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Fox & Friends, “You're Fired!” – A Theory On The Beginning Of Trump Media

|Includes: FOX, News Corporation (NWS)

Summary

Donald Trump's presidential bid may be a part of a plan to launch his own mass media outlet.

Recent polls and media coverage indicate that there is a need for a third party and political point of view.

Although Trump is attacking liberal media, there appears to be a rift forming between Donald Trump and Rupert Murdoch.

Donald Trump has been friends with Roger Ailes, Fox News CEO for 25 years. He and Murdoch disagree about Trump, making him a potential ally for Trumps potential media outlet.

Executive Summary

When I first heard Donald Trump's announcement, running for President of the United States of America (POTUS), I thought to myself, "We heard this before, in the 2012 race, and then he dropped out." He is just out for the free publicity, promoting his TV shows, books and other ventures. However, this time it is different. There seems to be a method to the madness. He has savaged his opposition's credibility and standing, undoing in just two weeks, millions of dollars in marketing and years of campaigning. The Republican Party (BATS:GOP) and Rupert Murdoch called for him to back down, mounting futile counter attacks. Many theories have arisen about Trump. Either he is serious, a Manchurian candidate or, what I think, setting up for his own media empire, backing his own third party.

Thesis

Donald Trump is using the White House bid to enable a new business, generating critical mass to launch a mass media outlet. There is an opportunity to fill the gap between Fox on the far right and CNN and MSNBC, left of the center. This media outlet would also enable a viable third party. He has both the content and the experience as a producer and personality, (WWE pro-wrestling, The Apprentice, Miss America, etc.). He can also advertise his resorts and development projects, not only in commercials but also as locations in reality TV shows or movies.

My Perspective

Born in 1970 as a second-generation American, raised in Chicago's affluent western suburbs, my parents, like many others, were pushing for academic achievement. The goal is gaining admission into a leading university, opening doors to a rewarding and lucrative career. Many of us, attending high school during the 1980s and college in 1990s, admired "The Donald", not only as a savvy businessman but also as an entertaining showman. The 1980s were also the Reagan years. He was overwhelmingly popular, instilling a strong sense of patriotism and belief in the American dream. Anything is possible with hard work.

Donald Trump personified these values even more, during my formative years. He set an example, we all admired, graduating Wharton, doing billion-dollar deals, coming back from near bankruptcy, richer than ever before. He extended his business from real estate to television, entertainment, golf and publishing. I mostly admire his straightforward approach, to the point, often lacking correctness but efficient, getting the job done. He was very public then and remains this way today. However, as we got older, he faded into the vast American background. His bold statements and antics became ineffectual since he did not really affect our busy lives. He is enigmatic part of my generation, buzzing in the backdrop ever since, strangely on Twitter.

Although I love my native homeland (America), I have always been very critical about the two-party system. This is my view. Large corporations, coercing mass media, dependent on ad-revenue, and candidates, requiring campaign contribution, enable unrelenting and manipulative advertising, targeting those too busy trying to survive, no time to interpret events for themselves, depending on media for factual information. Hence, the corporations and billionaires legally rig election! For example, during my time at Sears Holdings (2001-2003), a fellow employee pitched the company political action committee (NYSE:PAC), encouraging us to contribute, and promoting Sears's agenda.

When I heard Donald Trump's first presidential speech, I was shocked but not surprised, discounting this as a publicity stunt, gaining free advertising. We have seen this before, many times since the 1980s. However, the next speeches, sounding serious about following through (with the presidential campaign), tearing apart the other candidates and "making America great again," jolted me. Since July 18, I have felt this indescribable rush of adrenaline. Perhaps the energy, brutal honesty, combativeness and ferocity, affirming this, reawakened my inner patriot, suppressed by the Nordic Jenteløven. From my perspective, he was speaking from his heart, lacking correctness, speaking with conviction. What resonated with me was that he was going to use his own money for the campaign, pointing out that politicians put their donors ahead of America, and the intellectual laziness in the media, putting together sound bites instead of objectively reporting the facts.

Fox & Friends (Republicans)

It is my belief that Donald Trump is tiring of the Fox News tabloid approach, supporting disappointing candidates. Trump often rants about the money that he donated to losing candidates, making it clear that he likes to win. Perhaps he had enough, deciding to take matters into his own hands, running for president while voicing his frustration with the Republicans who have been struggling for years.

A rift is forming between Donald Trump and Rupert Murdoch, head of Newscorp, parent to Fox News. Roger Ailes, Fox News CEO, continues to support Trump against Murdoch's wishes, keeping their 25 year friendship intact. This started just after Ailes renewed his contract, continuing as their CEO, extending past the election to 2018. He earns around $10-$15M annually, much less, than Trump's reported $200-$320M annual income.

Cable's Demise and Social Media's Rise

Although Fox dominates cable ratings, the average Fox News viewer age is almost 69 years old. The overall cable viewership is declining.

