Publisher Murdoch's U.S. Track Record

by Dante Chinni, with assistance from Jessica Goldings
July 30, 2007

As the world ponders the implications of Rupert Murdoch's $5 billion bid to buy Dow Jones, there's been broad speculation about how he might operate the company's flagship Wall Street Journal. Those scrutinizing Murdoch's U.S. newspaper holdings for clues to his stewardship of the Journal have frequently cited his in-your-face conservative New York Post tabloid as Exhibit A, and his ownership of papers in Europe as Exhibit B, from the Times of London to the tabloid Sun, complete with topless Page 3 girls.

But what is Murdoch's record in the American newspaper business?

American newspapering is far different than in Europe. In England, the bulk of a newspaper's revenues come from circulation, and a tabloid strategy can be highly profitable. American newspapers, in contrast, generate roughly 80% of their revenue from advertising. Circulation, if its not attractive to advertisers, can prove frankly counterproductive. Some American newspapers have even scaled back on "unprofitable" circulation to save money.

Although Murdoch's American newspaper holdings now include only the Post and community papers in Brooklyn and Queens, he once published dailies in San Antonio, Chicago, and Boston as well a supermarket tab and a liberal alternative weekly. In the 1980s, he appeared to be pursuing a strategy of buying tabloids in several major American markets, a venture abandoned eventually in favor of his vision to build a fourth TV network.

Murdoch's history with U.S. newspapers would not, on its face, seem to indicate a single clear corporate strategy. In several instances, he bought papers at the last minute before extinction at remainder prices. In the end, Murdoch has not stuck with any American newspaper other than the New York Post, which he still operates at a substantial loss. He did, in some cases, reap sales profits that were plowed into other sectors of his media empire. A number of his papers were sold after he ran afoul of the FCC's ban on cross-ownership that prevents one company from owning a TV station and newspaper in the same market, a sign that when pushed, Murdoch has put more of his passion into American television than American print.

Here's a snapshot of some of Murdoch's current and former U.S. print holdings. For a complete chronology, read the full report at journalism.org.

New York Post

Purchased: In 1976 for $30 million
Sold: In 1988 for $37.6 million
Re-purchased: In 1993 for $25 million
Bottom line: Circulation has grown, but the paper, often described as a guilty second read for upscale Manhattanites, is a perennial money loser.

Murdoch originally bought this New York tabloid in 1976 from long-time owner Dorothy Schiff, who had made it arguably the most liberal newspaper in the country. The editorial slant shifted under Murdoch, but ultimately his TV interests conflicted with the Post's ownership. FCC rules barred one company from owning a TV station and newspaper in the same city and Murdoch had purchased local TV station WNYW. So he sold the paper.

In 1993, with the Post apparently on the brink of shutting down, Murdoch offered to buy it back if the FCC granted him a waiver. Several New York politicians fought for Murdoch, including then Governor Mario Cuomo who was often skewered on its editorial pages. A frothy mix of gossip, grit, and conservative ideology, the paper, with a current circulation of about 690,000 is estimated to lose millions each year, so many that it seems unlikely most publicly traded corporations would justify sustaining it. (A 2005 Business Week story put that number between $15 and $30 million a year.) It is the one U.S. daily Murdoch currently owns.

Village Voice

Purchased: In 1977, along with New York magazine and New West magazine for $7.6 million
Sold: In 1985 for $55 million
Bottom line: The paper enjoyed an increase in advertising and profitability under Murdoch, according to a New York Times story at the time of the sale.

While the Post might have tilted rightward with Murdoch, The Voice--the Manhattan weekly that was the granddaddy of the nation's liberal alternative press--remained relatively free of editorial interference from it new owner. According to the Voice's own account, Murdoch reportedly once wanted a reporter fired, but backed off when the editor refused. The sale of the paper helped free up cash that bankrolled Murdoch's launch of the Fox broadcast network in 1986.

TimesLedger and Courier-Life Group Newspapers

Purchased: In 2006 for $16 million
Bottom Line: It's too early to judge.

It may not have attracted much fanfare, but Murdoch recently bought these chains, a total of 28 community papers in Brooklyn and Queens. They may not be the Village Voice or the Post, but the papers have more than 100,000 combined readers in those boroughs. A Dow Jones purchase by Murdoch would add more weekly papers to his stable since the company's Ottaway subsidiary publishes more than a dozen weeklies. In general, smaller local papers have been less susceptible to some of the newspapers industry's recent circulation and revenue ills than larger metro dailies. Footnote: The timeline dates and figures included in this summary were gathered from a variety of sources including newspaper articles, corporate statements and company histories.

Click here to read the full report, including a complete chronology of Murdoch's U.S. print holdings.