News Corporation Limited History
Sydney, New South Wales 2010
Telephone: (02) 9288-3000
Fax: (02) 9288-3292
Sales: A$25.5 billion ($13.8 billion) (2001)
Stock Exchanges: Australia London New York New Zealand
Ticker Symbol: NWS
NAIC: 51111 Newspaper Publishers; 51113 Book Publishers; 51223 Music Publishers; 51312 Television Broadcasting; 51321 Cable Networks; 51211 Motion Picture and Video Production
We strive to produce and distribute the most compelling content to the farthest reaches of the globe.
- Rupert Murdoch takes over his father's business.
- News Ltd. launches TV Week.
- Cumberland Newspapers, the Sydney Daily, and the Sunday Mirror are acquired.
- The firm establishes Australia's first national newspaper, The Australian.
- Murdoch acquires The Sun, a British daily.
- News Ltd. enters the U.S. market with the purchase of three newspapers based in Texas.
- The firm buys the New York Post.
- News Corp. is reorganized as a holding company.
- The London Times, the Sunday Times, the Times Literary Supplement, and the Times Educational Supplement are purchased.
- News Corp. gains majority interest in Satellite Television PLC and purchases a stake in Twentieth Century Fox Film Corp.
- The Chicago Sun-Times is acquired.
- Murdoch acquires TV Guide and Triangle Publications; Fox Broadcasting Company begins operation.
- Sky Television is launched in the United Kingdom.
- Faltering under a huge debt load, News Corp. begins restructuring efforts.
- Murdoch sells TV Guide and offers 18.6 percent of the Fox Entertainment Group to the public.
- News Corp. gains full control of Fox/Liberty Networks by acquiring Liberty Media's 50 percent interest.
- Fox Family Worldwide Inc. is sold; Chris-Craft Industries is purchased for $4.4 billion.
News Corporation Limited is the holding company for the large range of enterprises created or acquired since the 1950s by the Australian-American businessman Rupert Murdoch. It operates as one of the five largest media conglomerates in the world with assets totaling $43 billion in 2001. The company's holdings include businesses involved in filmed entertainment, television, satellite and cable network programming, newspapers, magazines, book publishing, music, digital television technology, and online programming. News Corp. also owns 85 percent of the Fox Entertainment Group, 40 percent of the STAPLES Center--the home of the Los Angeles Lakers basketball team and the Los Angeles Kings ice hockey team--and major league baseball team the Los Angeles Dodgers. Nearly 75 percent of the firm's revenues stem from its U.S. operations, while Canada, Europe, the United Kingdom, Australia, Latin America, and the Pacific Basin region account for the remaining 25 percent.
Beginnings of News Coporation
Rupert Murdoch was born in Melbourne in 1931, the son of Sir Keith Murdoch, managing director of the Herald and Weekly Times newspaper group. Sir Keith did not own many shares in the group, but was the major shareholder in News Ltd., which published the Adelaide News and Sunday Mail, and in a Brisbane company whose two newspapers he amalgamated into one, the Courier-Mail.
Sir Keith died in 1952. After graduating that year, his son spent some months as a junior subeditor at the London Daily Express and returned to Australia in 1953 to take over the Adelaide newspapers. His father's executors sold the Courier-Mail to the Herald and Weekly Times group. In 1956, News Ltd. acquired the Perth Sunday Times; in 1957, it launched TV Week--inspired by the American TV Guide--which was to be the most profitable of all its Australian publications. In 1958, control of Channel 9, one of two TV channels in Adelaide, was awarded to Southern Television Corporation, in which News Ltd. had 60 percent of the shares. Murdoch's empire-building had begun.
The Building of an Empire: 1960s-1970s
The year 1960 was a watershed for News Ltd. It bought Cumberland Newspapers, a group of local papers in the Sydney suburbs, then acquired the Sydney Daily and Sunday Mirror from the Fairfax group. Rohan Rivett, the editor of the Adelaide News, became the first of many editors to be fired from Murdoch newspapers. Five weeks before his dismissal he had been celebrating his acquittal on charges of seditious libel. These had arisen out of the News' criticisms of a state government inquiry into the case of an Aborigine found guilty of a murder that Rivett, and Murdoch, thought he had not committed. His departure marked the end of Murdoch's leanings toward anti-establishment views.
