The Australian Financial Review



The Australian Financial Review

PUBLISHED: 05 Nov 2010 12:09:00 PRINT EDITION: 5 Nov 2010

Uncut: the thoughts of Chairman Murdoch

"I'm starting a paper in six weeks. A brand new paper. It will be a bit like the New York Post. But it will be national. It will only be seen on tablets. It will only employ journalists - and maybe eight to 10 technicians." - News Corporation chairman Rupert Murdoch.

Max Suich

The average grey-bald grandfather in his 70s tends to play with his grandchildren. Italian Prime Minister Silvio Berlusconi, 72, it now seems indisputable, likes to play with teenage girls. Rupert Murdoch, 79, likes to play with newspapers . . . still.

In a laid-back, casual conversation in Sydney last week, the chairman of the global media giant News Corporation talked with the greatest enthusiasm about his plans for a new newspaper - indeed a new kind of newspaper - and his plans for his other papers.

Murdoch, dressed in matching blue everything - suit, shirt and tie - slightly stooped and listing a little to one side when he walks, looks his age and appears, these days, to be comfortable with that.

It was a conversation originally arranged to discuss a crisis in Australia- American relations of 49 years ago, which had Murdoch at the centre of it . . . a crisis provoked when he filed a report of a remarkable interview with president John F. Kennedy in December 1961 but which he killed under pressure from the American and Australian governments. ( See Review .)

Some casual questions about what he now had front of mind provoked some candid insights.

Just days before the US midterm elections, Murdoch disclosed his deep pessimism about the prospects for the American economy and US politics.

He didn't hide his antipathy to US President Barack Obama nor his pleasure at the controversy surrounding his Fox News cable outlet in the US, which has been a powerful force in encouraging the growth of the Tea Party.

He took great pride in a group of "brilliant" younger newspapermen rising inside the company and his enormous interest in the way they were developing the "old technology" of newspapers.

He made it abundantly clear that, as ever, when Murdoch cares strongly about an issue, his huge media empire jumps - and the issue he cares about most now is the reform of the US education system.

And it was impossible to miss the underlying theme in his musings: how much Murdoch enjoys conflict and competition for its own sake, and the consequent fun of deploying his power and influence to make mischief for competitors and enemies.

Max Suich: President Obama?

Rupert Murdoch: Obama's trouble is he thinks he can make a great speech - he's a great speaker - and it will be done. But nothing gets done. He doesn't listen to anybody. The other day he invited mayor Bloomberg [of New York] to a day of golf at Martha's Vineyard. Bloomberg said it was a pleasant day. In conversation he put a few ideas . . . He said it was like verbal ping pong. He came back and said 'I never met in my life such an arrogant man'.

For two years, Larry Summers [recently resigned as one of Obama's senior economic advisers] has been going around dinner parties in Washington saying that he had no influence in the White House. Rahm Emanuel [recently resigned chief of staff to Obama] said to me 'he [Obama] is a bit like [former president Ronald] Reagan . . . he concentrates on three to four things at once and nothing else for weeks . . . the rest gets delegated, sometimes with disastrous results. They are not delegated to my staff but delegated to Congress or wherever'.

Obama is going to lose the House [of Representatives election this week -he did].

Then what's he do?

[President Bill] Clinton turned 180 degrees. Big government was over forever. Everyone thinks this man will turn left, not right-he's more of an ideologue. And that will mean one term.

The economy?

There's humongous unemployment. At least 30 million are either looking, given up looking, or have half the job they had before. And that will get worse. With any kind of a Republican candidate - a decent Republican governor, say - Obama will find it is impossible to win. At least that's today. Maybe there will be a huge international crisis, something may change the situation.

America never gets a recovery without small business starting up in a big way. They are the ones who employ people. Big corporations, they just cut or buy out the competitor and cut. People who take a mortgage on their house to start a business, maybe employ 40 people . . . now they think let's wait and see.

There's an investment strike . . . a consumers' strike. People are terrified they will be the next to be unemployed. After the elections there will be total gridlock.

Are you worried by the attacks on Fox News for bias and its support of the Tea Party and the Republicans?

NOooo . . . people love Fox News.

Some people don't.

Well half hate it, half love it. We said to the cable operators when we put the price up, we said do you want a monument to yourself . . . cancel us, you might get your house burnt down. (Both laugh.)

There's a lot of Democrats on Fox News, not just Republicans. Everyone is invited on. Bill O'Reilly [an anchor on Fox News] gets Hillary Clinton on. He's disgraceful the way he gives her such an easy ride. We're beating the shit out of CNN. There's a guy on Fox who started on CNN called Glenn Beck. [Beck attracted tens of thousands of Tea Party supporters to a huge rally in Washington in August and is one of the most significant supporters of the Tea Party in the US media.] He is a little bit of an actor, he looks in the camera all the time. He's very genuine, extremely well-read libertarian, doesn't make any secret of it. He says don't trust the government, don't trust me, just trust yourselves.

