1 Times Warner $33,728
2 Comcast corporation $22078
3 Walt Disney co $17154
4 New co $12563
5 NBC Universal $12437.
Note: Dollars in millions
Source: Advertising Age(http://adage.com)data center/data popup
Shuchi Bansal & Shobhana Subramanian / Mumbai February 28, 2009, 0:54 IST in the agency faqs.com
Though 9/11 did not impact the Indian companies’ marketing budgets, they are curtailing their media spends now. Says Ravi Dhariwal, CEO (publishing) at India’s largest print media group Bennett, Coleman & Company: “The media industry has hit a perfect storm — first came the newsprint price hike, and then the advertising downturn.” Broadcasters have been hit by the slowdown too, and NDTV’s group CEO K V L Narayan Rao admits he’s seen nothing like this before.
To be sure, in the last quarter, print has been hit harder than TV and radio with a 25-35 per cent drop in advertising volume, claims Dhariwal. In Mumbai and Delhi the average decline in ad volume is nearly 40 per cent, says Manajit Ghoshal, chief financial officer, Mid-Day Multimedia.
Advertising rates too have plummeted, though newspaper publishers insist they are not discounting more than usual. Off the record, the COO of a media buying agency says the effective rates in print have declined by 50 per cent. K U Rao, CEO of Diligent Media, which publishes DNA, claims there have been rampant advertising rate cuts by media owners. “The ad rates are cheaper than they were in 2005, in spite of India being one of the cheapest countries in the world for advertising,” he laments.
Ad volume decline in print, and slower growth rate in television (14.2 per cent in 2008 compared to 20 per cent earlier) have clearly hurt the last quarter results of media companies. HT Media’s operating profit fell 26 per cent, with a 79 per cent drop in net profit (see table).
The Prannoy Roy-run NDTV posted a consolidated operating loss of Rs 95.5 crore and a net loss of Rs 118 crore, some of it on account of the launch of new entertainment channels, but revenues from news operations have declined by 10 per cent and news posted a net loss of Rs 16 crore. Rao says that the company’s losses are not unusual and everybody’s in the same boat.
The results for Television 18 were also poor. Its core news broadcast business saw a revenue fall of 32 per cent. Says Nikhil Vora, vice president, IDFC SSKI Securities: “We see a tough time for TV 18 because of the highly competitive environment in the core news broadcasting space, especially in a weak macro-economic situation.
Also, unlike in the past, the competition from ET Now will be severe as it belongs to the Bennett, Coleman group, which owns the biggest newspaper brand in the country.”
The implications of the crisis for print and TV have been alarming. Companies across the board are rationalising costs even if that means rolling back salaries — as is the buzz at several newspaper offices — or downsizing, as is the case at many media organisations.
India’s biggest newspaper company is said to have a plan to rollback salaries by about 20 per cent. NDTV, too, asked its employees to volunteer a 20 per cent cut in remuneration. The head of a Hindi news channel is not surprised. “Salaries had gone up six-fold in the last six years,” he said.
Many companies have restructured operations. Web18 and Infomedia, run by Raghav Bahl’s Network 18 group, let go of people — a couple of hundred — but mostly front-end and temporary staff, the company claims. When the Marathi newspaper group Sakal shut down the Delhi bureau of its English newspaper, 60 people were rendered jobless.
UTV Software got rid of 45 people when it closed down its Delhi office. Rivals would have you believe that Bennett has slashed 1,000 jobs, but Ravi Dhariwal says the figure is a third of that. HT Media has slashed jobs in its Hindi newspaper though the company’s CEO, Rajiv Verma, declined comment.
Put together, in print, TV, radio, outdoor, Internet and other media-related services, at least a 1,00,000 people could lose jobs, says Manajit Ghoshal. Consultants say his figure is highly exaggerated (“this isn’t the IT sector,” says one).
But Ghoshal insists that across media and in media-related services — advertising and design firms, printing presses, et cetera — downsizing will run into thousands of people. “Many Marathi newspapers have asked if we could print their paper while they shut down their own printing units,” he argues. A TV industry veteran insists that the sector will have to slash 50 per cent of its jobs to survive.