In 1964, News Ltd. launched The Australian, Australia's first national newspaper, based in Canberra. Murdoch considered the venture prestigious enough to be worth a loss of A$30 million, over the course of 20 years, to keep going. Typesetting in Canberra and flying the matrices to Melbourne and Sydney for printing were difficult, and in 1967 the paper was moved to Sydney. In 1969, its latest editor oversaw its re-adoption of opposition to the Vietnam War, a return to the stance first espoused by the paper in 1965 when Australian troops were initially assigned there.
Murdoch, meanwhile, was in London. In October 1968, Robert Maxwell had offered to buy the United Kingdom's News of the World Organization (NOTW) for £26 million. The company owned the Sunday newspaper News of the World, the Bemrose group of local newspapers, the papermaker Townsend Hook, and several other publishing companies. It had been run since 1891 by the Carr family, which had now split into two factions, one led by NOTW's chairman, Sir William Carr, with 32 percent of the shares, the other by his cousin, Derek Jackson, whose decision to sell his 25 percent stake had precipitated the crisis. Maxwell, born in Czechoslovakia, was then a Labour member of Parliament. Maxwell's foreign origin, combined with his political opinions, provoked a hostile response to his bid from the Carrs and from the editor of the News of the World, Stafford Somerfield, who declared that the paper was--and should remain--as British as roast beef and Yorkshire pudding. News Ltd. arranged to swap shares in some of its minor ventures with the Carrs and by December it controlled 40 percent of the NOTW stock. In January 1969, Maxwell's bid was rejected at a shareholders' meeting where half of those present were company staff, temporarily given voting shares. Illness removed Sir William Carr from the chairmanship in June 1969, and Murdoch succeeded him. In 1977, just before his death, Carr wrote to Maxwell to express regret that he had spurned his original offer for NOTW. The News of the World remained the biggest-selling English-language newspaper in the world.
Murdoch next sought a British daily to accompany the News of the World. He found it in 1969, when IPC decided to sell off The Sun, which had been launched in 1964 but had never been profitable, with sales of about one million copies. Under Murdoch, by contrast, The Sun's circulation reached two million in 1971 and three million in 1973.
NOTW had added television to its list of interests in 1969, when it bought eight percent of the voting shares in London Weekend Television (LWT), a company created in 1968 to run commercial television from Friday evening to Sunday night in a large and lucrative region centered on the capital city. The holding was rapidly built up to 36 percent of the voting shares and Murdoch became a non-executive director of LWT. He promptly saw to the dismissal of its managing director and took the chair of the executive committee in charge of scheduling, thus running the station without having been awarded a franchise. The Independent Television Authority ordered LWT to put its affairs in order without Murdoch in charge. The controversy over this incident was revived in 1977 when the government-appointed Committee on the Future of Broadcasting made severe criticisms of the authority's failure to enforce its own rules. By that time, however, Murdoch had moved to the United States, and NOTW's shares in LWT were sold in 1980.
Back in Australia, Murdoch found that The Australian had become too liberal for his liking. In 1971, he dismissed its editor, Adrian Deamer, who had been in the post for three years--a remarkable record, considering that the paper would have 13 editors in its first 16 years. In 1972, News Ltd. bought the Sydney Daily and Sunday Telegraph from Packer's Consolidated Press, which had been losing circulation to the three Fairfax papers, the Sydney Morning Herald, the Sun, and the Sunday Sun-Herald. The ailing Sunday Australian was absorbed into the Sunday Telegraph soon afterward.
