Rupert Murdoch Chases the Zeitgeist

by StockJockey

Tuesday, September 02, 2008 - 3:09 pm

The media sector has taken as many lumps as any over the past few months. There are few places to hide in the advertising slowdown, and the selloff has finally swallowed the stock of News Corp. (NWS-NYSE).

I was on board with Buysider Larry Haverty when he pointed out in February that News Corp was cheap, but we both got the direction of the stock wrong as the black hole swallowing all print operations takes down Murdoch:

February 5th 2008
``They did $1.8 billion in operating cash flow in the quarter,’’ said Haverty, helps manage $30 billion in assets, including almost 15 million News Corp. shares. ``Five years ago they only did $839 million. So this company has grown very rapidly. The stock has gotten really very, very little respect.

``It’s, among media companies, the fastest-growing company in terms of revenue and operating profit,’’ Haverty said in an interview with Bloomberg Radio. ``Most of this has been organic, although Rupert has hurt the multiple by making acquisitions which have turned out to be very strategically effective.

``This company is firing on all cylinders. The Fox entities in film production and cable television and the stations are just doing fabulously. They raised their guidance, they collected $250 million on the Super Bowl.’’

The stock is attractive at around 7.5 times cash flow, he said. ``This looks like a terrific situation here, and clearly the best of the bunch in terms of the large media companies.’ Bloomberg

News Corp's stock has played a brutal game of catching up to its peers as it ticked down to its recent 52-week lows. But if you are counting on Rupert Murdoch to pull a rabbit our of his hat and get the stock back to $20, you might want to read Michael Wolff's profile of Murdoch in Vanity Fair.

Who is in charge here? And why is he hanging out with limousine liberals.

He dishes on Rupert insatiable appetite for gossip:

He may be among the biggest gossips in New York. In the months of interviewing him, I found that the most reliable way to hold his interest was to bring him a rich nugget. His entire demeanor would change. He’d instantly light up. He’d go from distracted to absolutely focused. Gossip gives him life (and business opportunities). Vanity Fair

But that is merely idle chatter. StockJockey’s need to handicap the stock....is the Deng discount now priced in?

This most unsocialized of men is becoming socialized—sort of.

This is, in part, the Wendi transformation. The woman from Shandong Province, 38 years his junior, whom he married after breaking up his 32-year marriage to his second wife, Anna, has brought him into the liberal world. The angry outsider, the anti-elitist, the foe of airs and pretension (“Ole Grumpy,” as he’s known by various of his employees), has become part of the achieving, glamorous, clever, socially promiscuous set. Davos, Cannes, Sun Valley, Barry Diller’s yacht—this is now Rupert Murdoch’s world.

Or it’s his wife’s world, which he’s been drawn into.

It would be hard not to be. The girl whose American adventure starts in the kitchen of a Chinese restaurant before she can speak English and takes her to the Yale School of Management and then into the arms of Rupert Murdoch is a compelling heroine. Her adventure may be as great as his. He’s captivated by her ambition (their pillow talk, one might suspect, is business). You can see this as comic: no fool like an old fool—the shapeless conservative suits become Prada (although still worn with the singlets), his gray hair flaming orange (or sometimes aubergine). But I think that misses the true nature of the change. Of the plot twist. Rupert Murdoch is, characteristically, seizing an opportunity. The Zeitgeist is changing and he’s after it.

All right, he’s not quite a liberal. He remains a militant free-marketeer and is still pro-war (grudgingly, he’s retreated a bit). And there was the moment, one afternoon, when over a glass of his favorite coconut water (meant to increase electrolytes) he was propounding the genetic theory that the basic problem of the Muslim people was that they married their cousins.

And yet, he’s come to like the liberals more than the conservatives. Bono and Tony Blair and the Google guys and Nicole Kidman and David Geffen are his and Wendi’s circle. Facebook’s Mark Zuckerberg and real-estate scion and New York Observer owner Jared Kushner and Ivanka Trump are regular invites to the Murdochs’ for dinner. Liking Wendi’s friends so much better than his own (actually, he really had never had any friends), he finds himself with an increasingly divided temperament.

It’s life with Wendi versus life with Fox. (And, too, it’s The Wall Street Journal—and maybe The New York Times—versus Fox.) Vanity Fair

Wolff might be a bigger nutcase than Murdoch, but his piece is a fascinating take on Murdoch’s life as a 77-year old power player.

Wolff’s psycho-analysis might not be too far off the mark; perhaps a lobotomy is in store for someone....most likely shareholders who sit on their hands.

This story is insane.
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Guaranteed to put a smile...on at least Pinch Sulzberger’s face...

NWS One-Year

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