Can Rupert Murdoch Have It All?

By Simon, Samuel A.; Wagenhauser, David | The Nation, February 13, 1988 | Go to article overview

Can Rupert Murdoch Have It All?


Simon, Samuel A., Wagenhauser, David, The Nation


CAN RUPERT MURDOCH HAVE IT ALL?

G'day, mate. Well, perhaps not for Rupert Murdoch, the politically conservative multibillion-dollar media magnate who may soon find himself in a very unfamiliar position--a losing one.

The Australian-born Murdoch (who became an American citizen for business purposes) has suddenly found that his stories of two-headed monsters and pictures of decapitated women have taken a back page to his own front-page caricature. Ironically, the newspapers, columnists, Senators and liberals suddenly have come not to bury Caesar but to martyr him.

Murdoch's woes stem from his 1986 purchase of WNYW-TV in New York City, now the flagship of his Fox Broadcasting Company network, and WFXT-TV in Boston. A thirteen-year-old Federal Communications Commission rule prohibits media cross-ownership (holding a daily newspaper and a radio or television station in the same community, unless they were bought prior to the rule's adoption), and Murdoch owned the New York Post and the Boston Herald at the time he contracted to purchase the television stations. In order to get F.C.C. approval of his television station acquisitions he had to promise to sell the two newspapers.

In 1985, when Murdoch first proposed to acquire the two television properties, he was challenged by public interest groups, in part out of fear that he would figure out a way to retain ownership of both the newspaper and television properties. Murdoch, in fact, had a reputation overseas of working to change government regulations that impeded his business ventures-- after all, in order to win the game, you sometimes have to change the rules. The real question was whether the United States would be another notch on Rupert Murdoch's belt of flimflams. Thus, it was only after significant public interest and Congressional scrutiny, and repeated assurances by Murdoch that he would not seek a permanent change or waiver of the cross-ownership rule, that the F.C.C. approved the transfer of the stations. It conditioned its approval, however, on transition periods, during which he would sell the Post (two years) and the Herald (eighteen months).

Yet, true to Murdoch's style, almost immediately after his purchases, rumors began circulating in many newspapers that Murdoch would find some way around the cross-ownership rule. The Wall Street Journal reported in January 1986 that published remarks by Murdoch and interviews with knowledgeable sources indicated that he would use the waiver time to remove the legal impediment of the cross-ownership rule. The F.C.C. chair at that time-- the Duke of Deregulation, Mark Fowler--expressed nothing short of an extremely open mind to this suggestion. There was also talk that the commission would grant a heretofore unprecedented permanent waiver of the rules.

Throughout 1986 and 1987, Murdoch denied he would seek an extension of his waivers or ask for permanent ones. Far into the waiver periods, however, inquiring businessmen were having trouble getting evidence of much interest from Murdoch in selling the two papers. Obviously, the closer it got to the end of his waiver period, the more pressure would be put on the F.C.C. to reconsider his plight.

Murdoch's chances of escaping the cross-ownership rule turned rosy in November of 1987. The so-called Freedom of Expression Foundation, a Washington-based front for the broadcasting and publishing industry (membership and funding are substantially derived from broadcasters and newspaper owners) petitioned the F.C.C. to eliminate or modify the rule. Interestingly, Murdoch's Fox Broadcasting Company is a member of the group and helps finance its $300,000 annual budget. (The organization denied that it undertook the action in the interest of Murdoch or at his request.) Immediately thereafter, the commission asked for comments on the group's petition.

It appeared likely the F.C.C. would launch a full-blown inquiry. …

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