He's hit a nerve. Millions - millions - watch him at five in the afternoon!

Is this healthy politics, such a huge growth in American populism?

The Tea Party will stiffen the back of the Republican Party.

This is an upswell. They [the Tea Party] have no leadership; that's why they get a few crackpots in it.

People just very deeply feel there's too much government. Under Obama it has accelerated.

The states are broke, taxes are going up. Land and school taxes all going through the roof in Nassau County, in Westchester [an affluent suburb in New York].

America is economically unstable and politically unpredictable, and China's power is growing. How does Australia adjust?

I think America will be at a standstill for almost a decade. If you get another administration it just doesn't turn this around overnight.

China and India and Brazil meanwhile are just booming ahead. China is buying up and developing half of Africa.

On balance, don't you think the deal by Singapore to buy the ASX should go through?

It's the cleanest government in Asia. We are part of Asia.

What is the biggest thing on your mind now?

The biggest thing on my mind is how can we [News] develop in America. There are so many disruptive technologies coming all the time! [This in almost a whoop of excitement.] Pretty. Damn. Interesting! Just trying to stay ahead of the technology. I'm starting a paper in six weeks. A brand new paper. It will be a bit like the New York Post . But it will be national. Have that sort of humour and attitude like the Post . It will only be seen on tablets. It will only employ journalists - and maybe eight to 10 technicians.

The editor? Col Allan? [Australian editor of the New York Post ]

The editor will be Jesse Angelo, deputy editor of the Post . He's brilliant. His father is one of the biggest capitalists on Wall Street. He doesn't want to join his father, wants to be an editor.

What sort of circulation will you need?

At the price we are talking about, that's $1 a week - not a day, a week - we need 800,000. By the end of next year there will be 30 to 40 million iPads. I believe every single person will eventually have one, even children.

The name?

The Daily . We wanted to call it the Daily Planet but DC comics (owners of the Superman copyright) were not amused.

A tabloid for tablets?

It will be campaigning on very serious subjects too. We will be having a huge campaign in all our papers. American education is the biggest scandal possible. Obama makes a speech but does nothing. The teachers' union has so much money. Thirty per cent of high school students drop out 2-3 years early . . . they cannot read or write, let alone do maths. They are committed to the underclass or the criminal class forever. Because the teachers' union - any negotiation with them [about teaching quality] has to be about the pension plan. Recruit good teachers and they are the first to be fired. Last on first off. All our papers are going to be talking and campaigning about this issue.

In England, Fleet Street has ganged up on you? [The BBC and major British newspapers have asked the Cameron coalition government to block News Corporation's move to take over the remainder of BSkyB it does not already own].

They have kind of backed off. I saw the [ Daily ] Mail and the Telegraph the other week, The Financial Times . . . they don't like the rise of the Wall Street Journal . They think we will suddenly get the cash flows that are going to come out of Sky. I said to the Mail : You are frightened I will have enough money then - $300-$400 million - to destroy you. I said I have got that now! It wouldn't work. People like the Daily Mail . They like The Guardian . They have an audience. I can't destroy them. The law is on our side. [The takeover] has got to go through Europe. That's more dangerous. The Europeans like to interfere with everything. Then it goes to the British minister who decides whether to wave it through or send it to Ofcom [the independent regulator and competition authority for the UK communications industries]. Ofcom doesn't like us. Last year they ruled that we controlled Sky and made us sell our ITV holding which cost us £1 billion. It will be hard for them to say we don't control it now. It would not be the end of the world but it would be nice to have.

Then there's your fight in Italy?

There's a new scandal with Berlusconi. A 17-year-old girl arrested, she was in jail. Berlusconi sent someone to spring her. She's come out and started talking. That's a good scandal.

Will we see it on Sky Italia tonight?

Oh yes! Oh! No question. No doubt about that.

How do you score that match in Italy?

We are coming through - put on 200,000 more subscribers in the past six months. We will have 5 million subscribers in March. We will make a few hundred million. They [the Italian government] slammed 20 per cent VAT [value added sales tax] on us. That slowed us down. Suddenly out of the blue VAT went to 20 per cent That did stop us in our tracks for about a year.

How is the experiment in New York going with the Wall Street Journal? [The Journal has added a New York section to attract New York Times advertisers and subscribers.]

The Journal is going beautifully . . . Robert Thomson [the Australian editor] is brilliant. The Journal is the only paper to go up in sales - not a lot, just 2 per cent - but the average of the top 25 papers in the US went down 5 per cent. The New York section is going well. It pays for itself and it is sticking it to the The New York Times . We sell about 260,000 in the greater New York area and the Times is down to about 460,000. It's enough to worry them.

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Max Suich was chief editorial executive of John Fairfax 1980-87 and the founding publisher and editor of The Independent Monthly.



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