Behind Murdoch's move into television
Boston — For Rupert Murdoch, adding six American television stations to his media empire is a shrewd, albeit expensive, business move. Because he is motivated more by profits, power, and prestige than by ideology, analysts say, his impact on the three national networks he will be competing with will be limited.
At first glance, this has the look of a pincer movement against the networks by conservatives, with cable television's Ted Turner making a hostile takeover attempt for CBS on one flank and Rupert Murdoch setting up a ``fourth network'' on the other.
But if Mr. Murdoch is trying to create a fourth network -- widely considered implausible, at least in the short run -- he would not risk profits for ideology, news media analysts say. ``An owner of a $2 billion broadcasting group is going to play it down the middle'' in his news policy, says Donald West, managing editor of Broadcasting magazine.
Assuming he can overcome some legal hurdles, the Australian newspaper magnate and his partner, oilman Marvin Davis, are buying seven stations from Metromedia Inc. through their company, Twentieth Century-Fox Film Corporation. Fox, which is paying $650 million in cash and absorbing about $1.34 billion in debt, will immediately sell one station, Boston's ABC affiliate WCVB, to the Hearst Corporation for $450 million.
Before the deal goes through, Murdoch must become an US citizen, which he says he will do. Under Federal Communications Commission (FCC) rules, a foreigner cannot own more than 20 percent of a broadcast station and 25 percent of a company that owns a broadcast station. His 50 percent stake in Fox puts him over.
Second, the FCC bars a newspaper publisher from owning more than 5 percent of a broadcast station in the same city. Unless he gets a waiver -- and no one ever has, the FCC says -- Murdoch would have to decide between the New York Post and WNEW-TV. The Tribune Company, which has seen the Post cut into the circulation of its New York Daily News, is said to be a potential buyer.
Murdoch faces a similar dilemma in Chicago, where he would own both the Sun-Times and WFLD-TV. But given the increasing number of hours Americans spend in front of the television set, and the leveling of newspaper circulation, it may not be a hard call.
It should be between six months and a year before all the wrinkles are worked out, says one merger specialist at Oppenheimer & Co., an investment banking firm.
Through the six stations, Murdoch and Davis will be able to reach 18.1 percent of the homes in the United States. But analysts doubt Murdoch will use the stations as a voice box for conservative politics. And while he is thought to be closer to the right than the left, the link with conservative groups is tenuous at best.
``Murdoch is not a Ted Turner. Murdoch is a businessman, not a crusader for ideas,'' says Benjamin Compaine, author of ``Who Owns the Media?'' and executive director for Harvard's Program on Information Resources Policy. Mr. Turner, who owns Cable News Network, has criticized the networks for ``sleazy programs.'' Conservatives have hailed his bid for CBS.
``I see very little ideology except to make a buck,'' says Kenneth Harwood, a professor of communications at the University of Houston. ``I don't expect Mr. Murdoch to monkey around with [the stations] ideologically because he wants to retain their profitability.''
The evidence on Murdoch's editorial restraint cuts both ways. The Village Voice, a liberal New York weekly up for sale for $55 million, and the Chicago Sun-Times have been left pretty much alone. The New York Post and the Boston Herald, on the other hand, are considered fairly sensational.
Even if conservatives are not rallying around Murdoch the way they have Turner, they are pleased by Murdoch's entry into the fray. ``You're witnessing a realization by the public and by those who can afford to act that the liberal media are not off limits in the struggle for control,'' says James Cain, cofounder of Fairness in Media, a conservative group that has voiced support for Turner in his bid for CBS. ``When [the networks] begin to feel their own pocketbooks and jobs threatened, then they have to take a hard look at themselves.''
Even before the moves by Turner and Murdoch, the recent libel suits by retired US Gen. William Westmoreland against CBS and former Israeli Defense Minister Ariel Sharon against Time magazine forced the media into a good deal of soul-searching. In the last few months, the reporting and editing processes have been put under the microscope for the public to see.
But because of the rising clamor against the media, the networks have built up a great defensive mechanism over the years, says Mr. West. They are secure and will remain insulated from pressure from conservatives.
Whatever its editorial stance, the new Fox broadcast group has little chance of becoming a fourth network.
Most analysts say that if anyone can form a rival network, Fox can. Fox has a library of movies and a successful track record in TV programming, having produced shows like ``Trapper John, M.D.,'' ``The Fall Guy,'' and ``The Paper Chase'' for the networks. Now Fox has the station outlets for the programs.
Also working in Fox's favor is the growing appetite for first-run syndication -- programming sold directly to independent and affiliate stations, not distributed by the networks. The number of independent stations -- which, unlike network affiliates, do not get their programming from networks -- has tripled to 214 since 1972.
To fill those hours, they need syndicated programs and movies -- which Fox can supply. The number of hours of syndicated programming that independents and affiliates needed has increased 22 percent since 1980, says the Association of Independent Television Stations. In that time, the amount independents and affiliates have spent on syndicated programs has jumped 89 percent.
To compete with the networks, Fox would have to supply 15 hours a day of programming, and it would take ``many, many years'' to develop that capability, one analyst says. Also, each network has about 200 affiliates, which together reach 99 percent of US households. Even if Fox acquired another six stations and boosted its reach to 25 percent -- the maximum allowed by the FCC -- it would have a long way to go to rival the networks.
The way to do it would be to woo away affiliates, which have contracts with and traditional loyalties to the network. ``You bring an affiliate away when you have higher ratings,'' West says. ``But that takes a long time to happen.'' A more likely scenario is to attract independents -- but that, too, takes time.