The Rs 800 crore radio industry which employs roughly 6,000 professionals in about 250 stations has already seen a 5 per cent job cut in recent months. There’s been a 15 per cent drop in advertising for radio players. Entertainment Network India Limited, which operates 32 Radio Mirchi stations, has completely outsourced its engineering function.
“Earlier, we had 50 engineers. Now we make do with seven or eight as the entire process is outsourced. It’s more cost effective,” says Prashant Panday, CEO, Radio Mirchi. In 2009, radio may grow at about 5 per cent or may remain flat.
Companies are controlling other costs too: Free snacks, cab bills, paper cups and even toilet paper supplies are under scrutiny. Newspapers have cut pages, magazines have shut down add-on magazines and Mid Day newspaper has re-negotiated the rent it pays for its offices in Mumbai, Delhi, Bangalore and Pune. Entry into new cities has been postponed unless “we find a franchise partner”, says Ghoshal.
Among broadcasters, Aaj Tak has shelved its regional foray while NDTV has no plans to launch the city-specific news and current affairs channel Metro Nation in any other city. Delhi Metro Nation is a year old and up for sale.
Mail Today, launched with much fanfare by the India Today group, is shying away from its promised 20-city roll out after Delhi. Metro Now, the city tabloid launched by a joint venture between HT Media and Times Group, is now a community paper for DLF.
Some factors peculiar to the media industry have aggravated the crisis. For a start, newspaper companies had gone into expansion overdrive. Both national and regional newspapers launched more and more editions to cover a larger constituency. Many new products were also born. Jagan Mohan Reddy, the Andhra CM’s son, launched Sakshi in Hyderabad. Sakal launched an English newspaper while HT entered the business newspaper segment two years ago.
Business Standard launched and then quickly shut down a Gujarati business daily, but continues with its new Hindi business daily. India Today launched a daily — Mail Today — last year while Metro Now came from Metropolitan Media. Says Ravi Dhariwal: “We scaled up too much for future growth, putting up additional capacity for new launches. Without doubt, we need to downsize to adjust to current reality.”
The television industry was even more ambitious but without a brick and mortar model. “Broadcasters’ entire business model was based on an excel sheet economy and the projections went haywire,” says a television industry veteran. TV Today Network’s executive director and CEO, G Krishnan, agrees: “The business model was flawed as there were no realistic topline or bottomline growth plans.”
Over-crowding and TV media fragmentation put the channels under pressure. The ensuing price wars to attract advertisers affected channel yields. Every new player tried hard to emulate the market leader and instead of growing the pie they started undercutting one another.
Critics argue that the print and television media model in India is flawed. India’s middle class is its USP. But Indian media has no direct commercial transaction with the great Indian middle class. The reason is the consumer’s disinclination to pay for media consumption. For instance, the DTH ARPUs (average revenue per user) in the US are $75 a month. Even in Malaysia, the ARPU is $20 compared to India’s $3-5.
Agrees K U Rao, CEO, Diligent Media: “The business model is dictated by industry leaders. If ToI decides to price its copy at Rs 4.50 in Mumbai, there is not much any other player can do but price its product around this price point. The business model is unlikely to change given that the readers are used to such low pricing.”
In the television industry, the analogue cable distribution system pushed the broadcasters to the edge. If CAS or the conditional access system (read digitisation) was implemented, it would have ensured that enough spectrum for channels was available. In digital cable, all channels are equal and no “placement fee” would have been required to push one over another.
This “placement” cost is killing the channels. A news channel executive says its monthly wage bill is Rs 1.25 crore while the distribution cost (placement fee) is Rs 2.75 crore!
The broadcasting lobby has no one but itself to blame for the “placement fee” fiasco. TV channels shot themselves in the foot when they opposed the government’s move to push CAS five years ago. Two major channels objected to CAS as they were in the prime bands and ruling the market. Their short-sightedness — they failed to see the revenue from subscription — has cost the industry its viability.