Murdoch had become close to Gough Whitlam, then leader of the Australian Labor Party, and gave A$75,000 to the party's advertising campaign in 1972. If this was a return to Murdoch's earlier radicalism, it was short-lived. Within three years his papers were attacking the Labor Party again, with The Australian, for example, using raw figures, rather than seasonally adjusted ones, to suggest, wrongly, that unemployment was rising. After the 1975 election, in which Whitlam was defeated, Murdoch himself, using a "special correspondent" byline, wrote a report for The Australian on the Labor Party's secret--and eventually fruitless--appeal to Saddam Hussein, the dictator of Iraq, for financial aid, which resulted in a meeting in Sydney between Whitlam and Saddam's nephew. Ironically, what appeared to be just more anti-Whitlam propaganda was true.
In 1973, the News group made its first American acquisitions, purchasing three newspapers in San Antonio, Texas. One of these, the San Antonio News, achieved brief but worldwide notoriety in 1976 with the striking but inaccurate headline "Killer Bees Move North." The next American acquisition, in 1976, was the New York Post, the city's only evening paper. This was swiftly followed, early in 1977, by the purchase of the New York Magazine Company, which published the magazines New York and Village Voice. The acquisitions were, in fact, accomplished so quickly that New York's proposed comment on the Post purchase, a picture of Murdoch as a killer bee, had to be dropped.
Murdoch's personal supervision of the Post led to an increased circulation, most notably through a series of reports on the "Son of Sam" serial killings, culminating in the misleading headline "How I Became a Mass Killer" over a selection of old and innocuous letters from the murderer to a girlfriend. The Post did especially well in the summer of 1979 when, armed with separate agreements with the unions, a long-running strike kept its rivals closed. The paper continued to suffer from financial problems, caused partly by the reluctance of the large department stores to advertise in such a down-market publication.
Murdoch did not neglect the Australian sector of his growing empire. In 1978, News Ltd. joined forces with the Packer's group and the British football pools company Vernons to start a New South Wales lottery. In 1979, it built up a 48.2 percent stake in Channel TEN-10, a Sydney television station. At the Australian Broadcasting Tribunal hearings into its purchase, Murdoch praised the work of its chairman and promised that the station would retain total independence without interference. Two weeks after the tribunal approved the change of ownership, the chief executive was replaced by a News Ltd. director with no television experience; two months later the chairman resigned.
A much bigger acquisition followed, also in 1979, when News Ltd. gained control of ATI, a group of airlines and other transport firms. Its founder, Sir Reginald Ansett, stayed on as chairman of ATI, but Murdoch became chief executive. Murdoch agreed with Sir Peter Abeles, the chairman of the TNT transport group, that News Ltd. and TNT should have 50-50 ownership of ATI and that Abeles should become joint chief executive. There then followed lengthy public hearings before the Australian Broadcasting Tribunal on whether or not News Ltd. should be allowed to own a Melbourne television station, the original goal of the ATI/TNT dealings. The tribunal decided against granting approval, mainly on the grounds that a Sydney-Melbourne combination under one company would have too big a role in network operations. By the time of the ruling, however, News Ltd. had paid for the station and the statutory six months allowed for ordering divestment had passed; the tribunal's decision had no effect. The ruling was eventually reversed on appeal.
The current structure of Rupert Murdoch's group of companies also dates from the creation of News Corp. as the main holding company in 1979. In 1990, Murdoch owned only 7,200 shares in News Corp. itself, but he also had control of Cruden Investments Pty Ltd., which owned more than 116 million shares, about 54 percent of the total. In 2001, the Murdoch family controlled nearly 30 percent of the firm.
Focus on Publishing: Early 1980s
In 1981, News International, the British arm of the Murdoch group, acquired 42 percent of the voting shares in the British publishers William Collins and Sons and bought the London Times, the Sunday Times, the Times Literary Supplement, and the Times Educational Supplement from what is now The Thomson Corporation. Fifteen years earlier, Lord Thomson's own purchase of The Times and its supplements had been investigated by the Monopolies Commission, as Lonrho was to be investigated when it made a bid for the London Observer later in 1981. Yet the government of the day waived this requirement in News International's case.
