WHERE RUPERT'S SUN NEVER SETS
The Press: Paul Johnson
wonders if Murdoch's empire is becoming too big
WALKING down Whitefriars Lane off Fleet Street the other day, I witnessed a little scene heavy with symbolism. They had opened a hole in the back of the old Sun-News of the World building and a crane was lifting out an immense, time- blackened piece of cast-iron. It was a chunk of the traditional hot-metal era, heading for the scrap-yard. The sight brought home the physical reality of the change wrought in British newspaper pub- lishing during the last 18 months. Soon the building itself will be transformed, for planning permission has been given for a £120 million development on the site. This, plus similar use of the Times-Sunday Times buildings in the Gray's Inn Road should plonk another £60 million on the right side of News International's ledgers. While Eddie Shah rightly gets the historical credit for detonating Britain's print revolution, there is no doubt that Rupert Murdoch has made the financial killing.
Indeed, the triumphant end of the Wap- ping dispute marks the apotheosis of Mur- doch as one of the most successful tycoons of the century. Where will he go next? There were rumours in the City last week that he is to bid for the Springer empire in Germany. In November last he acquired control of Hong Kong's leading English daily, the South China Morning Post, which many consider the best newspaper in Asia; it will make an excellent flagship for a West Pacific fleet. By the middle of last month he had paid 1.5 billion in Australian dollar values for 66 per cent of the shares of the Herald & Weekly Times Limited, with 142 newspapers of a total circulation of 23 million a week. This, with his existing titles, should give him a dominant position in Australian newspaper publishing, though the Fairfax and Holmes a Court groups are also very big.
News Corporation, Murdoch's umbrella company, is now the world's largest com- munications group. A coloured chart I have of its scores of subsidiaries, which dates from August last year and therefore does not include its latest acquisitions, is one of those labyrinths beloved of left-wing conspiracy theorists, with arrows leading from Swen Ltd (Channel Islands) to Indent Ltd (Bermuda) and thence to Festival Books & Associates Ltd (Hong Kong). Actually, by the standards of world busi- ness, the Corporation is not enormous: in the last six months of 1986 the turnover was £1,148 million and profits (before tax) £131 million. But both rose fast, by 56 per cent and 83 per cent respectively, and the speed at which the group has expanded is awesome. Murdoch's father, Sir Keith, only acquired an interest in News Ltd, the original business, in 1949. The conquests are entirely Murdoch's own doing, begin- ning with the key purchase of the News of the World from the Carrs in 1969, followed by the Sun development and the acquisi- tion of the Times group in 1981. The first American purchases date from 1973 and the real big expansion there, into films and television, took place in 1985-6.
Until recently, it was often said Murdoch was becoming financially strapped, paying too much, borrowing too much, for prop- erties whose chief purpose seemed to be to serve his megalomania. But Murdoch has never struck me like that at all. There is nothing of a Hearst or a Northcliffe about him, no power-madness. He is one of those people whose lurid image bears little rela- tion to reality. He is essentially a working newspaperman who itches to run static or fading properties better. That is his prime motive and it seems to me an excellent one. It is justified, not least, by his record. To the best of my knowledge he has never closed a newspaper and he has saved many. He does not pay more than he is obliged. He got the Sun and the Times group for practically nothing. He paid a lot for the Metromedia television companies in the US and the HWT group in Australia, but such properties, when soundly hand-
led, have a way of looking disgustinglY cheap as the years roll by. At the end of 1986 News Corporation had a total of £2.38 billion in short- and long-term debt. But the kind of profits now being generated by the British newspapers alone make this seem acceptable. There are lots of juicy assets like the Reuters shares. Moreover, the jigsaw pieces which will give Murdoch America's fourth national television net- work are now falling into place, and the profits this will eventually generate may easily outstrip even his present British haul.
All the same, I am worried by the Murdoch phenomenon. Exploding pub- lishing empires make me uneasy. It is true Murdoch is often obliged by local law to sell as well as buy. He has virtually disengaged from broadcasting in Australia. In the US, he has sold the Chicago Sun-Times (at a handsome profit of $55 million in two years) and will presumably dispose of the Boston Herald and New York Post too, to comply with FCC regula- tions. But these moves point to a contra- diction in the overall strategy. It is a characteristic of empires that they develop incompatible aims in different regions, the British Empire in the 1920s being a case in point. Justifying his move from broadcast- ing in Australia, Murdoch asserts: 'Print is still the premier means of communication.' But he uses the reverse argument in the US, where he is moving in the opposite direction. I have a hunch there is some kind of maximum size in communications, and Murdoch is already over it. Let us not forget that Cecil King once held Murdoch's position as boss of the biggest business of its kind in the world, and that IPC's period of most spectacular expansion immediately preceded his own fall and its decline and contraction. I am aware the two men have little in common. For one thing, King did have a Northcliffe streak, and it undid him. For another, he did not control the equity, and Murdoch does. All the same, there are disturbing parallels. Historians know that exploding empires have a disconcerting tendency to implode, for unforseen reasons and with little warning.
One reason empires fail is that they are too big to run; they are easier to create than to administer, consolidate and de- fend. I suspect the role of newspaper proprietor is ultimately incompatible with that of a global mega-tycoon. The Mur- doch I like is the boss who takes his coat off and helps to get the paper out. I don't want a spinning top who is forever bounding up and down the gangway of a 747. Newspap- ers need working proprietors as well as editors. They must have business sense, enthusiasm, flair, the ability to inspire admiration and fear — all of which Mur- doch has in abundance — but above all they must be there, not all the time but most of it. 'What happened to Lord Mur- doch in the end?' Just too many com- panies, old boy.'
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