Tuesday, May 5, 2009

Rupert Murdoch

Today, Rupert Murdoch is best known as the media mogul who owns and runs the Fox Network. This empire reaches well beyond Fox however, and in total it has made Murdoch one of the richest men in the world with a net worth of an estimated $4 billion.

Murdoch’s empire rose not from a long-held family fortune, but instead from ownership of a single newspaper in his native Australia. Murdoch converted Perth’s Sunday Times into a tabloid and in doing so, found a successful formula that he repeated throughout Australia before moving into international markets. But Murdoch is not just a one-trick pony. He found a great deal of success in generating tabloid headlines for his papers, but as his holdings expanded, he also found value in innovation within the newspaper industry. Murdoch’s pioneered electronic production processes in the newspaper industry in Australia, England and the U.S. and achieved significant savings through this innovation. As with many innovations, this automation reduced the need for labor, and Murdoch was an unpopular figure with labor organizations as a result. He weathered the storm however, and his production techniques are copied through the newspaper industry today. Given the dire financial straits of many of these papers in today’s electronic media age, there is no question that this innovation has been critical in the survival of many of these papers thus far.

Also in the 1980’s, Murdoch began to expand his reach into the television market. His initial efforts with a British satellite TV company led Murdoch into enough debt that he had to sell off many of his Australian magazine holdings, but as a good businessman, Murdoch recognized that there was money to be made in television and continued to work to perfect his efforts in this medium. With his Fox Network, Murdoch found a winner. With a national network in the U.S., a 24-hour news network and a rapidly expanding regional sports network, Fox has become a major player in multiple media channels and has become a legitimate 4th network in a market that had been long controlled by just the big 3 (ABC, CBS and NBC).

Murdoch has not always been a popular figure. Some contend that his relationships with British Prime Ministers Margaret Thatcher and Tony Blair afforded his preferential treatment from that government. Others have claimed conflicts of interest between him various news holdings, and as many sports fans remember, his brief ownership of the Los Angeles Dodgers was not about building a winning baseball teams as much as it was about building a regional sports network to rival ESPN. Regardless of your opinion about his tactics, it is clear that Rupert Murdoch has built a tremendous amount of wealth for himself and for the tens of thousands of employees he has working for him worldwide. And this makes him a Hero of Capitalism.

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