines
InsideOut
donna hay
SmartSource
The Weekly Standard
Big League
ALPHA
Books
HarperMorrow Publishers
HarperMorrow
General Books Group
Amistad
Caedmon
Avon
Avon A
Avon Inspire
Avon Red
Collins
Collins Design
Ecco
Eos
Fourth Estate
Harper Mass Market
Harper Pakerbacks
HarperAudio
HarperBusiness
HarperCollins
Perennial
Perennial Modern Classics
HarperCollins e-Books
HarperLuxe
Rayo
William Morrow
William Morrow Cookbooks
Children's Books Group
Amistad
Greenwillow Books
Joanna Cotler Books
Eos
Laura Geringer Books
HarperAudio
HarperCollins Children's Books
HarperFestival
HarperTeen
Katherine Tegen Books
Julie Andrews Books
Rayo
Trophy
HarperCollins International
HarperCollins Canada
HarperCollins Australia
HarperCollins UK
HarperCollins India
HarperCollins New Zealand
Zondervan
Other
Los Angeles Kings (NHL, 40% option)
Los Angeles Lakers (NBA, 9.8% option)
Staples Center (40% owned by Fox/Liberty)
News Interactive
Fox Sports Radio Network
Broadsystem
Classic FM
Festival Records
Fox Interactive
IGN Entertainment
Mushroom Records
MySpace.com
National Rugby League
NDS
News Outdoor
Scout Media
Rotten Tomatoes
AskMen
FoxSports.net
WhatIfSports
kSolo
Fox.com
AmericanIdol.com
Spring Widgets
News Digital Media
News.com.au
FoxSports.com.au
CARSguide.com.au
Careerone.com.au
Truelocal.com.au