Over
the past five or six decades, nobody has dominated the world of print media and
entertainment like that of Rupert Murdoch. Murdoch has amassed a multi-billion
dollar fortune over the last 60 years by dominating the print media market, and
more recently, refocusing his attention on entertainment studios. However, the
creator of News Corp. announced last week that he would be stepping down as the
head of several of his UK-based print media outlets. Over the last few years,
several of Murdoch’s UK print media sources have come under fire for illegal
and unethical business practices. Several of the employees from those UK
newspapers were involved in what a Yahoo News article describes as, “a phone
hacking scandal at the now defunct News of the World tabloid that damaged the
reputation and value of the company in Britain.” Following these incidents, as
well as the companies’ inabilities to return a profit over the last few years,
Murdoch has been rumored to possibly sell the British paper companies. Amy
Thomson and Edmund Lee discussed in their article that several of the British
papers have been in a gradual decline over the last several years including The
Sun which dropped 7.7 percent since last year.
Another
reason why Murdoch stepped-down as the head of the British papers is because
the assets that Mr. Murdoch owns are going to be split. John Burns discussed in
his New York Times article that, “one company will consist primarily of
newspapers and other print assets, while the other will own the far more
profitable television and film enterprises.” Murdoch will serve as CEO of the
electronic media half, and serve as a chairman of the print media half. This
split of Murdoch’s media empire can have several ramifications within the
market. First off, print media has been on a drastic decline in terms of being
economically viable within this new technology-driven society. Outside of a few
of Murdoch’s high-profile print sources, most print media sources are unable to
turn a profit. Therefore, without millions of dollars in annual revenue being
supplied to these print media outlets, one may wonder if this will be the nail
in the coffin of print media all together. Also, another ramification of this
split is that both companies will become publicly traded. Therefore, these two
“Murdoch Enterprises” will soon be bringing in more money, but will also be in
the hands of many more people.
For
managers, the split of Rupert Murdoch’s media assets can be a gold mine, or
could lead a complete collapse. Managers, especially those within the print
media half, need to figure out a way to maximize revenues, as well as be able
to remain economically viable without reliance on outside subsidiaries for
bailouts. This split could possibly lead to the collapse of print media
completely, which would lead to new economic issues such as job losses.
Therefore, this situation may be focused around Rupert Murdoch’s decision to
step down, but actually could have much more ramifications for managers than
are available to the naked eye.
Sources:
http://www.businessweek.com/news/2012-07-22/murdoch-retreat-from-newspaper-boards-clears-legacy-before-split
When big companies have their successful leaders leave, it can affect the corporation greatly. A prime example is when Steve Jobs left Apple. Although this can give others an opportunity to redirect the UK-based print media in a more successful direction, it can also hurt the company. This is something that we wont know until action takes place.
ReplyDeleteI do agree with you that this could be the collapse of print media. I also know that this wil create more job losses and that would not be good for a lot of people. But as Kimberly says, only time will tell what will truly happen u ntil it takes place.
ReplyDeleteI totally agree that only time will tell. When Steve Jobs left Apple it was a huge deal and many people were scared of its' future and the stock market showed that.
ReplyDeleteI think that it is a great idea to have both companies publicly traded. Murdoch has made lots of money and controlled his media industries very closely. This is a step in the right direction for media that in my opinion will not have a negative impact.
ReplyDeleteAlthough the fall of the company is coming due to scandal they were probably going to soon be dealing with financial issues anyway. With the internet containing such a wealth of information and being made more accessible these days with the internet access available on cell phones and tablets, less people are actually sitting down reading print papers when they can read right from their devices. This company will definately have to become more creative in attracting people to their print media company or exert their energy into the television and film enterprise.
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