Murdoch and Immelt: Business Is Business

According to a Los Angeles Times story by Joe Flint, News Corp.'s Rupert Murdoch and GE's Jeff Immelt met in June to discuss the vitriolic on air sniping back and forth between the Fox News Channel's nasty conservative Bill O'Reilly and MSNBC's nasty liberal Keith Olbermann.

Here's what Flint wrote:

The on-screen and behind-scenes feuding between rivals Fox News and MSNBC, which has erupted in recent months like two kids squabbling, has gotten so loud that their parents are trying to tell them to knock it off.

Rupert Murdoch, chairman and chief executive of News Corp., which owns Fox News, and Jeffrey Immelt, chief executive of General Electric Co., which owns MSNBC, met up at the Microsoft CEO summit in Redmond, Wash., to figure out how to defuse tensions between the two channels, according to people familiar with the situation.

Apparently any cooling-off agreement that Murdoch and Immelt might have made hasn't trickled down and stopped the vitriol. Both cable TV channels continue to allow their hottest personalities (O'Reilly, Olbermann, Rachel Maddow, and Glenn Beck) to escalate, not tone down, their on-air insults and feuds.

The situation brings to the fore several business, journalistic, strategic, and entertainment issues.

First, continuing the on-air spats reinforces the fact that Fox News and MSNBC are not in the news business, they are in the entertainment business. The most important element in the entertainment business is storytelling, and the fundamental element in a story is conflict. The second most important element in entertainment is star quality. An entertainment company cannot succeed without either great stories or popular stars, and a hit requires both.

Therefore, Fox News and MSNBC, as purveyors of entertainment, require a constant infusion of stories full of conflict, delivered by popular stars. With the ready-made conflict of a political campaign over, new conflict needs to be either found or invented.

It takes a fair amount of time and lots of promotion and exposure to create a star, and these elements require the commitment of significant resources, the most valuable being air-time in the form of prime time, hour-long exposure and on-air and off-air promotion.

Thus, Fox News and MSNBC have huge investments in their stars O'Reilly, Beck, Olbermann, and Maddow. They created these venomous snakes, they have long-term contracts with them, and most importantly, they depend on them for ratings, which have gone up, in part, because of the feuding.

During a recession in which most media companies' ad revenue is declining, newspaper and magazine advertising revenues are falling off a cliff. Therefore, if the print divisions of large conglomerate media companies such as News Corp. are to survive, they need the revenue from the Web and TV businesses to keep them afloat.

News Corp. in particular needs the Fox News revenue because its main Web business, MySpace, is not doing well -- revenue is off -- and Murdoch's current pet project, the Wall Street Journal needs lots of money while it is in the process of a make-over in preparation of going after The New York Times.

If there is any doubt whatsoever in anyone's mind that Rupert's strategy is to attack the weakened Times, one only has to read the house ad on page A8 of the Monday, August 3, print edition, the headline of which reads: "All the news that's fit to read. Every day."

To compete with the Times Murdoch desperately needs O'Reilly and Beck's ratings and ad revenue generation, so he's not likely to tone them down. Immelt, for his part, probably understands Murdoch's needs and, I suspect, is sympathetic. MSNBC's profits are a mere pimple on GE's income statement, so they are not vital to GE's survival. Immelt's concern is whether Olbermann's and Maddow's sniping becomes so outrageous that it affects NBC News's credibility and, thus, GE's credibility, which is very important to Immelt.

Immelt's problem is that if it appears that he has muzzled Olbermann and Maddow, then it becomes "corporate interference" which, in turn, means that if he can influence Olbermann and Maddow, he can influence Brian Williams and NBC News and steer them clear of criticizing GE. Such interference would become a huge story that every self-righteous journalist, columnist, and blogger (in other words, virtually all journalists, columnists, and bloggers) would jump on and eviscerate Immelt.

