Rupert Murdoch is in the process of purchasing Newsday, a major metropolitan newspaper for a cool $580 million. Sources from newsday.com announced on May 3rd that Cablevision Systems Corp. recently put in a bid to the tune of $650 million to acquire the daily. The same article also states that Murdoch won’t be matching the offer, but this has not been confirmed by Murdoch himself. The offers from the two companies are also different, the Cablevision deal would include real estate, while Murdoch’s offer leaves this out. This partially explains the premium of the Cablevision bid. Newsday, which serves Long Island, New York City, and surrounding areas, has a circulation of 400,000 and a reputation of solid gold. Murdoch already owns industry heavyweights such as the New York Post and the Wall Street Journal. Why would he want to add Newsday to the mix?
People may say a lot about Rupert Murdoch and not all of it is kind. However, no one can argue with the fact that Murdoch is smart and business savvy. You can be sure that he did his homework before putting that kind of money on the table. Experts surmise that Murdoch has a grand plan for making this latest purchase, perhaps to drive the future of a surprisingly stable print media empire. Add the newspapers with Murdoch’s affiliations in television and Internet media and one can quickly see how one easily benefits the other.
Contrary to popular belief, printed media is not on a permanent decline. In fact, the print industry is holding its own, even if it has suffered over the past few years. There is still a very strong market for print media, even with the advent of hand held electronics and Internet availability everywhere. There is no clear indicator that this will change in the near future.
People scoffed at Murdoch when he created FOX News. Critics ridiculed the media mogul for going up against CNN, Ted Turner’s news powerhouse. This is yet another area in which Murdoch flexed his well-trained muscle. FOX News, perhaps because of a more friendly approach, became the most watched cable news network. Score another one for Murdoch.
How could the purchase of Newsday be a bad move? There are more indications that the acquisition will affect the readership than the corporation itself. Murdoch has a reputation of being a staunch conservative in the political arena and often promotes candidates who support his views. If Murdoch’s personal opinions and practices are permitted to infiltrate his media holdings, liberal readers may lose interest. Lost interest equals lost funds. While it may be a tempting thought to use the media as a political platform, Murdoch is too smart to let that happen.
Another danger to the acquisition is government interference. If the Murdoch Empire continues to grow, as it surely will, the government will increase its interest in Murdoch’s grab for media monopoly. There may be some die-hard Americans that resent Murdoch’s buying power since he’s an Australian. It may seem ridiculous, but there are still prejudices that exist, particularly in the industries that were forged by the Founding Fathers. In the end, Murdoch’s purchase of Newsday promises growth. With a net worth of almost $9 billion, Murdoch obviously knows what he’s doing. Just be on the lookout for his kids who are following in daddy’s footsteps.