Whatever be the inherent flaws of the media industry, it is plunging headlong into a liquidity crisis as well. “Let’s put it this way, we have not seen the end of the crisis yet,” says Times group’s Dhariwal. Slowly, advertisers are beginning to delay payments or even default. “Individually they are coming and asking for a longer credit period — from 60 days to 120 days,” says a media industry expert.
But what if the cash flow issue snowballs? Well, then the borrowers (read media companies) will default on bank loans they took as working capital. And several TV channels and newspaper editions may need to shut down. Already, nobody is willing to lend to a media company any more. “The days of presenting a business model for the future and borrowing money are over,” says Ashish Bagga, India Today CEO.
Not many media outfits have shut shop yet, though NewsX did manage to find a buyer. The media grapevine has it that some of NDTV’s channels are on the block. With the kind of projections — a 2 per cent growth rate for all media in 2009 — being made by Madison’s COO Punitha Arumugham, many more media businesses may be put to hock. “Ad spends on TV may grow at 7 per cent but print and outdoor growth could be flat or even negative,” says Arumugham.
The Zee News CEO, Barun Das, does not view this as a slowdown but a correction in media. “The sector had shown an irrational exuberance. It will rationalise to an extent. Companies are clearly looking at cost structure efficiencies,” he says.
Despite his prediction, Real Global Broadcating is launching its new Hindi general entertainment channel on March 2. In Andhra, Sakshi TV will go on air on Sunday. And Network 18 is ready to launch the international business magazine Forbes in less than 60 days. India Today launched the American fashion magazine Harper’s Bazaar earlier this week, though with a very small team.
With companies focusing on lean operations, the media schools are also in trouble. Anand Pradhan at Delhi’s prestigious Indian Institute of Mass Communictaion says that in 2008, the school’s roughly 200 students all got placements. However, this year, barely 15 have job offers (of these, 11 have been hired by Business Standard).
Though TV Today’s media academy chief Sona Jha says that the 30 students of the school may be absorbed by the company, the fact is that there is a freeze on recruitment across all news media. And with those laid off by Sakal and others mostly finding it difficult to get jobs, it’s clear that there’s canker behind the headlines.
NDTV News operation revenues have declined by 10 per cent with a net loss of Rs 16 crore. NDTV Imagine contributes around Rs 35 crore to revenues, similar to Colors, but its GRPs are poor at 60-80. NDTV is demerging operations into news and entertainment.
IBN 18 The news operations are under pressure — the estimated revenue for IBN is Rs 33 crore. Viacom18, including Colors, posted an operating loss of Rs 65 crore on revenues of Rs 125 crore.
HT Media It increased the cover prices for Mint and Hindustan in December. The Hindi paper Hindustan has been gaining share at the expense of Dainik Jagran — its readership is now nine million — but the ad revenues have grown just 4 per cent during the quarter.
Zee Entertainment The management has scaled down the advertising revenue growth from 30 per cent to 15 per cent, and operating profits from 25 per cent to 5 per cent.
Deccan Chronicle Operating margins have crashed from 65.4 per cent to 25.3 per cent following a decline in advertising volumes and a sharp rise in operating costs.
Network 18 Core news broadcast operations have seen a revenue decline of 32 per cent. It will be difficult to fund the gestation losses of Web18, Infomedia and Newswire 18.
Zee News Ad revenues grew a robust 39 per cent led by market share gains across key regional markets.
Jagran Prakashan It has indefinitely delayed the launch of its vernacular business paper with the TV 18 group.
CEO, TELEVISION 18
* Media will suffer a tough year. The television industry may scrape through as the FMCG sector is still spending but print will face a problem. The pressure on print is more because it grew on the basis of advertising categories that are now silent: real estate, insurance, retail and the financial sector.
* TV is emerging as the most efficient medium. Its cost per thousand has reduced thanks to improved reach — the cable and satellite homes have grown from 40 million to 80 million.
* The broadcasting sector has also suffered because of regulation. There has been a price freeze on what TV channels can charge the distribution platforms.
