Wednesday, May 02, 2007

Murdoch's Terrifying Gambit--Not Just Propaganda Anymore

By now one would have to be a hermit living in a cave not to be at least vaguely aware of Rupert Murdoch's recent bid to buy ownership of Dow Jones, and with it the Wall Street Journal at far higher than its actual market value before the bid was announced. Fortunately, that bid has been rejected by the majority owners, but to date the Bancroft family (owners of over 50% stake in Dow Jones) have not rejected the possibility of accepting a higher bid.

Murdoch has also announced detailed plans for a Fox Business Channel to compete with CNBC:

Presently, FOX Business Channel has 30 million subscribers under contract after securing distribution agreements with multiple cable operators, including: Time Warner; Comcast; Charter, and Direct TV. The network, which will be housed at News Corporation headquarters in midtown Manhattan, is expected to launch in major markets across the country, including the world’s financial capital — New York — where it will be seen on expanded basic cable.

In making the announcement, Murdoch said, “We have long considered the business television market to be underserved. Having built FOX News into a cable news leader and a cultural phenomenon against all expectations, I’m confident that Roger Ailes and his team can do the same in business news. I look forward to introducing new competition and a new voice to the business news arena.”

Most secondary reporting on this dual gambit has focused primarily on three issues in the abstract:
1) The anti-democratic nature of media consolidation in general;
2) Uneasiness at a foreigner's (Murdoch is an Australian by birth) owning much of the American media establishment; and
3) Democratic and progressive concern at yet another attempt to control even greater and more expansive propaganda efforts.

While all these are valid and legitimate concerns, they miss to my mind the greatest danger posed by Murdoch's takeover bid of America's premier financial newspaper and its cable business news information source: the possibility of direct market manipulation by Murdoch through these avenues.

It is true that I have no direct evidence for this claim, but direct evidence would be fairly difficult to come by. All I have is logic and circumstantial evidence--and that alone should be causing some raised eyebrows and at least some pointed questions to be asked.

Exhibit A: Murdoch would be paying a large premium for a newspaper outlet with declining sales, particularly among young readers. While Murdoch's history of moving to web-based content may render some of these concerns moot, the fact that online advertising revenues are not matching print revenues and are not likely to in the near future suggests that the only marginally profitable WSJ is likely to become less profitable at least in the near term, regardless of any movement online. In other words, this move is a clear money-loser for Murdoch on its face.

Exhibit B: Fox's stated intention in creating Fox Business Channel is supposedly to create a more business-friendly Business channel than its future competitor CNBC. The idea that Murdoch would be attempting to use an alternative business channel as a propaganda tool to place a right-wing (or more youthful) slant on business news coverage has long been seen as somewhat ludicrous--and it is. Attempting to propagandize the shareholder class at great startup expense beyond the somewhat less inflamatory pro-business propaganda of CNBC is a ludicrous idea, even for Murdoch. Furthermore, there is only a limited number of ostensible viewers for two cable business-news channels in the same marketplace--especially as viewers of business news are likely to dwindle in the face of what seems to be an evitable market downturn coming as housing prices continue to decline. It is difficult to see how Murdoch believes that this gambit will be politically or financially successful for him.

Exhibit C: The op-ed section of the Wall Street Journal is already rabidly right-wing; Murdoch's propaganda influence in the opinion section would do little to augment the overt bias already in existence there. If Murdoch were inclined to alter the paper's content, it would need to be in the actual news reporting sections--sections which have remained fairly accurate because actual business decisions have to be made based upon it. In fact, when asked about the conflict between owning the WSJ and starting Fox Business Channel, Murdoch said:
There are a lot of other things in The Journal, and their editors appear on Fox every Sunday," Murdoch said Tuesday when asked about that deal.

And as ABC News says directly below that quote:

The Wall Street Journal's influence goes well beyond its readers.The news on the front page of the nation's major newspapers often drives coverage at other papers and TV stations across the country.

Indeed. Perhaps it is time to consider alternative methods and reasons for Murdoch's interest in the journal beyond just the propaganda of the editorials...

Exhibit D: There is more to the Dow Jones Corporation than just the Wall Street Journal. As ABC News says in the same article:

In addition to The Wall Street Journal, Dow Jones also publishes Dow Jones Newswires, Barron's, several leading market indicators including the Dow Jones industrial average and a group of community newspapers.

In other words, Murdoch would control not only the journal, but also the newswires, Barron's magazine, and the market indicators themselves--whose composition he would be able to alter as he saw fit.


Now you can call me a tin-foil hatter if you will, but I see a man who
a) is willing to pay top-dollar for a declining newspaper outlet with little forseeable profitability;
b) is willing to pay top-dollar for a declining newsppaer outlet whose propaganda arm is already at full tilt for the Right;
c) is overtly stating a propaganda motive for starting a business channel in a difficult market already saturated with right-wing propaganda;
d) is attempting a takeover of a corporation whose influence is not limited to media coverage of the market, but directly influences and controls important aspects of the market itself.

And when I see those things, I do not believe it is unreasonable to ask whether this man may not be interested in something far more sinister than direct profit or propaganda influence. This is instead an attempt to take over the very institution of financial reporting itself.

To me, it stinks of an attempt to directly control every aspect of direct, legitimate financial reporting in order to deliberately sway the market itself if need be. It is the stuff of comic-book and action-movie supervillains. And I think it's high time somebody started asking some serious questions about it.

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