While New York may be the administrative home of News Corporation, its spiritual home remains Australia.Credit: Stephen Kiprillis
In May, 30 years after arriving in Australia for his first taste of the family business, Lachlan Murdoch welcomed two of his father’s most senior lieutenants to Sydney.
Fiercely loyal editors-turned-executives in News Corp’s UK boss Rebekah Brooks and global chief executive (and Australian) Robert Thomson walked into the Holt Street offices, on a mission to greenlight the media company’s largest corporate makeover of the digital era.
Eyes on the prize: Lachlan Murdoch arrives for a probate court hearing in Reno, Nevada.Credit: Emily Najera/The New York Times
While New York may be the administrative home of News Corporation, its spiritual home remains Australia, where Keith Murdoch began the family’s association with news media, and where Rupert and Lachlan would have their first experiences inside newsrooms.
Since 2014, there had been little change to the “feudal” organisational structure of the company, as described by Kim Williams in 2014 after he lost an internal battle against its most senior, Murdoch-backed editors.
Williams was “too eager to get ahead of the digital curve”, according to a media column in The Australian at that time, at a point when the national broadsheet itself was publicly a loss-making entity, propped up by the money-printing tabloids.
Fast forward a decade and not only is Williams chairing News Corp’s arch-nemesis, the ABC, but the company is grappling with the tasks of shaving $65 million from annual spending, and replacing the $15 million hole in revenue left behind by Meta’s withdrawal from the media bargaining code.
The lavish 60th birthday celebration for The Australian in July served as the perfect backdrop for the changes afoot at News Corp.
The party was a coming-of-age moment for Lachlan, as he hosted Australia’s most powerful political and business figures, asserting himself as the new head of the family business. While The Australian was launched by Rupert Murdoch, it is Lachlan who now wields the keys to its future.
Past and future: Sky News’s Paul Whittaker (centre, back row); News Corp Australia executive chair Michael Miller (middle row) and his wife Tonya sit next to Qantas chief Vanessa Hudson. News Corp veteran editor Peter Blunden sits front right.Credit: Jesse Marlow
Playing out in secret, a family civil war was brewing, with Rupert’s explosive attempt to formalise Lachlan’s long-term control over the company in a courthouse in Nevada.
While that case remains unsettled, News Corp’s local operations have already started to look more like a company operating in the mould of its new patriarch.
With Lachlan residing in Sydney, the centre of power has returned to Sydney’s Holt Street, where he has cultivated a generation of his own editorial lieutenants, in turn ousting the old guard.
The recent restructure served as “a literal changing of the guard”, as described by one senior journalist at the company, speaking on condition of anonymity, shoring up his new-age news empire.
Waning appeal
Rupert Murdoch’s vast influence combined the ubiquitous reach and profits of the tabloids at the height of print news, alongside prestige titles, like The Australian and The Times that are read in the corridors of power in Canberra and London’s Whitehall.
However, changes to news consumption means reach no longer equates to commercial returns.
Instead, book publishing, digital real estate (REA Group), Fox News and the Dow Jones company, which houses The Wall Street Journal, have proven top profit drivers for the Murdochs since splitting News Corp into a news company and a film company in 2013.
Dow Jones was spun out into its own division five years ago to reflect its relative strength against the other news media assets. Its highly rated chief executive Almar Latour is a rumoured long-term replacement for News Corp chief executive Robert Thomson. Excluding Dow Jones, News Media makes up just 7 per cent of profitability.
Also in place is a new three-tiered hierarchy for the Australian operations, with the cost-saving initiative positioning The Australian as its most valuable asset, alongside other “prestige” titles Vogue and GQ.
The tabloids, which have struggled to establish comparable digital footprints are now housed in the Metro and Sport division (internally coined the “messy middle”), while the bottom “Free News and Lifestyle” tier, houses news.com.au, which faces the existential bottoming out of the digital advertising model, and News Corp’s e-commerce titles.
Each division now has its own publisher, reporting lines and balance sheets. There is nowhere to hide, and it hands News Corp management an opportunity to assess the viability of each on the merit of their respective strengths and weaknesses. Revenues at News Corp Australia have fallen by $400 million in the last five years, according to US filings.
All signs (revenue, reach and influence) point to the tabloids such as the Herald Sun, The Daily Telegraph, The Sun, and The New York Post playing second fiddle to the broadsheet titles.
Corporate filings show The Australian has grown its subscription business by 33 per cent since 2021, while the once-powerful tabloids have faltered.
