Despite ongoing family disputes, the Murdoch media empire continues to flourish, driven by strategic decisions and market adaptability. Fox Corporation and News Corp, the twin pillars of Rupert Murdoch’s media legacy, are experiencing robust growth even as the media landscape undergoes significant transformations.
According to Jessica Reif Ehrlich, a media analyst at Bank of America, “They were always the most entrepreneurial company – they could always see around corners.” This foresight is evident in Fox’s stable audience figures, with its broadcast of the Indianapolis 500 last month attracting 7.1 million viewers, the highest since 2008. Meanwhile, Fox News recently reported its most-watched quarter in cable news history, fueled by the political tumult surrounding the current White House administration.
Fox Corporation’s Strategic Maneuvers
Despite a contracting cable market, Fox has managed to achieve modest growth in affiliate fees, increasing from $5.9 billion in 2020 to $7.3 billion last year. The resurgence of Donald Trump in the political arena has also bolstered Fox’s advertising revenue, as mainstream advertisers like Amazon, Netflix, and General Electric have returned to the network.
“Because of the election results, many advertisers have sort of rethought their positioning in this country and understand that the Fox News viewer really does represent middle America,” Lachlan Murdoch, Fox’s chief executive, stated in March.
Fox has largely avoided the costly streaming wars that saw many media companies incur significant losses. Instead, it acquired Tubi, a free ad-supported streaming service, in 2020. Tubi has since surpassed competitors like Pluto TV and is projected to generate over $1 billion this year. Fox’s latest venture, Fox One, aims to integrate all of its linear content into a single platform, set to launch before the NFL season in September.
News Corp’s Diversified Success
News Corp, the other half of the Murdoch empire, has found favor with investors for different reasons. While print media faces challenges similar to cable television, with declining circulations and advertising revenue, News Corp’s stock has risen nearly 50% over the past two years. This success is partly due to Dow Jones, which owns The Wall Street Journal. Unlike advertising-dependent titles, the Journal has thrived with a subscription-focused model, similar to The New York Times.
Dow Jones also benefits from a high-margin business supplying data to companies, with revenue increasing by 40% since 2020. HarperCollins, another News Corp asset, has contributed to growth through a surge in audiobook sales.
The REA Group Factor
However, the most significant driver of News Corp’s share price is its 61% stake in REA Group, an Australian property-listing platform. The Murdochs invested in REA in 2001, and the company’s market value has since soared to over $20 billion, exceeding News Corp’s own valuation by $4 billion.
“The market’s enthusiasm is for REA,” argues Jason Bazinet of Citigroup. He notes an 84% correlation between News Corp’s share price movements and those of REA from 2017 to 2024.
Family Dynamics and Future Implications
While the Murdoch empire thrives, family tensions simmer beneath the surface. Rupert Murdoch is reportedly keen to secure the leadership of his eldest son, Lachlan, against potential challenges from his siblings, Prudence, Elisabeth, and James, who hold differing views on the political direction of the Murdoch outlets.
Under the terms of the family trust, these siblings could potentially oust Lachlan after their father’s passing. Unless Rupert Murdoch can amend the trust or negotiate a buyout, significant changes could be on the horizon for the Murdoch companies.
As the media landscape continues to evolve, the Murdoch empire’s ability to adapt and thrive amid internal and external challenges remains a testament to its enduring influence and strategic acumen.
