Ink in his blood: will he keep the Sun shining for ever?

A farewell to empire

The Fox-Disney merger marks a strategic retreat for Rupert Murdoch, argues William Kane

It is in the nature of big corporate mergers that they are rarely much of a surprise: by the time these vast clunking aircraft carriers have turned far enough to face each other, speculation has been going strong for months, hungry Carl Icahn types have been agitating for years, and the whole thing is - but for the lackadaisical attentions of regulators and the flood of billable hours for lawyers and accountants - basically a done deal.

Not so with Disney’s acquisition of 21st Century Fox, however. It seemed to come out of nowhere - trailed for the first time in the American press only last month - and is eyebrow raising in many respects. The $66 billion price tag is certainly an interesting item, but given the amount of assets on the table, it is hardly surprising. Murdoch’s extensive film interests, his 40% stake in BSkyB, his youngest son … all are to be signed over to Mickey and friends.

For those of us in Britain, it is as much a matter of cognitive dissonance as anything else. For we are not used to the sight of Rupert Murdoch retreating. Yet a retreat is what this certainly is, despite his unconvincing attempt to call it, as in the Silicon Valley start-up argot, a ‘pivot’. If this deal goes through - and there are still regulatory issues to deal with - the Murdoch organisation will continue to exist, focused once more on its ‘bread and butter’, the print media. But it will be hard any more to call it an empire.

End of something

This deal is historic, then, make no mistake - for it brings to an end an era in which the media of several countries has been dominated by a single dynasty. Exactly what the lasting significance will turn out to be, of course, remains unknown, although we will pick out a few matters of interest later.

That Murdoch should cling on, regardless, to his print interests (there is even talk of his setting up a trust for them, after the fashion of the Scott Trust that operates the Guardian) is hardly surprising. He has ink in his blood - the son of a minor Australian newspaper proprietor, he rapidly eclipsed his father’s achievements in his homeland, but it was in Britain where he truly made his reputation. He took control of the News of the World, turning what was already a scandal sheet into a sensation by serialising Christine Keeler’s diaries. A financially-floundering paper of the Labour movement, the Sun, was his next major acquisition. In 1979, for the first time, it supported the Tories in a general election. By the early 1980s, he bagged his great prize, the Times, over the objections both of the left - who feared the growing power of a bilious enemy - and the traditional elite, who were increasingly losing their hegemonic position within the ruling class to ingenues like Murdoch.

The stage was set for a great set-piece battle with the powerful unions of the newspaper industry; Murdoch picked his moment, built a state-of-the-art press in Wapping, and crushed the printers unions after the move; the NUJ soon found itself unwelcome too, and since then a toytown company union has gone through a pantomime of collective bargaining in their place. There were many motive forces behind Thatcherism, but Murdoch provided the Iron Lady’s strongest ideological tailwind.

He had already, at this time, taken his biggest gamble - moving into satellite television. In America, paid-TV had found its first home on cable, but satellite operations existed by the point in the early 80s that Murdoch got involved. Cable was heavily regulated in Britain, although Thatcher was to change that, so satellite got the jump on it; but sending things into space was devilishly expensive, and Murdoch’s little flutter was very nearly disastrous. The day was saved by the premier league, which sold him the TV rights shortly after separating from the football league - now there was something Sky had that nobody else could get. In this period, also, he made his move into the US along a similar pattern - first picking up papers, then moving into film and television.

In the 1990s, his power reached its zenith. In America, Bill Clinton was tormented and even impeached almost, it seemed, on the say so of Fox News, which loomed even larger in the Bush years; Tony Blair famously struck a deal with him for support in 1997, something like Napoleon’s concordat with the Pope in reverse. He began moving into Asia. It was only in the second half of the 2000s that warning signs started to appear.

The most spectacular, from the British point of view, was the phone-hacking scandal, which we will not revisit in any depth here; suffice to say that it made, for a period of a year or two, his relationships with politicians and the police unavoidably toxic, though of course the left and liberals had complained about it before. That was long enough to rob him of outright ownership of Sky, which he had long coveted. But there was other evidence of backsliding. Murdoch’s acquisition of Myspace - at the time the leading social network, but today a footnote in the history of Facebook - was disastrous. It seems like another gamble after the fashion of Sky, and might have paid off like it; but it turned out that Mark Zuckerberg and his confreres had a better idea of the changes necessary to make social media into the vast phenomenon it is today.

Uncertain future

We do not want to write premature obituaries. Certainly we find interesting the properties he has kept hold of. There is no talk of his offloading the prestigious print titles he owns; he has also kept hold of Fox News (according to the rumour mill, in part to reassure Donald Trump, who fears it falling into enemy hands). Murdoch is not stupid; he knows that these are the instruments which give him the most political leverage. It seems - in his wealthy dotage - it is this he values, for while the Sun still turns a modest profit, his print portfolio has long been effectively subsidised by his other interests.

It is also a rather bearish statement on the prospects for the wider entertainment industry. Contrariwise, it is worth looking at this deal from Disney’s end of the telescope: they get a film studio (in the sense of a production company; the physical studio remains with Murdoch), a huge back catalogue, all told a fat slice of the movie business to add to their already generous share. They get a bevy of TV channels, and a substantial share in online streaming platform Hulu. They get a large stake in Sky, and the news is that Fox’s pursuit of outright ownership will not end under new ownership.

This is, in fact, an interesting episode in a whole other historic reversal. In the initial bloom of the film industry’s youth, the industry was highly vertically integrated - a Hollywood studio would produce a film in house, and then distribute it to their own chain of cinemas. This was a cosy arrangement - too cosy by half for the New Deal era, and after more than a decade of litigation, the landmark United States v Paramount division effectively forced the major studios to let go of their theatres in 1948. It was a serious blow to the industry, and it has never quite recovered that imperial pomp.

Back to the present. There have been countless supposedly mortal threats to the traditional entertainment industries. 2017 was a particularly torrid year for Hollywood, with a stream of underperforming features in the summer raising the unconscionable prospect that the relentless exploitation of superhero franchises might be wearing a little thin, and then the nightmare of the Harvey Weinstein rape scandal. Meanwhile, new competitors in the form of Netflix and Amazon Video are looking frighteningly mature at this point.

They also look pretty familiar to students of cinema history. In Netflix, we have a company that creates its own content, and then distributes it directly to the movie theatre it has installed on your device of choice (most new televisions will have it preinstalled, waiting for you to log in). The same is true of Amazon Video. Now look again at that bill of sale: film studio, distribution platform (Sky), streaming service (Hulu). The political environment, meanwhile, is rather different than 1948: antitrust laws still technically exist but are barely enforced, and the end of net neutrality in the US (won by quite spectacular levels of fraud) is an oligopolist’s dream. A modern streaming platform with every Disney and Fox film ever - now that would be something to behold, a much-needed but barely-deserved shot in the arm for a complacent media behemoth. Will it beat Netflix, no small operation these days? Who knows? We might recycle the tagline for a Fox non-classic, Alien vs Predator: “whoever wins, we all lose”.

The serious lesson is for the people most likely to miss the economic architectonics under the technical pizzazz and the sight of a great foe vanquished. It takes a lot more than a supreme court decision, or even something as grand as the internet, to stem capitalism’s monopolistic tendencies.