Source: Pew Research Center & Social Times

Trump, an avid user of social media, and Ailes, must be discussing future trend during their lunch meetings. Apparently, Fox News commentators do not understand social media as a news source. Moreover, it appears that Fox's views do not register in the polls, losing elections and ground against the democrats. I can relate to the many patriotic, pro-gun, yet non-religious and un-hateful, anti-corporate bailouts, fiscally conservative Americans, who are indifferent to social issues, seeking the truth.

This disconnect between reality and what the conservative media thinks creates opportunity for a new type of media outlet, combining traditional TV with social media, catering to the views of pragmatic conservatives. Perhaps Ailes is an aspiring billionaire. This is his chance, helping Trump towards start his own media outlet, taking an ownership stake in exchange for his expertise, realizing this possible aspiration.

Trump Media

Trump does not have to win the election, only the Republican nomination or derail them as an independent, to realize a media empire. The notoriety from this move will forever disrupt the conservatives, causing them to look for new direction. If he does win, Trump Media becomes even more possible after he leaves the White House, giving his kids something to do, taking the family business to the next level.

Trump with a $10 billion net worth could launch a media outlet, competing with Murdoch's News Corporation (NASDAQ:NWS), valued around $8.4 billion and taking on 21st Century Fox (NASDAQ:FOX) valued at $68B, with financing, alliances, captive audience and good content. We are already witnessing that TV networks are forced to cover him. His own media network, after this presidential bid, is assured viewership. Trump Media can provide the following content:

  • News & Commentary - He is a natural at stirring up debate and controversy. A news network with commentators going where no one else will go, ripping politicians apart, speaking their minds, regardless of political party.
  • Financial News - There are many great blogs, like Seeking Alpha, that could be broadcasted as TV shows. We mostly hear about mainstream stocks, but very little about hidden gems.
  • Fashion & Style - The Ms. Universe and Ms. USA organizations, owned by Trump, will legitimize any broadcasts or editorials in this realm. He is also in model management business. He could compete head on or add Fashion TV to this media portfolio.
  • Reality TV - He already mastered this realm with The Apprentice, running for 14 seasons. However, there is perhaps many other opportunities which he could capitalize on. There are many You-Tube celebrities, getting incredibility high viewership, which he could cooperate with.
  • Sports - Trump already has a golf empire, which he could broadcast professional and amateur events. His golf courses have luxurious venues, which could also serve as the backdrop for movies and TV shows. He was also involved in WWE professional wrestling and therefore experienced in sports productions.
  • Real Estate - Property and home improvement shows are still popular. The network could do TV shows about renovations, purchasing properties while advertising their own projects or on the behalf of their customers.

Integrating social media and technology with traditional broadcasting, Trump Media could be a formidable global player, actively getting feedback from its viewers, staying honest, and perhaps "firing" Fox News. If Donald Trump poaches key people from other networks while working with his three older kids, Ivanka, Donald Jr. and Eric, connecting him to the younger generation, they could easily expand their family empire into our living rooms and onto our smart-phones.

Conclusion

Although I find Trump a fascinating choice for President, I do not believe this is his goal. He would have to let go of his current empire and deal with ineffectual politicians. Whether or not he wins, it is only a matter of time before he takes his real estate and entertainment empire to the next level: a media empire. Rand Paul stated that since his announcement, he has received over $1 billion in free TV coverage, further boosting his name recognition. Trump although sounding shocking and even mean-spirited makes some valid points:

  • Why was it ok to criticize John Kerry for his service but not John McCain's? As a former US Naval Officer, I wonder what was a person, ranked towards the bottom of his Naval Academy class, doing in a fighter jet. This is a position reserved for only the top graduates. Perhaps, his father or grandfather, admirals in the Navy, may have influenced his appointment to a position that he was not qualified for, leading to the chain of events that led to his capture. "Songbird" McCain like John Kerry has his own detractors.
  • He will be using his own money to run and therefore not influenced by corporations or special interests. Much of the public feels that politicians have been ineffective because they lack conviction, pandering to their supporters. Perhaps, through a media network, he can clearly show whom our politicians are really working for.
  • He vows, if elected, to stop the $2.5 billion Ford Mexican ford plant, otherwise taxing 35% the vehicles and parts, exported back to the US. He further states that lobbyists will not buy him. This reflects a strong departure from conservative and Republican ideology, winning working class voters.
  • Trump is for universal health care (10:33), another departure from the Republicans.

The polls, reflecting his popularity, indicate that Americans are tired of the current system. Therefore, there is demand and a strong need for a third political venue, not liberal, not conservative, but pragmatic. Trump is a New Yorker, all the way through, bold and direct, results oriented, impartial, seeking victory. If he decides to start a media network, he must ensure that these values come through, giving us a true third choice. This media venue can give rise to a credible third party, giving Americans a true choice.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: This article is purely speculative, based on events in the media.