Stephen Glover: Ageing Rupert's shrewd general bales out in the nick of time
Monday 02 March 2009
Peter Chernin may not be a name on every baby's lips, but as number two to Rupert Murdoch he is a very powerful man. Last week, he announced his resignation after 12 years in his present job at News Corp, having been unable to agree a new pay deal. He was already being paid amounts that make Sir Fred "the Shred" Goodwin look a like a cheapskate.
Many would say there are lots more executives where Mr Chernin came from. Rupert Murdoch has certainly been through a few in his time. But the departure is significant, possibly even worrying. Like all media companies, News Corp faces intimidating challenges. Maybe Mr Chernin is walking out because he cannot bear to deal with them, and prefers to trouser a pay-off put at £27m. It is also not crazy to wonder whether he might harbour a few doubts about the ability of Mr Murdoch, 78 next week, to ride the financial whirlwind.
For a year or two, initially to general amazement, I have been pointing out that Mr Murdoch is not immortal. Some journalists scoff at the idea that the most successful media magnate of modern times might be losing his grip. But Northcliffe and Hearst and Beaverbrook all died. Even Mr Murdoch cannot defy the ageing process. Just because his mother, Dame Elisabeth Murdoch, has just reached the age of a hundred, it does not follow that the "Sun King" can go on running one of the world's biggest media companies for ever.
In his recent biography of the mogul, Michael Wolff painted a convincing portrait of a man who, though far from gaga, is inclined to wander in conversation. Mr Murdoch is probably blind to the dying of the light. He doubtless assumes that he will go on for as long as he wants to. He has even taken over Mr Chernin's responsibilities – not a good sign. Even if the economic outlook were sunny, I would have my doubts about his ability to run a multi-billion dollar company in his eighties. As it is, doubts harden into something like certainty that he will not be able – or allowed – to do so in these turbulent times.
And yet people persist in pretending that Murdoch is indestructible. Perhaps the problem of imagining his demise is really the problem of conceiving how a man who assembled a ragbag of diverse and sometimes barely compatible media interests could ever be replaced. When people talk about a successor, they generally wheel out James Murdoch, Rupert's 36-year-old wunderkind son, said to be slavering at the chops at the thought of taking over from his Dad.
For me, the really interesting question is not whether James will replace his father – I assume he will – but whether he will be able to hold together the sprawling, ill-assorted empire of News Corp. Rupert is a brilliant, megalomaniac genius who loves the media in general and newspapers in particular. James is an apparently well-adjusted, technocratic, clever young man with no great feel for newspapers. Moreover, the clannish power struggles that have been rumbling away while Mr Murdoch has occupied the throne will explode into the Third World War when he stands down. Wendi, Rupert's ambitious wife, will not be amused.
My God, what turmoil lies ahead – and I am not even thinking of the financial upheavals in the media world. Factor those in and you have something that will make the American soap opera Dallas look like a meeting of the Lower Snodsbury parish council. Peter Chernin has jumped at the right time.
Can Auto Trader go on guarding The Guardian in the online era?
There are four daily national newspapers which are generally thought to be resistant to the gale-force winds battering newspapers. One is the Financial Times, whose international expansion has been a success. The Sun and the Daily Mail, though not unaffected by adverse conditions, should go on making good money throughout the recession – unless we all end up in soup kitchens.
The fourth daily newspaper commonly thought to be recession-proof is The Guardian. This is not because it is profitable. With its sister paper, The Observer, it lost £24.9m in its last financial year, though this figure contained exceptional items. In the present financial climate The Observer is certainly losing money, and I would be astonished if The Guardian were making any.
Nonetheless, the two papers have been buttressed by the considerable profits of the Trader Media Group, which publishes Auto Trader, the motoring classified ads title. It was therefore interesting to hear Carolyn McCall, the chief executive of Guardian Media Group, saying last week that the print version of Auto Trader will probably cease publication within five years. The online version of the magazine already produces over half the advertising revenue. Will it be able to make up the shortfall as the print version dwindles?
I haven't the faintest idea, but it would seem possible that Auto Trader in a few years may be a gradually diminishing asset. The Guardian's pot of gold is not inexhaustible.
With this in mind, it increasingly appears to have been an astute move on the part of Guardian Media Group to have sold 49.9 per cent of Trader Media Group for £334.8m in 2007. This gave it a fighting fund which – so long as it is not blown in foolish investments – should offer The Observer and The Guardian security even if the seas remain stormy for a long time.
Bankruptcy stalks US press, but staff numbers are still high
Why are newspapers faring even worse in America than in Britain? Partly because the internet is more ubiquitous there, and has taken more readers away from print. And partly because American titles, being with a few exceptions city-based, are particularly dependent on local classified advertising, which is flying to the internet or, during the recession, simply drying up.
The San Francisco Chronicle, that city's leading daily, is the latest newspaper to announce that it is teetering on the verge of closure. Last week, The Philadelphia Inquirer filed for bankruptcy protection, as did the Los Angeles Times and the Chicago Tribune a couple of months ago.
Staff at the Chronicle will have to accept cutbacks if the title is to survive.
According to one account, its newsroom has 275 journalists. This highlights another distinction between the American and British press. Even now, US titles tend to employ many more journalists than newspapers in this country with comparable circulations. Most things are bigger – but not necessarily better – over there, including editorial staffs.
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