At the same time as News Corp.'s image was being pushed up-market by these ventures, its down-market newspapers were all engaged in attracting more readers with an adaptation of bingo. In Britain, Sun bingo cards were sent to every household, and rival papers all picked up the game. It then spread to the Sydney Daily Mirror and to the New York Post, where it had to be renamed Wingo for copyright reasons. The rival Daily News responded with its own version, Zingo. Murdoch then went on to acquire the Boston Herald--formerly the Herald-American--in 1982 and the Chicago Sun-Times in 1984.
The Sun's editors Larry Lamb and, from 1981, his successor Kelvin McKenzie, brought the paper into line with Murdoch's political views. Thus in 1982, the paper offered enthusiastic support to the British forces in the Falklands War (as almost all the national newspapers did), but characteristically went further, marking the sinking of the Argentine cruiser General Belgrano with the headline "Gotcha!" and calling the BBC's defense correspondent and two rival newspapers traitors. The Sun remained the biggest-selling daily newspaper in the U.K. in 2001 with nearly four million more readers each issue than its nearest competitor.
Murdoch's up-market papers could be tempted by sensationalism as well. In 1983, News Corp. was severely embarrassed by the revelation that the much-publicized secret diaries of Adolf Hitler, which the Sunday Times planned to serialize under an arrangement with the German magazine Stern, were forgeries. Lord Dacre, better known as the historian Hugh Trevor-Roper, who served as one of the "national" non-executive directors of Times Newspapers, first declared that the samples he had seen were genuine, then told the editor of the Sunday Times that they were forgeries just as the printing of the world exclusive story began. Murdoch decided to go ahead with the printing; Stern had to return the money it had paid for the diaries, and the Sunday Times actually retained some of the extra readers the story had attracted to it.
The appointment of Andrew Neil as editor of the Sunday Times later in 1983 negated the guarantees exacted from News International by the British government two years before, since the required consultation with the newspaper's staff did not take place. Harold Evans had reluctantly resigned from the editorship of the Times in 1982, at Murdoch's request. Evans could have appealed over Murdoch's head to the "national" directors but chose not to do so, leaving the guarantees untested.
Diversifying Into Satellite Television: 1983
News Corp. first ventured into satellite television in 1983. It acquired majority holdings in Satellite Television PLC (SATV), which had been set up in 1980 to supply a U.K.-based service to northern Europe, and in the Inter-American Satellite Television Network, which was renamed Skyband Inc. and had its head office moved from California to New York. It was largely to gain access to a supply of feature films and television programs that News Corp. bought into the Twentieth Century Fox Film Corporation also in 1983. Within two years, with the News International papers all featuring articles attacking the BBC, SATV, renamed Sky Channel, had about three million subscribers in 11 European countries and was available in Britain on cable.
During 1985, Murdoch and his closest advisers planned the removal of all the News International papers from the Fleet Street area, the traditional base for national newspapers, to a plant at Wapping, in east London, where troubled relations with the print unions could be superseded by a single union agreement with the Electrical, Electronic, Telecommunications and Plumbing Union (EETPU). Electronic typesetting equipment was ordered, but kept hidden from the print workers; the EETPU recruited new production staff, and then, when the plant was ready, the journalists on the four newspapers were given from one to three days to move or to leave the company and the plant began producing papers in January 1986. It was not only the 5,500 sacked print workers who felt somewhat betrayed after this dramatic move. The EETPU never did get a single union agreement, and News International did not recognize any trade unions. In 1987 the British company acquired a fifth newspaper, Today, from the company Lonrho--which had bought out the newspaper's founder, Eddy Shah--soon after its launch in 1986.