So, Immelt is not going to say anything to MSNBC or its stars, and Murdoch is not going to tell Roger Ailes to muzzle anyone (Ailes runs the highly profitable Fox News and the profitable Fox Television Station Group). The only thing Rupert might say is "keep it up," which they are doing.

I suspect that when Murdoch and Immelt met they reassured each other that the vitriolic on-air feud among their valuable stars would not affect their personal relationship, the relationship between NBC and Fox on Hulu, or on any other business relationships they had.

The one thing we can be absolutely certain about in regards to these two industry giants is that above all else they know that business is business.

Follow Charles Warner on Twitter: www.twitter.com/CHWarner

Comments

[RobertHenryEller]

"First, continuing the on-air spats reinforces the fact that Fox News and MSNBC are not in the news business, they are in the entertainment business."

First, or before "First," this is not news.

As to Fox News and MSNBC (Apologies to Keith Olbermann and Rachel Maddow. I'm not talking about either of them.) being in the entertainment business: I, for one, am not entertained.

Anyone else out there find them entertaining?

I am not even amused.

Anyone else out there find them funny?

And for those of you who do think they're funny, let me clue you in: Fox and MSNBC are not laughing with you. They're laughing at you.

[realpolitic]

Very disappointing article and comments by the author! sadlt, the comments to the author show more insight than the article and his replies!

[disabledjim]

Two days ago Jeff immelt paid 50 mil in fines for defrauding the american thruogh govt contracts.BHO picks immelt personally to serve on his economic advisory board.BHO gives 139 BILLION in low interest loans to GE.So GE gets to use taxpayer money to pay fines for defrauding the american taxpayer.MSNBC pays KO 8 mil a year to lose to BO by 200% every night.Seems like alot of people are distracted and missing the larger issue.Obama-burton anyone?

[KatyJn]

You've never watched Rachel Maddow, have you Mr. Warner?

[CharlesWarner]

Yes, I have watched Rachel Maddow -- often. I may have been a little too critical of Maddow to include her in the "venomous snakes" label, but of ten her sarcasm does border on and even cross the line into venom, in my view. I know of people who think O'Reilly is a a fair and balanced, nice guy, and think Maddow is the worst, most biased, meanest woman in the world, so I included her in the group so as not to be accused of being biased to one side or the other.

[ashb]

Nice that you addressed this, because I was going to comment on how wrong it is to include Maddow in the "venomous snakes" category. It's very rare that Maddow calls out another cable news person, and she never attacks the way Olbermann does. It's only been within the past week or so that she called out CNN and their coverage of the birther stories -- which she started out as a response to Campbell Brown's absurd statement that only CNN does real journalism.

Say what you want about Maddow. She approaches her job with integrity -- yes -- with a liberal viewpoint, but she doesn't spew outright lies to try and bolster her argument. (She doesn't have to.) She may use sarcasm and humor to maker her point, but I don't see what's wrong with that. Give the state of the nation, sometime I think we can either laugh or cry. And I'd rather laugh.

[madcat007]

If you know people who think O'Reilly is a fair and balanced nice guy, I suggest you start running with a new pack of friends. Rachel is easily the nicest, warmest person on evening tv whether you agree with her or not. Sarcasm and venomous do not work hand in hand. While I like Keith a lot, I can't argue with him being included in this article since his fued with O'Reilly has been going on for a long time, but since I generally agree with him, it doesn't bother me at all.

[John Steiner]

I was going to chide you for dragging Rachel into the same discussion as O'Reilly and Olbermann. She is persistent, but IMO nothing like O'Reilly and Olbermann.

BTW, did you see her last night with Tim Phillips last night? She obviously has an opinion contrary to Mr. Phillips and made no bones about it, but she went out of her way to be fair to him, including letting him shamelessly ask for more corporate sponsors.

