Thursday, 17 March 2011

Hollywood Babble On & On #695: Maybe It's The Murdochs?

Welcome to the show folks...

Some shareholders have filed suit against Rupert Murdoch, claiming that News Corporation's purchase of Shine Group is tantamount to "paying for nepotism" because Shine is run by Rupert's daughter Elisabeth Murdoch.

Now you have to wonder why are they going after old Rupert Murdoch for this. Other media moguls run their companies like personal fiefdoms, often engaging in nepotism and familial infighting that make the Medicis and the Julio-Claudians look like the Osmonds. For the most part the Murdoch/News Corp. operation seems to run smoothly in comparison to the these other companies. Now this could be simply because of the powerful and dominant personality of Rupert Murdoch, but we'll have to wait until after he's gone to prove that theory.

Yet these other companies are rarely, if ever, involved in any sort of shareholder rebellion or litigation like this because of allegations of nepotism. It's not like News Corp's takeover of Shine is exactly a far-fetched idea, or some elaborate accounting scheme. It's a TV production company with a pretty solid valuation, a network of experienced and successful media content creators, and a record of steady growth. News Corp also got a price at the low end of the company's valuation at the time the deal was struck.

This should all be good news for a media conglomerate with more content outlets than content generators. So why are these shareholders freaking out?

Because it's Rupert Murdoch.

You see when the rich and powerful in the media go one way, Rupert goes the opposite way. This extends beyond business, and into politics, which has made Rupert Murdoch a convenient bogeyman for the role of "mad corporate robber baron run amok." It doesn't matter if he's no better or no worse than the others, he doesn't hate the same people that they hate, and they hate him for it.

Does that make any sense?

Let's remember that back when Rupert Murdoch was a fledgling newspaper baron in Australia, most of the country's media was politically conservative in the old puffy Tory mode. He took his papers to the left politically because there was an unexploited audience for that sort of reportage. When he expanded into England, the rest of the media was lurching to the left, so he swung to the right.

That sort of thing is just not done in polite circles. Everyone at the top of the media food chain are supposed to vote the same way, donate the same way, and make doubly sure not to rock the boat for the others by openly criticizing them or their media outlets.

Rupert Murdoch saw this clubhouse attitude and saw an opportunity. He'd stir the shit with a canoe paddle, not only offering differing views via his newspapers and networks, but actively criticizing his rivals for their views.

How does this make him money?

Well, his rivals promptly had a royal freak out over being openly criticized, and they went after Murdoch and his outlets with all guns blazing. This made his brands stand out with audiences, compel them the check them out, and the majority of said audiences either wonder what the big deal was, or they agree with what the outlet said. Either way, most of them keep watching/reading that outlet, allowing Murdoch to thrive in markets where his rivals are suffering.

This isn't exactly cricket to those rivals, and that feeling spreads throughout the moneyed community. In situations where other moguls get a pass, you're permitted to go after Murdoch & Co. hammer and tongs. This is because the others play by the rules established by their peers, and don't act like Murdoch who is playing a different game. One where money, not social standing, matters, and he keeps flipping them the finger every time he scores a goal.

I suspect this lawsuit will get tossed, the deal will go through, and Murdoch will go on to annoy them another day.

The more I learn about big business, the more I realize that it is run way too much like high school.

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