Biography of Rupert Murdoch

Author: (English) John C. Shroes
Translator: Fan Xinzhi et al.
Publisher:
Publish Date: 2001-09-01
Features: What is the most powerful and most profitable industry in the world today? ---- Information and Media; Which is the largest media company in the world? ---- The modern global media empire built by Rupert Murdoch. For many years, Murdoch has been trying to merge major newspapers, television stations, satellite networks, cable networks, and publishing companies. His firm determination, courage, and relentless efforts have brought him great rewards: currently, the media group he founded covers two-thirds of the world's population, making him the most influential person in the world ---- Click on the life trajectory of the media giant and unlock the secrets of Murdoch's success.
Excerpt: Australia: Business is like gambling
On Tuesday, November 20, 1979, Rupert Murdoch strode into his father's old office at The Melbourne Herald, located on Flinders Street. In this office, as a child, he first became fascinated with the newspaper and his father's power. He told the chairman of the newspaper that he planned to buy it. It was an exciting moment. Murdoch's move to realize his childhood dream coincided with his efforts to expand his group on a large scale. The funds for the acquisition mainly came from the profits of The London Sun. Its unique, rapid news reporting, sharp editorials, and the girls with bare breasts on the third page continued to win the favor of readers. In 1978, the newspaper finally surpassed the circulation of The Mirror with 4 million copies daily. Despite the endless conflicts between investors and unions, The Sun remains a source of funding for Murdoch's empire. In 1979, its pre-tax profits rose from ￡700,000 to ￡25 million. At Anna's urging, Murdoch turned his attention back to Australia. He planned to settle there or at least make it a more permanent base. When asked whether his decision was driven by business or personal reasons, he said: "Purely personal reasons. I think it's hard to predict what will happen to your children, but a convincing reason is that I don't want my children to be educated under the British public school system, because I feel that if they graduate from American public schools, they will never be able to shake off their conservative, confident, and upper-class attitude. If they want to make journalism their lifelong career, if they choose this profession, the values they grow up with in Australia will be better than anywhere else I can imagine. He plans to send them to a boarding school in Melbourne and consider Kawana as their home. By this time, Murdoch had become a more controversial figure, mainly because his political stance had changed. In 1972, his newspapers supported Gough Whitlam, who led the Labor Party to win the election. However, Murdoch was disappointed with Whitlam's socialist policies and anti-Americanism. In 1975, a constitutional crisis occurred, and the Australian Governor dismissed Whitlam and formally appointed his opponent Malcolm Fraser as Prime Minister. The Australian leftists were generally furious about this, and rumors spread that the CIA had intervened to oppose Whitlam. In the subsequent election, the newspapers owned by News Corporation took a tough stance against Whitlam. Journalists went on strike to protest the deliberate distortion of news reports to damage Whitlam's image. These disputes severely damaged The Australian and its position in the country. Many people could never forgive Murdoch and from then on regarded him as an American spy. Murdoch is now investing in the gambling industry. By the late 1970s, gambling—previously a domain of con artists and thieves—had begun to attract the attention of large businesses, mainly due to technological advancements. Gambling had always been a passion for Rupert Green's grandson, Murdoch. For decades, he was seen by the writers of major front-page news as a gambler: "Murdoch—the gambler is rapidly developing," "Murdoch—the gambler who can't afford to lose," "Murdoch—the gambler who only wins." In the 1970s, his newspapers began to engage in simple forms of gambling—lottery number games; readers of The Sydney Mirror, The London Sun, and The New York Post participated in bingo games. By the early 1980s, gambling had become an important part of the international entertainment industry. A large gambling company in the UK, Vernon, was very famous in Australia. Its owner, Robert S. Stansfield, struck a deal with News Corporation. Stansfield said, "With his distribution system, his marketing expertise, and his printing plant, Murdoch is a natural partner." By 1974, they obtained a license and became the sole operators in four states, the Northern Territory, and Canberra. In 1977, they expanded into the United States. New York State was eager to develop a low-risk, highly unequal gambling game. Stansfield and Murdoch competed for the contract for this project and chose the Princeton-based mathematical consulting firm founded by gambling theorist Oscar Morgenstern as their American partner. The company developed many mathematical models for the U.S. government, including the design of the space shuttle. Together, they won the exclusive right to operate lottery number games throughout New York State, a gambling game that was a variation of an old one and was becoming popular worldwide. In Australia, Murdoch and Stansfield partnered with a seasoned gambler, Kry Packer, to establish a lottery number games management company. They planned to compete in every aspect of highly unequal gambling across the Australian continent. The stakes in gambling were enormous: in Victoria alone, securing the exclusive right to operate lottery number games meant ￡30 million in revenue. The joint venture first formed a partnership with the New South Wales government to operate lottery number games there. Then it obtained the right to operate instant lotteries in Queensland. In 1983, Australians spent $12 billion, the British $20 billion, and Americans $80 billion on gambling. Meanwhile, Murdoch was expanding his television empire. Near Adelaide and the steel city of Wollongong, he still owned his television stations. Now he needed to find a way to acquire one of the three commercial television stations in Sydney—the Tenth Channel. His attempt was strongly opposed by the Australian Journalists Association and the Labor Party, who had been united against him since the 1975 election. However, after a long hearing by the Australian Broadcasting Tribunal, his application was approved. Then, in November 1979, he launched an attack on his father's old newspaper, The Melbourne Herald, offering to buy 50% of its shares at $4 per share. In panic, the shareholders of The Melbourne Herald turned to its old rival and partner, Fairfax & Sons. Fairfax was determined not to let Murdoch get the 51% stake he wanted and began buying shares in The Melbourne Herald. In just two days, Fairfax spent over $52 million to acquire 15% of The Melbourne Herald's shares. Murdoch completely underestimated the strength of the opposition and began selling his shares. However, the transactions were conducted in secret. He later recalled, "I hired another broker to sell my shares. They were still buying, thinking they were bidding against me." In fact, they were buying the shares Murdoch was secretly selling. Suddenly, the brokers for The Melbourne Herald and Fairfax realized what they had done. In a short time, Murdoch had made over $3 million in profit. Then he announced that his bidding was over. The stock price immediately fell. Even so, it was clearly worth it to Fairfax's management to bear huge losses to prevent Murdoch from getting involved in Melbourne's newspapers. Murdoch condemned Fairfax's partnership with The Melbourne Herald as "two incompetent management departments conspiring against the interests of their shareholders."