Growth Through Acquisition: Late 1980s
While 1986 was a year of triumph for Murdoch in Britain, in Australia it was a year of retreat. News Ltd. sold off both Channel TEN-10 in Sydney and ATV 10 in Melbourne, as well as radio stations, a record company, and three newspapers. However, 1987 was the year of the acquisition of the Herald and Weekly Times group once run by Murdoch's father. Shortly before the deal went ahead, Murdoch had a private meeting with the prime minister, Bob Hawke, and the treasurer, Paul Keating, and his Australian newspapers all switched political allegiance to Labor, the governing party. The purchase of the Herald and Weekly Times group cost A$2.3 billion, was the biggest single takeover of newspapers ever accomplished, and made News Corp. the largest publisher of English-language newspapers in the world. Shortly afterward the chairman of the Australian Press Council resigned in protest at the government's failure to invoke the Foreign Takeovers Act against Murdoch, for by this time Murdoch had become an American citizen. It was not until 1989 that newly released government documents revealed that the Foreign Investment Review Board had opposed the acquisition, although Prime Minister Hawke declared that it had not.
News Corp. ended 1987 with two more purchases, the South China Morning Post, the most important English-language newspaper in Hong Kong, and the American publishing house Harper & Row. It then sold 50 percent of Harper & Row to William Collins and Sons. This arrangement lasted only until April 1989, when News International bought Collins outright. HarperCollins Publishers, created as a merger of these and other book and map publishers, is now the largest English-language publisher in the world.
In 1988, three decades after he had borrowed its format for his own publication on television, Murdoch bought the American magazine TV Guide and the company that published it, Triangle Publications, for $2.83 billion. Fox Broadcasting Company started up during the same year as the first new television network in the United States to challenge the long-established trio of ABC, CBS, and NBC. Its huge initial costs were reduced, fortuitously, when a Hollywood writers' strike allowed it to run a large number of repeats, and it broadcast at first only on Saturdays and Sundays.
Financial Woes: 1989-1990
In February 1989, Sky Television was launched in the United Kingdom as a four-channel service available at first only on cable but increasingly via satellite receiver dishes. By the summer of 1990, it was reaching 1.6 million households, but the losses incurred in its development were a major cause of declining profits for News Corp., along with the eight-month-long airline pilots' strike in Australia. It was claimed that profits would have been higher than in the financial year 1988-1989 if these two factors were excluded. Profits were also being eroded by the rising cost of interest payments on the group's rising level of debts.
Murdoch had once said that he never gave anyone shares but just borrowed to finance expansion. The next year or two revealed the disadvantages of that policy, as the sale of his Australian book publishing and distribution companies in June of 1989 proved to be the start of a trend, though revenue and profits from most of News Corp.'s subsidiaries continued to grow. In 1990, it sold 49 percent of South China Morning Post (Holdings) Ltd., parts of its minority holdings in the news agency Reuters and in the publishers Pearson plc, the American publishing firm J.B. Lippincott, the British papermaker Townsend Hook, the Fox subsidiary DeLuxe Laboratories and the U.S. magazines Star and Sportswear International. Its acquisitions that year--25 percent of the Spanish publisher Grupo Zeta; the whole of F.F. Publishing and Broadsystem Ltd. in Britain; and 50 percent holdings, with Hungarian partners, in two publishing companies, Mai Nap Rt and Reform Rt--were relatively minor.
One way around the group's increasing financial problems was to juggle the figures in News Corp.'s annual reports. For example, the 1988 losses by News Ltd., the Australian division of the group, were shown as A$202 million in the 1989 report but as A$83 million in 1990, although the overall impact on group profits was said to be the same in both reports. Another way was to restructure the subsidiaries so that a higher proportion of group profits could be made in tax havens, such as Bermuda. In 1989, 25 percent of profits were attributed to tax haven companies; in 1990 the proportion was 54.5 percent, and News Corp.'s effective tax rate was 1.76 percent rather than the statutory 39 percent.
