Wednesday, July 20, 2011

What Next for News Corp?

The question of the day is:  Will the readers and viewers of Rupert Murdoch’s tabloid newspapers, television news networks and the Wall Street Journal continue to turn to those media outlets, or go elsewhere?

While the world has been watching the “voice-mail hacking, London police pay-offs, and British politicians courting News Corp executives” drama, many of us have been waiting for the other shoe to drop in the U.S.  Ten people have been arrested and two key executives have resigned, including the Publisher of the Wall Street Journal.
Until Sunday that was the closest the drama had come to Murdock’s adopted homeland.

News America Marketing is a relatively small subsidiary of Rupert Murdoch’s News Corporation, and Sunday a New York Times investigative story reported that division, alone, has paid out at least $655 million to make embarrassing cases of corporate espionage and anti-competitive behavior disappear.
The voice-mail hacking story was broken by British competitor The Guardian in 2009 and according to the New York Times, News Corp spent $1.6-million trying to put a lid on that issue.

But here in the States, the tab for settlements and lawsuits began to mount. Minnesota state government accused News America of unfair trade practices and the company ended up paying “costs” and promising to stop falsely bad-mouthing competitors.
Next, in 2009, Floorgraphics took News America to court, accusing them of “hacking” into their computers and stealing proprietary information.  The trial began, but it didn’t take News America long to see where the case was going and settled for $29.5-million and a few days later purchased the whole company.

The next year Valassis Communications filed suit and settled for $500-million.
That’s just the settlements we know about.

If General Motors or Bank of America paid a half-billion dollar settlement in a lawsuit, don’t you think the U.S. media would have reported that?  Did you ever read or hear about the News America payout to Valassis?
Now, to the question that began this post:

Unless there are worse revelations yet to come, I suspect News Corp will continue to do business as usual and the people who currently buy their newspapers and swear by the political point of view of Fox News will continue to do so.

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