In the three years ending June 30 this year, only the Herald Sun grew its subscriber base, while the number of those paying for The Courier Mail, The Daily Telegraph and The Advertiser declined.
The Australian (321,188) now has more paying subscribers than the Herald Sun (155,111) and Telegraph (144,246) combined.
The same week Lachlan became chair of News Corp in November, Thomson lauded News Corp’s shift to digital subscription revenue over traditional advertising. “We are more profitable, more digital and less dependent on the ebb and flow of advertising,” he said.
For News Corp and its peers, it’s subscription growth or bust.
A literal changing of the guard
Throughout the years, the power of News Corp’s editorial leaders in Col Allan, Chris Mitchell and 50-year News veteran Peter Blunden was directly linked to their proximity to, and direct line with the boss, Rupert.
There are other examples too, like News Corp’s most powerful non-Murdoch, the Victoria born-and-bred Thomson. Poached from The Financial Times in 2012 to run The Times, he is now considered Rupert’s best friend, and has run the company for nearly 12 years. Brooks, who climbed the company tree after joining the now-defunct News of the World in 1989, withstood the phone-hacking scandal through her unparalleled relationship with the family.
Her presence during the final discussions in May indicates her ongoing influence beyond Britain. The recent restructure has finally closed that chapter in Australia, with a new suite of editors ushering in Lachlan’s era, which had already been in the works for years.
Together, Ben English at The Daily Telegraph, and Sam Weir at the Herald Sun won out in an editorial power struggle, eventually splitting the responsibilities and reporting lines of Blunden, who had flagged an intention to step back, as the last of this generation.
The Telegraph’s weekend editor Mick Carroll, who rose through the ranks in the 1990s in News Corp’s Queensland division – then led by a young Lachlan Murdoch, has also emerged a big winner, named de facto editor-in-chief of news.com.au, leading the Free News and Lifestyle division.
English and Carroll’s Telegraph saw a 5.5 per cent drop in subscribers in the 2024 fiscal year, both The Courier Mail and the Herald Sun now boasting more paying readers.
Murdoch’s papers never shied away from flaunting their capacity to influence politics, sway elections and pick winners. Previously politically flexible, they have become much more rigid as Lachlan’s influence at the company has grown, now bolted-on in their support for conservative party politics.
The Australian endorsed the Liberal Party at each of the past five federal elections, while none of the four daily metros have endorsed Labor since at least 2010.
“The strength of the tabloids has always been the political impact of the front page, rather than the opinion pages,” says one former senior editor, speaking anonymously as they are still involved in the industry.
That impact has been lost in recent years, they add.
Another reason for the decline in influence could be the move in 2020 to centralise a number of editorial functions for national topics across the metro papers.
Under the digital initiative, led by Blunden – called by local boss Michael Miller the company’s “most senior editorial leader”, a National reporting team would remove the silos across the metro, community and regional mastheads.
Blunden’s responsibilities then covered national news, some federal politics coverage, a national sport team, foreign correspondents, the Newswire service, racing coverage and real estate content. Blunden also filled the business pages with copy from The Australian, and oversaw the Hobart Mercury, Geelong Advertiser and The Weekly Times.
Upon his appointment, Blunden said journalism should be “done once, done better and shared across the company”.
It may have been more cost-effective, but this turned out to be the moment subscription growth stopped for the tabloids, with content now duplicated across different mastheads, including The Australian.
And despite the bright spots at the Herald Sun and The Australian, total audience for both papers is down according to Ipsos, suggesting a more concentrated audience profile.
While news.com.au is the most read news website, none of News’ paid titles rank near the top 10. In the latest August figures Herald Sun came 18th, The Telegraph 19th, The Courier Mail 22nd, and The Australian 23rd, just one spot ahead of Seven’s new digital title The Nightly.
As a result, some argue that political influence has lessened, with Labor’s Daniel Andrews winning three Victorian elections despite heavy opposition from the Herald Sun, for example.
As the inaugural chair of News Corp Australia’s editorial board until 2023, Blunden was the most powerful local editor, the board serving as a way for him to exert control without a masthead directly reporting to him.
The restructure, enacted on July 1, is considered by some an unbundling of this digital strategy.
Since May, he has moved out of his 12th floor office in Melbourne, now occupied by Weir, who was appointed by Blunden in 2019, who also handed him his cadetship as a young aspiring journalist in Adelaide.