[realpolitic]

It is just disingenuous to compare any other news entity to Fox news, except perhaps the National Enquirer. Fox just makes it up! What other organization would say it was a mistake for Clinton to rescue the two female journalists or pretend the tea parties and health care Town Hall disruptions are really spontaneous and community based. It is all a charade! MSNBC has a point of view, but they are attached to reality and do not distort, lie, and do not usually scream at guests. Who could compare Glenn beck to anything other than a circus barker or a snake oil salesman? What he does has no relation to news or commentary.

[CharlesWarner]

The Huffington Post is an aggregation of liberal/progressive blogs and opinion, so I would expect that many of its readers would think that MSNBC does not distort the news. Since I am a Huff Post blogger, I tend to like MSNBC's stars' views on most topics, but I received a comment from a fan of O'Reilly who objected to my labeling him, but obviously agreed with the labeling of Olbermann and Maddow. So it depends on whose ox is being gored. Maddow and Olbermann are not objective or balanced and sometimes distort things.

[realpolitic]

Sir, MSNBC can have a point of view without distorting the news. Distortion of the news is not their policy like with Fox. I am well informed and have two master's degrees and I know cuurent events fairly well. Fox creates whole false naaratives that they continually feed and no other network works like that. Why do you think so many have so wildly misinformed views about the health care bill? Fox screams "socialism" all day and night. A recent study told that Fox viewers believed more untruths than any other network when asked if Saddam had WMD, was working with al Qaeda, and that the Iraqi war was popular with the world community. Most Fox viewers agreed with these false conclusions. I heard O'Reilly say that there was no debate at all that George W. Bush defeated al Qaeda in Afghanistan. What other network says such nonsense? If you want to pretend all biases are one and the same you might as well compare Rush Limbaugh to the New York Times and say both are equally skewed. Your idea of "balance" is phony, too. The reason for climate change is not disputed by climate scientists, for example. All stories do not need balance. They need accuracy! By the way, I have not even touched on the racially pejorative tone at Fox.

[disabledjim]

how big was the check that bc delivered to n korea.kji had a huge smilebut bill did not seem very happy while meeting w/kji.

[sipnsiz97]

Good article Charles.

I for one am still amazed at how well Fox News does in terms of ratings. Its unreal. As an independent I try to watch a good mix of Fox, CNN, and MSNBC, but had to stop watching Fox about 1 1/2 years ago, as their reporting pretty much just got out of control (they were already far right, then they went off a cliff). Its a shame, but obviously some people love it as their ratings continue to soar (they even had the highest amount of young people watching between 25-35). Are people that dumb?....maybe.

[CharlesWarner]

Thanks. Fox News ratings are up because it provides titillating and conflict-filled entertainment. In spite of its name, it is not news. You know it is not at all interested in telling the truth when its highly promoted slogan is "fair and balanced...we report; you decide." Please.

[ProfessorDuh]

If ignorance is slavery, Fox News is a whole damn plantation.

[ksjprod]

LMAO!

[realpolitic]

Great comment!

[1088]

Keith and Rachel are the best new correspondent we have today! They debunk and give the facts by investigating. O' Riley is a smear machine.

[CharlesWarner]

Keith and Rachel are not correspondents, they are commentators with a liberal point of view. They don't do news, they do commentary.

[realpolitic]

Sir, their commentary is full of factual, content, much unlike Glenn Beck and Bill O'Reilly. O'Reilly often cuts guests off when they go into facts because he likes to keep the show on a completely ideological level. i bet if you actually sat and counted the number of facts discussed on Olbermann and Madow and compared them with facts on Beck and O'Reilly you would be greatly surprised. Beck and O'Reilly discuss almost no facts at all or false ones. Have your students do it as an exercise.

If someone said that the war in Afghanistan is not going well, is it commentary? If they described violence in Iraq as dangerously high for the several years of the war, would it not be accurate? If they described the Bush presidency as a failed one, is it commentary when factually accurate? Sometimes the truth has a liberal bias!

[krocklin]

Among sensible viewers the views of Olbermann and Maddow are not sniping. They are digging up real news all the time.
Maddow's expose of a rightwing website encouraging protests against healthcare reform, which she gave last night, should be THE featured article on the Huffpost this morning.