CHAIRMAN, UTV SOFTWARE
* Other than print, the entire media industry is just a little over 10 years old so it has really never seen a slowdown, forget a meltdown. So, yes, it’s the worst one.
* UTV has absolutely no plans to prune its channels. We have pruned our cost model to almost close to breakeven in its “second” year of operation, which is 09-10.
* Sell off UTVi? We have no such plans. UTVi is not part of UTV Software group due to FDI restrictions, it is owned by me personally.
* The slowdown has aggravated a correction that was overdue. More than 70 per cent players entered the space with maverick investors, with an eye on IPO and an ‘encashment’ strategy. What would have taken two-three years to correct now needs to be done or is being done in six months.
What is TPT?
TPT identifies growth rich but Advertisement shy comapnies and gives them media space in BCCL platforms. In return, they get a share in Equity. Expected value of these TPT’s - Rs.1,700 Cr- Rs.3,000 Cr.
BCCL believes that Indian market is commodity driven, not Brand driven. Only 14,000 brands are actively advertising in India. But in US there are 8 lakh active brands. Hence there is a future for brands.
Who is following?
HT Media, NDTV, Dainik Bhaskar, Dainik Jagran, Mid Day.
Conflict: Editorial lenience to TPT companies.
Reference: Saha, Prijjal, Are private Treaties here to stay?, The Brand Reporter, Jan 16 -31, 2009.
William-Rupert Murdoch, AC, KCSG (born 11 March 1931) is an Australian American global media executive and is the controlling shareholder, chairman and managing director of News Corporation, based in New York. Beginning with newspapers, magazines and television stations in his native Australia, Murdoch expanded News Corp into British and American media, and in recent years has become a leading investor in satellite television, the film industry, the Internet, and other forms of media.
He is one of the few chief executives of any multinational media corporation who controls the company by reason of his own stake in it, held via a family trust.
Rupert Murdoch was born in Victoria, Australia, and was reading Philosophy, Politics and Economics at Worcester College, Oxford University, when his father, Keith Murdoch, died in 1952.
Before his death Keith Murdoch had accumulated a great number of shares in newspaper companies, including some representing a controlling interest in News Limited, an Adelaide company publishing an afternoon newspaper called The News. He had appointed an experienced journalist named Rohan Rivett, a childhood friend and mentor of Rupert Murdoch, as editor of The News with the hope that Rupert would enter a career in journalism and that Rivett would assist Rupert in learning the required skills. In his will, Keith Murdoch instructed his trustees that Rupert should begin his career at The News: “if they consider him worthy of support”. At that time of his father’s death, Murdoch had written articles for Oxford student newspapers and had worked for a number of newspapers in a junior capacity. Some thought he had little interest in journalism though and noted his enthusiasm for gambling and making money.
At the time of his death Keith Murdoch was heavily in debt, but possessed within a private family trust a considerable number of newspaper shares, some of which may have actually belonged to the Herald and Weekly Times.The trustees, in consultation with Keith’s widow and Rupert’s mother, Lady Elisabeth Murdoch, were forced to sell many of the shares and other property in order to repay debt and death duties (government taxes). Elisabeth was able to retain only the family home, Cruden Farm, and the shares in News Limited and its subsidiaries, a Melbourne magazine publishing company named Southdown Press and The Barrier Miner, a newspaper at Broken Hill, New South Wales.
Start of business career
Rupert Murdoch returned from Oxford to take up his duties as managing director of News Limited in 1953 and immediately developed an enthusiasm for the newspaper business that was not present before. His drive and energy infected the staff and the paper’s circulation and advertising revenue began to grow. He began to direct his attention to acquisition and expansion. He bought a rundown Sunday Newspaper in Perth, Western Australia, and, using the tabloid techniques that Northcliffe had taught his son, made it a roaring success.
In 1956 he began publishing Australia’s first and most successful weekly television magazine, TV Week, at Southdown Press in Melbourne, which also published Australia’s oldest women’s magazine New Idea. With the Perth paper, the TV magazine and a re-energised New Idea all providing a steady and improving cash flow he was able to obtain finance for more expansion from the Commonwealth Bank of Australia, a government-owned bank dedicated to supporting Australian business development.