The merger of Sky Television with its smaller rival, BSB, in November 1990 did nothing to stem the continuing losses from satellite television, since it meant that BSB's pound 380 million loan facility was withdrawn. It also turned out that neither company had consulted the Independent Broadcasting Authority, which licensed BSB's operations, and had thus breached the contract. Once again, as with ATV 10 in Melbourne, Murdoch presented the regulatory body with a fait accompli. By mid-1991, Sky, now renamed BSkyB, had swallowed up pounds 1.5 billion in investments from various shareholders, among whom News Corp. was the largest, with a 49 percent stake. Between August and December 1990, the value of News Corp. shares fell by two-thirds. The firm's debts, to 146 banks, stood at more than $8.2 billion, and Murdoch had to promise to repay $1.2 billion by June 1992.
In 1990, Murdoch began a well-planned, controlled restructuring of News Corp.'s massive debt. After months of foot-dragging, his banks arranged a refinancing package dubbed "Project Dolphin" that called for $7.6 billion to be repaid by 1994. In return, the interest rate on the debts was raised by a full percentage point, and Murdoch agreed to a fire sale on many of his recent acquisitions. Between February 1991 and February 1992, Murdoch parted with $800 million worth of businesses, including most of News Corp.'s United States magazines--New Woman, New York, and Premier--and equity in Group Zeta. In the process, Murdoch's equity in News Corp. was reduced to about 30 percent, thereby reducing his volatile influence on the company but retaining his marketing savvy.
As News Corp.'s stock price rose, it sold $180 million of convertible preference shares (a type of equity) to three American companies, then divested itself of 55 percent of its Australian printing and magazine businesses. The resulting new company, called Pacific Magazines and Printing, took A$300 million in debt from News Corp.'s balance sheet and raised A$382 million from investors via a rights issue.
By the end of 1991, Murdoch had won back the confidence of his banks. They agreed to extend News Corp.'s repayment schedule by three years, allowing him to carry $3 billion of debt that had been due in February 1994 until 1997. The banks also permitted News Corp. to pay some dividends and keep some of the proceeds of its asset sales.
Success After Financial Restructuring: Early-to-Mid 1990s
Against all odds, and to the surprise of many observers, Murdoch and News Corp. not only survived the largest restructuring outside bankruptcy court in history, but went on to reach new highs in the early 1990s. By third quarter 1991, News Corp.'s net profits had skyrocketed to A$107.5 million ($84.3 million). The 315 percent increase from the previous year may have salved the pain of Murdoch's divestment in the magazine industry.
Although News Corp.'s British and Australian tabloids continued to bring in steady profits, Murdoch turned his attention to movies and television in the early 1990s, having sold nearly all the company's American newspapers and magazines except TV Guide. During that time, News Corp.'s Fox network topped ratings charts with shows such as The Simpsons and Beverly Hills 90210, Twentieth Century Fox's Home Alone became one of the most popular movies in history, and even BSkyB began to show promise. By the end of 1992, BSkyB had subscriptions of 3.4 million households in Great Britain and Ireland, amounting to approximately 19 percent of the total population of the United Kingdom.
Although Murdoch was discouraged from going on another acquisitions spree, he did forge an alliance with French TV giant Canal Plus to develop pay television services throughout Europe. With only 6 percent of West European homes equipped with cable, the market for pay-TV was regarded as a largely untapped one and analysts predicted that the News Corp./Canal Plus deal would create a formidable opponent in the battle for subscribers.
News Corp.'s enormous commercial weight, coupled with its accompanying social influence, made both the group and Murdoch, its chief executive, long-time subjects of significant controversy. This is usually presented in personalized terms. For example, while there are several biographies of Murdoch himself available, there is no history of the group as such. This approach often distorted the allocation of responsibility for the activities of a group whose admirers regarded as a great achievement and its detractors as a dangerous concentration of power.
Emerging As a Powerhouse: Mid-to-Late 1990s
Conflict surrounding Murdoch continued into the mid-to-late 1990s, as the media mogul once again began rebuilding his empire--this time focusing on global dominance in the entertainment, television, satellite, and cable network industries. The financial problems of the late 1980s and early 1990s a thing of the past, Murdoch began a whirlwind of activity, first saving the New York Post from financial ruin, then purchasing a majority interest in Star TV, Hong Kong's satellite network. The broadcasting rights to the National Football League were also purchased.
