Fox Broadcasting Company
The Fox Television Network was launched amid the challenges, uncertainties and legal tussles that pervaded in 1985. The historical significance of this milestone event may be taken into its proper perspective if we take into account major issues during those times, and these include the man at the center of this milestone event, Rupert Murdoch, the Federal Communications Commission or FTC, the perceived indifference of existing players in the TV broadcasting arena, the economic climate during that time, the growing disenchantment of several affiliate broadcast stations and the volatility in the programming of TV networks.
Rupert Murdoch – The Man Behind Fox Broadcasting Company
Rupert Murdoch spent his early years in Australia. He has been described as an avowed advocate of free-market socialism with a hint of conservative leanings by Merrill, Lee and Friedlander. A person known for his secretive and reclusive trait, it has been said Murdoch is averse to engagements with other people especially with those who are connected with the government. This comes as no surprise as Murdoch has this penchant for unorthodox techniques that tend to be a bit too aggressive at times. Another reason cited by industry pundits is the extent of his media stake holdings, which span all four corners of the globe.
Out of the 150 magazines and newspapers where Murdoch has majority control, nearly half operate in Australia and 30 percent serve the UK market. In addition to his newspaper conglomerate, Murdoch also has majority stakes in cable and TV systems in the US as well as in major markets in Europe. And when it comes to significant relevance to his TV conglomerate, TV Guide, with a circulation that breaches the 40-million mark, is at the forefront among all his magazines.
Murdoch bought 50 percent of the controlling shares of 20th Century Fox in 1984. Immediately the following year, he went on to purchase the remaining shares to acquire full ownership and control of the corporation. This major buyout was worth $575 million and gave him access and control of a vast library of films as well as rights to several iconic TV shows like M*A*S*H and LA Law.
This diverse and vast programming put Murdoch in an enviable position to conquer the TV broadcasting scene, and this has led to the launching of the Fox Broadcasting Company. It was during the last quarter of 1985 when Murdoch took full ownership and control of six independent market stations, namely, KTTV-TV (Los Angeles), WNEW-TV (New York), WTTG-TV (Washington), WFLD-TV (Chicago), KRIV-TV (Houston) and KNBN-TV (Dallas).
Weathering the Challenges
The entry into the TV broadcasting scene by Fox Broadcasting Company could not have come at a worse time. Major economies were treading on dangerous grounds and revenue of network television was on a steady decline. Fox Broadcasting Company faced major challenges as it suffered an aggregate financial loss of $110 million in 1988 and 1989. To avert further erosion of its profit margin, the major players in the TV broadcast industry went on a diversification mode. TV networks implemented cost-cutting measures and adopted strategies that streamlined their business operations. And because of the economic uncertainties, affiliate relationships in the TV network were also strained. CBS, NBC and ABC lorded over the highly lucrative and powerful VHF stations in the US while the UHF stations became the monopoly of independent stations.
With the formal entry of Fox Network, several VHF stations that were originally affiliated with the other major TV networks decided to saddle up with Fox Broadcasting Company. This major development became leverage for Murdoch in gaining a stronghold of the current viewership. Some industry experts opined that the company’s exclusive contract with the NFL is the main reason for this major switch of a number of TV networks.
In one of these major switches, Fox Broadcasting Company was able to gain an additional 12 stations after New World ended its affiliate agreement with the other networks. The ease by which Murdoch was able to gain significant control of the TV broadcasting scene has sent shockwaves and affected the position and viability of established TV networks. Their over-reliance to the loyalty of affiliate networks has been their undoing.