A defining moment in Murdoch’s life was the Stuart case in Adelaide when The News began a campaign to free a young aboriginal carnival worker named Rupert Max Stuart who had been convicted of the murder of a small girl on a beach near Ceduna in the far west of South Australia during Christmas of 1958. Stuart was sentenced to hang. The News was critical of the case and investigated in an attempt to prove Stuart not guilty. This action raised the ire of Premier Thomas Playford, and after much deliberating, and even a Royal Commission, Stuart was spared the death penalty.
To neutralize public emotion on the issue of hanging he commuted Stuart’s sentence to life imprisonment and then established a royal commission, conducted by the state’s Chief Justice, the same judge who had passed sentence on Stuart. The outcome was a confirmation of Stuart’s guilt and a recommendation that News Ltd (of which Murdoch was managing director) and its editor be charged with nine counts of seditious libel, a form of treason based on medieval English law, and criminal libel. Eight of the charges were thrown out, but the jury could not agree on the ninth, which the prosecution subsequently withdrew. Shortly after this Murdoch replaced Rivett as editor of The News.
This experience gave Rupert Murdoch a taste of the overwhelming power of popularly elected politicians and would shape the future policies of all his newspapers. In 2002 Murdoch financed a motion picture Black and White which told a varied version of the Stuart story.
Over the next few years, Murdoch established himself in Australia as a dynamic business operator, expanding his holdings by acquiring suburban and provincial newspapers in New South Wales, Queensland, Victoria and the Northern Territory. including the Sydney afternoon tabloid, The Daily Mirror, as well as a small Sydney-based recording company, Festival Records. His acquisition of the Daily Mirror allowed him to challenge two powerful rivals in Australia’s biggest city and to outwit his afternoon rival in a long circulation war.
In 1964, Murdoch launched The Australian, Australia’s first national daily newspaper, based first in Canberra and later in Sydney. The Australian, a broadsheet, was intended to give Murdoch a new respectability as a ‘quality’ newspaper publisher and greater political influence. The paper had a rocky start, marked by publishing difficulties and a constantly changing succession of editors who found it impossible to deal with Murdoch’s persistent interference. Promised as a serious journal of the affairs of the nation, the paper actually veered between tabloid sensationalism and intellectual tedium until Murdoch was able to find a compliant editor who could abide with his often unpredictable predilections.
The departure in 1966 of the Liberal Prime Minister Robert Menzies saw a chaotic six years of politics after Menzies’ chosen successor Harold Holt drowned, to be replaced by John Gorton and then William McMahon. In 1972, Murdoch acquired the Sydney morning tabloid The Daily Telegraph. In that year’s election, Murdoch threw his growing power behind the Australian Labor Party under the leadership of Gough Whitlam and duly saw it win power. As the Whitlam government suffered a great loss of public support following its 1974 re-election, Murdoch soon turned against Whitlam and supported the Governor-General’s dismissal of the Prime Minister.
During this period, Murdoch turned his attention overseas. His business success in Australia and his fastidious policy of prompt periodic repayments of his borrowings had placed him in good financial standing with the Commonwealth Bank and he obtained its support for his biggest venture yet, the takeover of a family company which owned The News of the World, the Sunday newspaper with the biggest circulation in Britain.
Building the Empire
Acquisitions in Britain
Murdoch expanded to Britain in 1968. He succeeded in beating rival publisher Robert Maxwell in securing The News of the World, which had been the most popular English language newspaper in the world, claiming a peak circulation of 8,441,966 in 1950. By 1968, the circulation had dropped to around six million and a substantial number of its shares were offered for sale by a member of the Carr family, which had part-owned and managed the company for nearly seventy years.
It was also the first time Murdoch risked the whole business he had already created on the outcome of a new venture, for he mortgaged the most valuable of his existing Australian properties to buy the paper with a promise that he would share control with the existing Carr management. Upon succeeding, Murdoch not only controlled News of the World but had then completely regained full ownership of all his Australian assets.
