Prompted by a discussion on the Labour Uncut version of my last post, and not really finding the information in the press, I thought I’d take a peek inside the NewsCorp annual report, to see exactly how much this “little local difficulty” bothers him financially.
2010 figures:Annual gross revenues NewsCorp £ 20,592m*
Annual profits NewsCorp £ 1,595m*Annual profits Times Newspapers £ -45m
Annual profits News Group (Sun, NOTW) £ 40m
*$32,776m and $2,539m, using a rate of $1=£0.628259
So, a couple of observations:
One. NewsCorp is the world’s 284th largest company. If NewsCorp were a country, it would be the world’s 85th largest in terms of
GDP, between and Kenya . Or about half the size of that of Wales. Except that, unlike Costa Rica , as leader he is not elected. He really is the feudal king of all he surveys, as long as the shareholders are kept happy. So think of it more as, if you like, King Rupert of half-of-Wales. A latter-day absolute Tudor monarch. Wales
Even before we look at the disproportionate influence a media company has compared with ordinary companies, that’s quite a lot of medieval-style power. We’re quite lucky he’s not allowed to raise a private army.
Two. The combined profits of Times Newspapers and News Group are currently negative because of the former’s losses, so both could be closed without affecting earnings. But even in the happy event that Times Newspapers were back in profit and making one as large as News Group (i.e. 80m for the two groups combined), it would contribute only 5% of the profits of the whole group. So financially the whole NI issue is little more than an irritating mosquito to Murdoch, albeit politically important to the name of his group in the
Conclusion: as long as he can ring-fence the rest of his empire from the political fallout of the scandal – which seems quite likely, given that there is no evidence so far to link the vast majority of his empire to the same illegal practices, his company will not only survive but continue to be a huge global power. Miliband, being the Leader of the Opposition (and not, let’s not forget, the Prime Minister), has virtually no financial resources and little power, except that of harnessing the outrage of the British people and the embarrassment of the Tories. But this really is
David and Goliath.
Ed, you need continue to keep Cameron close on this. You need him for cover. If this becomes merely Labour vs. Murdoch, there will only be one winner.