News Corp is Ailing. How Long Will The Murdochs Prop it up?

By: Christopher Warren

Few things say “company in decline” louder than the now-annual round of job cuts in the troubled news media segment of global media behemoth News Corp, with last month’s annual budget meeting in Sydney revealing more cuts planned across the next financial year. The highest-profile cuts are already rolling out at The Wall Street Journal, including the closure and transfer to Singapore of its Hong Kong office, once the home of the masthead’s Asia edition, which closed in an earlier round of cuts in 2017. 

News Corp’s major assets include Dow Jones & Co. which publishes the sturdily profitable Wall Street Journal, which nonetheless is undergoing a new round of job cuts under Emma Tucker, brought in from the Sunday Times in London. Others are The Sunday Times News UK, which publishes The Sun and The Times; News Corp Australia; REA Group, operator of realestate.com.au, realtor.com; and book publisher HarperCollins. (Nonagenarian mogul Rupert Murdoch appears unworried personally about the future, having married for the fifth time to Elena Zhukova, 67, earlier this month in California.)

A related company spun off in 2013 is Fox News Media, owned by the Fox Corporation, the most-watched cable news network in the US, which in 2023 generated 70 percent of its parent company’s pre-tax profit via service to 86 countries and territories. In 2023, in a last-second settlement, Fox paid out US$787.5 million to Dominion Voting Systems in an ugly defamation suit that exposed the news channel‘s utter disregard for the truth in its attempt to return Donald Trump to the presidency in 2020.

Over the past decade, News Corp has averaged about US$150 million in thanks-for-coming payouts in a relentless trimming of journalists, printers, and administrative staff. That’s about 1,000 people each year across the corporation. But no matter how finely corporate strategy slices the bread, it’s still serving up the same old, umm, sandwiches, with that familiar garnish of nose-turning ersatz journalism. It’s the media’s equivalent of the witticism, attributed variously to Albert Einstein, Benjamin Franklin, François de La Rochefoucauld, and others that insanity is doing the same thing over and over and expecting different results.

News Corp’s annual reports filed with the US regulator show that since the Murdochs split the family’s media assets in 2013, the News Corp arm has paid out more than $1 billion in employee termination entitlements (or “benefits,” as it calls them). Unusually for the company, News Corp last year tied the cuts to a 5 percent headcount reduction, resulting in 1,250 employees being let go. This year, it looks like it’s planning on culling the deck chairs along its Australian mahogany row. It’s a reorganization based on a business model: subscription-supported products (tagged, apparently, as “prestige” products, such as The Australian), the advertising-supported bertnews.com.au, and the apparently no longer viable business model of its metro mastheads. 

The reported consolidation marks the final step of wrapping the once-powerful Australian mastheads into a national offering through a single subscription, which the city brands now endure purely for marketing purposes. (The Australian media company Nine has done much the same with what insiders have long called “The SMAge,” the combination of Melbourne’s The Age and The Sydney Morning Herald.) For News Corp in Australia, it’s been a long-term management for decline, starting with national political news and the syndication of its tabloid commentariat, before following up with common supplements (like travel), then sections (like finance), and, finally, news. This drove a lookalike design of both print and web, as well as a shared chase for the same news-lite market of low-attention, aging, conservative men.

The national-dressed-as-local effect is starkest when mobilized to support the increasingly ineffective culture war crusades, with near identical, all-caps headlines shrieking the same message around the coast from Adelaide to Cairns. But they’re yelling at ever fewer of us; for News Corp, the strategy has failed and the decline grinds on. The company-wide adoption of the more aggressive Sydney tabloid style of The Daily Telegraph has driven away the mid-market audience once locked up by mastheads like The Courier-Mail in Brisbane and Melbourne’s Herald-Sun (or at least its predecessor, the Sun News-Pictorial). Meanwhile, the news-lite audience — trained by cable news and talk-back radio to gulp down whatever’s put before them — has slid into outright news avoidance.

The traditional consumers still engaged in news overwhelmingly lean to the left. The result? Subscriptions have plateaued, with Nine’s lightly paywalled mastheads The Age and The Sydney Morning Herald leading in readership ahead of News Corps’ more restrictively paywalled metro outlets.

News avoidance is eating at revenues from ad-supported distribution. Monthly unique audiences at The Sun in the UK are down by a third over the past year, and the New York Post is down by about 14 percent. The company’s free ad-supported site, News.com.au, is down, too, according to recent Ipsos rankings. Google’s pivot to AI-generated search (once it gets it right) is also expected to gut the key referrals to all news mastheads.

Faced with the same challenge, most of the families who built their wealth out of newspapers — like the Fairfaxes and the Packers in Australia — are long gone, having given up trying to manage their way through decline. In the US, most mastheads have ended up in the hands of private equity-owned chains happy to slash their way to quarterly returns in exchange for any thoughts of enduring influence.

Rupert’s longevity has left News Corp as an enduring challenge for the latest generation of Murdochs. Its core value is now as a holding company of a majority share-ownership in Australia’s REA Group, which by market cap is about two-thirds of News Corps’ worth. The remaining third can be ascribed to the Wall Street Journal and its book publishing arm, HarperCollins. All the rest, like the Australian mastheads, are a mish-mash of legacy media assets picked up by Murdoch, like a bower bird, from the 20th-century mass mediums of newspapers, magazines, and cable television.

They made sense at the time, once delivering the twin gifts of powerful cash flows (which, in turn, funded further acquisitions) and political clout across the Anglophone world, while also providing employment and content distribution for the family’s political loyalists. (Why, here’s Scott Morrison’s Plans for Your Good, published by HarperCollins. Or look over there, there’s Tony Abbott comfortably ensconced in his seat on the Fox board.)

Now? They’re just hard work. For how long will the largely disengaged American family continue to care?

Christopher Warren wrote an earlier version for Crikey Daily, Australia’s independent digital news source