Moving into the United States
Murdoch made his first acquisition in the United States in 1973, when he purchased the San Antonio Express-News. Soon afterwards, he founded Star, a supermarket tabloid, and in 1976, he purchased the New York Post. On September 4, 1985, Murdoch became a naturalized citizen, to satisfy the legal requirement that only US citizens could own American television stations. In 1987, in Australia, he bought The Herald and Weekly Times Ltd., the company that his father had once managed. By 1991, his Australian-based News Corp. had amassed huge debts, which forced Murdoch to sell many of the American magazine interests he had acquired in the mid-80s. Much of this debt came from his British-based satellite network Sky Television, which incurred massive losses in its early years of operation, which (like many of his business interests) was heavily subsidized with profits from his other holdings, until he was able to force rival satellite operator British Satellite Broadcasting to accept a merger on his terms in 1990. (The merged company, BSkyB, has dominated the British pay-TV market ever since.)
In 1995, Murdoch’s Fox Network became the object of scrutiny from the Federal Communications Commission (FCC), when it was alleged that News Ltd.’s Australian base made Murdoch’s ownership of Fox illegal. The FCC, however, ruled in Murdoch’s favor, stating that his ownership of Fox was in the public’s best interests. In the same year, Murdoch announced a deal with MCI Communications to develop a major news website, as well as funding a conservative magazine, The Weekly Standard. In the same year, News Corp. launched the Foxtel pay television network in Australia, in a partnership with Telstra.
In 1996, Murdoch chose to enter the world of cable news with the Fox News Channel, a 24-hour cable news station. Following its launch, the heavily-funded Fox News consistently eroded CNN’s market share, and eventually proclaimed itself as “the most-watched cable news channel.” This is due in part to recent ratings studies, released in the fourth quarter of 2004, showing that the network had nine of the top ten programs in the “Cable News” category. However, in recent years, its ratings have begun to decline.
In 1999, Murdoch significantly expanded his music holdings in Australia by acquiring the controlling share in a leading Australian independent label, Michael Gudinski’s Mushroom Records; he merged that with Festival Records and the result was Festival Mushroom Records (FMR). Both Festival and FMR were managed by Murdoch’s son James Murdoch for several years.
Expansion in Asia
Murdoch acquired Star TV from a Hong Kong company in 1993 (Souchou, 2000:28) STAR TV (Asia) and created offices for it throughout Asia, including Singapore, China, India, Pakistan, Vietnam, etc. It is one of the biggest satellite TV networks in Asia.
In late 2003, Murdoch acquired a 34 percent stake in Hughes Electronics, operator of the largest American satellite TV system, DirecTV, from General Motors for $6 billion (USD).
In 2004, Murdoch announced that he was moving News Corp.’s headquarters from Adelaide, Australia to the United States. Choosing a US domicile was designed to ensure that American fund managers could purchase shares in the company in circumstances where many chose not to buy shares in non-US companies. Some analysts believed that News Corp’s Australian domicile was leading to the company being undervalued compared with its peers.
On July 20, 2005, News Corp. bought Intermix Media Inc., which held MySpace.com and other popular social networking-themed websites for $580 million USD. On September 11, 2005, News Corp announced that it would buy IGN Entertainment for $650 million (USD).
Rupert Murdoch and Ted Turner have been competitors for quite some time. Murdoch launched the Fox News Channel to compete against Turner’s CNN.
In September 2005 the subject of Murdoch’s alleged anti-competitive business practices resurfaced when Australian media proprietor Kerry Stokes, owner of the Seven Network, instituted legal action against News Corporation and the PBL organization, headed by Kerry Packer. The suit stems from the 2002 collapse of Stokes’ planned cable television channel C7 Sport, which would have been a direct competitor to the other major Australian cable provider, Foxtel, in which News and PBL have major stakes.