In late 1996, News Corp. teamed up with Softbank Corp. to create Japan Sky Broadcasting Company Ltd. (JskyB), a digital satellite broadcasting services firm. The company also acquired the remaining shares of New World Broadcasting Group--Fox had originally acquired a 20 percent interest in New World in 1994. That year, News Corp.'s revenues increased by 10 percent over the previous year to $9.9 billion, but operating profits fell by 24 percent.
Murdoch continued making deals despite faltering profits. During 1997, News Corp. completed its purchase of Heritage Media Corp. It also acquired International Family Entertainment Inc. in a $1.9 billion deal. The firm continued to pay close attention to its Fox interest, launching both Fox Sport Americas in Latin America and the Fox News Channel. News Corp. also began satellite ventures in Mexico and Brazil.
Murdoch's feverish pace continued in the latter half of the 1990s. The professional baseball team, the Los Angeles Dodgers, was purchased for $300 million. In April of 1998, News Corp. also landed the rights to the new series of Star Wars films. Management hoped that the success of the series would keep pace with the highly successful and profit-boosting Titanic film. The company sold its TV Guide to Universal Video Satellite Group for $2 billion and sold 18.6 percent of the Fox Entertainment Group to the public. The IPO raised $2.7 billion. Not all of Murdoch's acquisition attempts were successful however. The media giant failed to successfully team up with EchoStar Communications Corp., a large concern in the satellite industry.
In 1999, News Corp. purchased Liberty Media Corporation's 50 percent interest in Fox/Liberty Networks. The firm also bought 224.8 million non-voting shares from MCI WorldCom, worth $1.4 billion. Net profit for the year however, fell by 35 percent over the previous year. Management cited investments in digital technology at BskyB as well as in various other satellite operations as culprits in the falling profits.
Alliances for the New Millennium
News Corp. entered the new millennium with continued focus on its entertainment, satellite, and cable operations. The original foundation of the firm, its newspaper segment, continued to prosper. During 2001, the company made several key moves to better position itself during an economic slowdown in the U.S. During the dot-com fallout of 2000 and 2001, News Corp. was forced to forego several Internet-related ventures. In fact, it ended its $1 billion partnership with WebMD Corp., an Internet-based healthcare services and information provider--WebMD shares had fallen from a high of $75 per share to just $5 per share.
The firm also sold its Fox Family Worldwide Inc. to Walt Disney Company for $5.3 billion in 2001. It also set plans in motion to merge its Italy-based Stream pay television operations with Vivendi Universal. Stream had been losing approximately $360 million per year. Murdoch's attempts to gain control of a major satellite concern were spoiled once again after negotiations with DirecTV Inc.--owned by General Motors Corp.--fell through.
News Corp. did score a coup however, when it completed the $4.4 billion purchase of Chris-Craft Industries Inc. The deal added 10 new U.S. television stations to the firm's arsenal. The acquisition, coupled with station trades with ClearChannel Communications Inc. and Viacom International Inc., gave News Corp. duopolies in seven markets including New York, Los Angeles, Dallas, Houston, Washington, Phoenix, and Minneapolis.
According to a December 2001 AsiaPulse News article, Murdoch addressed concerns related to the faltering American economy in a December staff email stating, "momentous events beginning on September 11--and economic conditions beginning long before that--have forced every News Corp. company to find ways to streamline its operations. I have very little doubt that next year will be another very difficult one--which should make us only more determined to succeed at every level." This determination and News Corp.'s history of success would no doubt leave it standing as a leading media conglomerate in the years to come.
Principal Subsidiaries: Fox Broadcasting Co. (United States); Fox Television Stations Inc. (United States); Fox Entertainment Group Inc. (United States; 85%); HarperCollins Publishers Inc. (United States).
Principal Operating Units: Filmed Entertainment; Television; Newspapers; Book Publishing; Magazines and Inserts; Cable Network Programming.
Principal Competitors: AOL Time Warner Inc.; Bertelsmann AG; Walt Disney Company.
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