Weir was also handed Blunden’s executive control over the Weekly Times and Hobart Mercury, while English, buoyed by a close relationship with Lachlan, took on Blunden’s National reporting team.
Blunden was in New York at the time of the changes, and is said to have been blindsided after he was not consulted over the appointment of journalist Sarah Blake to lead the National team while it was still under his control. Several of Blunden senior reports were also removed or took redundancies.
He has since moved to an advisory role, remaining involved with racing and sport coverage. However, he steps back to three days a week next month, while mentoring some of the company’s Queensland-based editors and retaining his spot on the Herald and Weekly Times board, and as chair of News Corp’s Papua New Guinea operations.
The editorial board no longer meets, and has instead been rolled into the executive leadership team.
“We don’t comment on the makeup of our executive team, but editors do attend the executive meetings,” a News Corp spokesperson said.
This was the changing of the guard moment.
English told podcaster Mark Bouris this month he and Lachlan speak “a lot”, but that he doesn’t dictate what goes in the paper. Other senior figures say Lachlan is much more engaged locally, speaking regularly with his editors, in particular The Australian’s editor-in-chief Michelle Gunn, but rarely visits Holt Street, working US hours from a dark room in his home, sleeping during the day after taking his children to school.
Meanwhile, The Australian has all-but abandoned standalone sports coverage since the creation of the national sports team, taking copy produced by the tabloids’ sports reporters.
News Corp also launched CODE sports in late 2021 with the intention to find new revenue through a sports-only digital title in the mould of the globally successful The Athletic.
Hiring top talent from its competitors, CODE’s hyper-focused coverage behind a paywall led to initial growth according to staff present at the time, speaking on condition of anonymity.
Yet after a two-year turf war over content-sharing, CODE reporters bylines began appearing in the newspapers, with an edict to cut sports payroll across the tabloids part of the ongoing changes.
CODE’s founding editor Alex Brown quietly left in May, followed by award-winning writer Linda Pearce, and while digital head of sport Heath Kelly is now editing CODE, the team has been mostly absorbed into the national sports team, reporting to head of sport Jason Scott.
Big bets
The Australian was spared a redundancy round while its 60th anniversary bash remained on the calendar. But since then, a “slow drip” of cuts has resumed, with senior talent including The Australian’s foreign editor and 47-year company veteran James Morrison departing, alongside the recent exit of tabloid columnist Terry McCrann, hired personally by Rupert Murdoch from The Age in 1987 through a series of park bench meetings in Melbourne’s Treasury Gardens.
McCrann’s salary was initially external to the Melbourne Herald’s budget, and he was thought to have become News Corp’s highest-paid journalist in Australia. The timing of his departure, within a year of Rupert’s retirement, was no coincidence, according to senior and past editors.
And while those who remain bear the brunt of cost-saving initiatives and redundancies, the company has flushed away millions on major, failed projects.
While the CODE experiment has been scaled back, a short-lived investment in wagering firm Betr is said to have cost as much as $100 million, while Foxtel’s latest venture – its streaming TV box Hubbl, launched at a cost of $77 million, is also yet to deliver on its promise in a saturated market.
A senior News Corp editor labelled Hubbl as News Corp’s “Edsel moment” after a recent report in this masthead, a reference to a division Ford Motors folded just two years after its launch in 1960.
Leadership
With the editorial voice and management taking shape, the one leadership change pending at News Corp Australia is the executive chairman role, with long-standing speculation that Miller would be replaced by Sky News Australia boss Paul Whittaker.
While Miller is rated highly by Lachlan Murdoch, he does not have the history that ties the man known as “Boris” to the heir-apparent of the Murdoch empire.
Like many of the current crop, the foundation of their relationship dates back to Queensland in the ’90s. “I first worked together with Paul in Brisbane in 1994 when he was a determined young investigative journalist at The Courier Mail,” Murdoch told The Australian Financial Review in 2023.
“I was immediately impressed, and my estimation of him only grows.”
Whittaker and Sky News are in the process of moving to Holt Street, placing the former editor-in-chief of The Australian and The Daily Telegraph back in the corridors of power at News Corp.
However, according to some, after three-years and no action, that speculation appears to have settled down. And too, Whittaker may hold loftier ambitions to run the Murdoch’s crown jewel: Fox News.
Add to this, Miller will not be moved unless something opens up, one senior editor within the stable of News Corp’s Australian mastheads told this masthead. In both cases at News Corp, “you’re only backed as long as you don’t drop the ball”.
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