Stokes claims that News Corp. and PBL (along with several other media organizations) colluded to force C7 out of business by using undue influence to prevent C7 from gaining vital broadcast rights to major sporting events. In evidence given to the court on 26 September, Stokes alleged that PBL executive James Packer came to his home in December 2000 and warned him that PBL and News Limited were “getting together” to prevent the AFL rights being granted to C7.
Recently, Murdoch has bought out the Turkish TV channel, TGRT, which was previously confiscated by the Turkish Board of Banking Regulations, TMSF. Newspapers report that Murdoch has bought TGRT in a partnership with Turkish recording mogul, Ahmet Ertegün and there are alleged reports that Murdoch has acquired Turkish citizenship to overcome the current obligations against capital sales to foreigners.
Murdoch has been married three times. In 1956 he married Patricia Booker, a former shop assistant and air hostess from Melbourne, with whom he had his first child, a daughter Prudence, born in 1958. Pat did not like Adelaide with its extremes of weather and where she had few friends and Rupert was frequently away building the foundations of his future empire. They divorced in 1967. In the same year, he married Anna Tõrv, an Estonian-born cadet journalist working for his Sydney newspaper The Daily Telegraph.
Tõrv and Murdoch had three children: Elisabeth Murdoch (born in Sydney, Australia August 22, 1968), Lachlan Murdoch (born in London, UK September 8, 1971), and James Murdoch, (born in Wimbledon, UK December 13, 1972). Murdoch’s companies published two novels by his then wife: Family Business (1988) and Coming to Terms (1991); both were seen as being vanity publications. Anna and Rupert divorced acrimoniously in June, 1999.
Anna Murdoch received a settlement of US$ 1.2 Billion assets. Seventeen days after the divorce, on June 25, 1999, Murdoch, then 68, married Chinese born Deng Wendi, later changed to Wendi Deng. She was then 30, a recent Yale School of Management graduate and newly appointed vice-president of STAR TV. Anna Murdoch was also remarried, in October 1999, to William Mann.
Murdoch has since had two children with Deng: Grace (born in New York November 19, 2001) and Chloe (born in New York July 17, 2003).
Murdoch’s eldest son Lachlan, formerly the deputy chief operating officer at the News Corporation and the publisher of the New York Post, was Murdoch’s heir apparent before resigning from his executive posts at the global media company at the end of July 2005. Lachlan’s departure left James, chief executive of the satellite television service British Sky Broadcasting since November 2003, as the only Murdoch scion still directly involved with the company’s operations, though Lachlan has agreed to remain on the News Corporation’s board.
After graduating from Vassar College and marrying classmate Elkin Pianim (the son of Ghanaian financial and political mogul Kwame Pianim) in 1993, Murdoch’s daughter Elisabeth, along with her husband, purchased a pair of NBC-affiliate television stations KSBW and KSBY in California on a $35 million loan from her father. By quickly re-organizing and re-selling them at a $12 million profit, Elisabeth emerged in 1995 as an unexpected rival to her brothers for eventual leadership of the publishing dynasty’s empire. But after quarreling publicly with her assigned mentor Sam Chisholm at BSkyB, she veered out on her own as a television and film producer in London, where she has enjoyed independent success in conjunction with her second husband, Matthew Freud.
It is unknown whether Murdoch will remain as News Corp’s CEO indefinitely. The American cable television entrepreneur John Malone was for a time the second largest voting shareholder in News Corporation after Murdoch himself potentially undermining the family’s control. In 2007, the company announced that it would sell certain assets and provide cash to Malone’s company in exchange for the cancellation of their stock. Murdoch in 2007 issued his older children with equal voting stock perhaps to test their individual interest and ability to run the company according to standards he has set.
Criticism and controversy
In 1999, The Economist reported that Newscorp Investments had made £1.4 billion ($2.1 billion) in profits over the previous 11 years but had paid no net corporation tax. It further reported, after an examination of what was available of the accounts, that Newscorp would normally have expected to pay a corporate tax of approximately $350 million. The article explained that the corporation’s complex structure, international scope and use of offshore havens allowed News Corporation to avoid tax.