[CharlesWarner]

I'm a fan of Rachel's, but there are those whoare fans of Fox News and O'Reilly who think she is a venomous viper. It's called confirmation bias. We watch on TV those channels and personalities who confirm our biases.

[noneIn2008]

They are in the advertising business. You must add GE is in the health care, war, and energy businesses.

[CharlesWarner]

News Corp. also own 20th Century Fox. But MySpace, Fox TV, Fox News, Fox Business, the Wall Street Journal, the NY Post, and the other News COrp. newspapers are all in the advertising delivery business.

[julieJgoldengay]

Shallow good looking people, acting snarkey? There's no business, like show business. News? I get my news here!

[CharlesWarner]

Yes, many intelligent people are going to the Web for the main source of news.

[ProfessorDuh]

Wrong. When a major "news" provider continually lies and distorts the facts, as Fox News does regularly, the documented exposure of that IS NEWS ITSELF, and an important service.

[jmengr]

Keith and Rachel behaving as they do is absolutely vital. For far too long the misrepresentations, poisonous invective, and outright lies of the Faux News crew went unchallenged. Someone with a big public signature MUST debunk these creeps.

[CharlesWarner]

I agree that Keith and Rachel are an antidote to Fox News. The problem is that the people who need to hear what they have to say will never watch -- they will continue to watch and believe Fox News. The biggest problem with Keith, and to some extent with Rachel, is that they add to the disrespectful, impolite debate. Obama has set a new tone of dignity and respectful disagreement, which I would hope would be followed by responsible on-air personalities. Olbermann is not following Obama's lead.

[madcat007]

I have never missed any of Rachel's shows and used to listen to her radio show when it was not a tv repeat and I have never ever heard her be disrespectful. Calling out someone doing underhanded things is not disrespectful. Rachel is painfully respectful, even to those who don't deserve it, like Pat Buchanan.

[StupideAmericans]

And the demise of American culture continues. You're being turned into a bunch of gapers -- people who slow down at an accident scene to "gape" at the carnage. Trashy tabloid crap that used to be seen only at supermarket checkouts is now everywhere. It's sickening. You're acting like bored, depressed housewives so braindead you settle for the cheap thrills of this fabricated "drama", thinking it's important because they brand it "news".

Here's a suggestion: save yourself 30, 40, 50 bucks a month and disconnect the cable. It's all crap (except Comedy Central, only because it doesn't pretend to be anything but funny crap). Instead go to your local Goodwill, blow a few bucks on some books (they have some pretty good ones), go home and read them. You'll be better off as a human being.

[ksjprod]

Oh, enlightened one, tell me... Is the typo in your screen name an accident or not?

[ksjprod]

Well, with all the reading you do you should have been able to spell your screen name correctly.

[CharlesWarner]

The only thing I disagree with in your comment is your use of the old fashioned and pejorative concept of "housewife" and the corresponding notion that all stay-at-home mothers are depressed and bored.

Speaking of good books, I just finished The Girl With the Dragon Tattoo and The Girl Who Played With Fire by Swedish author Stieg Larsson -- the best fiction I've read in years.

[deebles]

A human being reading the news on television is an anchor. There is a reason they are called anchors. They keep us steady and prevent our being caught in the drifting tides and running aground.
A human being talking ABOUT the news is a host. There is a reason they are called hosts. They want us to have a good time at their party and will serve us what we want.
'What we want' news is different from news, because what we want is usually what we know. Wanting only what you know makes you intolerant of what you don't know.
Instead of the news being just the news, now anything that differs from your want becomes not news--not true.
Now you are adrift; at the mercy of the tide. A Free Press is only as free as the mind it engages.
The news is neither right nor wrong--it just is. When all the anchors are replaced with hosts, there will be no more news on television.

[CharlesWarner]

Yes, we really miss Walter Cronkite -- the ideal anchor.