Billionaires are buying newspapers and media assets.
Not necessarily as a business proposition. The scheme is no different from keeping a K-9 unit in your backyard to scare if not snare thieves or intruders.
In business and political parlance, these media investors are buying influence, if not power itself. The pen, literally, figuratively and virtually, is mightier than the sword.
Despite the decline of print media and the rise of internet publishing, it is a power not easily measured by dollars and cents and market cap.
Rupert Murdoch perhaps epitomizes the tycoon able to use the power of the press to the hilt to pursue a political agenda and protect his economic interests.
A guy who featured topless women and crime and gore in his tabloids, Murdoch has survived a British parliament investigation into his tabloid reporters bribing police and politicians for info and the split of his News Corp empire effective June 28 this year into News Corp ($6.14 billion market cap) and 21st Century Fox ($72.6 billion market cap).
In 2007, Murdoch paid $5.6 billion for the Wall Street Journal and Dow Jones from the Bancroft family. Two years later, he was forced to take a $2.8 billion writedown on the purchase.
News Corp’s properties include The Wall Street Journal, Dow Jones, Herald Sun, The Sun, The Times of London, HarperCollins Publishers, and Fox Sports Australia
21st Century Fox holds cable, movie and equity stakes in pay-TV assets, including the Fox News Channel, FX Networks and National Geographic channels. It is launching new channels including Fox Sports 1 this August to compete with Walt Disney Co’s ESPN, and FXX, a new channel aimed at young adults.
All his life, however, Murdoch’s passion has been media. Recent investors in US newspapers apparently should have little or no business owning newspapers. And that could be dangerous.