Will Anyone Try To Curb Rupert Murdoch?

An ordinary person, approaching a red light at an intersection, stops, or at least slows down enough to make sure there are no cops around. Something tells me that Rupert Murdoch just steps on the accelerator and cackles.

Twice this week, Murdoch has done something that, on the face of it, he wasn't allowed to do. First, he ousted The Wall Street Journal's managing editor, Marcus Brauchli, or, more precisely, took steps that seemed designed to force his resignation. Then he made a (not-quite-final) deal to buy Newsday for $580 million.

In the former instance, the special committee created to oversee the editorial independence agreement between Dow Jones and News Corp. had grounds to intervene, since Brauchli's treatment looks to be an instance of "constructive dismissal." (I pointed this out yesterday, and Columbia Journalism Review's Dean Starkman agrees with my analysis.)

Of course, as a commenter notes, it's hard to imagine the committee reinstating Brauchli, and there's no reason to think Brauchli desires that. But will they at least exercise their contractual right to take Murdoch to task on the Journal's op-ed page? I contacted all five committee members yesterday; none has commented.

With Newsday, Murdoch's prospective deal bumps up against a couple of different regulatory limits -- as the Journal notes in a story today. Most obviously, it would make a mockery of the F.C.C. rule prohibiting cross-ownership of a TV station and a newspaper in the same market. Murdoch already had two stations in New York, which he's allowed to keep, provisionally, on the grounds that his New York Post loses so much money, it would go out of business if anyone else owned it. (The Journal counts as a national paper, not a local one.)

But Newsday is profitable, and throwing it into a joint venture with the Post would reportedly wipe out that paper's red ink as well -- thereby eliminating the rationale for letting Murdoch flout the rules. If anything, a Newsday-Post joint venture could decrease media diversity in New York by driving the Daily News out of business.

There's no telling how the F.C.C. will handle this, but the Senate sent a strong signal yesterday that it won't allow unbridled media roll-ups of the sort Murdoch likes to engineer: the Commerce Committee voted yesterday to overturn the new ownership rules adopted in December.

Murdoch is often hailed as a genius, and maybe rightly so. But a not insubstantial part of his genius lies in merely in knowing when to call a bluff. Although his lieutenants practice what has been dubbed anticipatory compliance, Murdoch doesn't bother with the stuff himself. He just keeps doing what he wants until someone forces him to stop, secure in he knowledge that a red light is simply a sign -- meaningless unless someone actually bothers to enforce the rule it represents.

Comments

[Trader T]

What the heck is this article doing posted at SA? The author doesn't discuss market ior business issues - just has a problem with Murdoch growing his business. Jeff, do you feel the same about Bill Gates or Warren Buffett?

[jeff a]

"do you feel the same about Bill Gates or Warren Buffett? " Bill Gates yes, Warren Buffet no. For all practical purposes, Microsoft has a monopoly but the public tacitly approved of it. Murdoch is a different animal.

[Yrallih]

I suspect Jeff is a "Progressive"... (liberal) and Murdock's Fox politics have gotten under his skin.

[Yrallih]

Jeff is a disgruntled Liberal, obviously!

[iranewlander]

What Rupert needs to do is identify a consolidating banner under which he can consolidate all his brands, perhaps a suitable website, say.
Suggestions?