Rupert Murdoch’s California media takeover explained

There’s an old rule in journalism: One occurrence is likely a fluke; two may be a coincidence. But three? Three’s a story.

So consider these three things that have happened in California this year. In January, Rupert Murdoch’s New York Post extended its tentacles westward, launching a tabloid (opens in new tab) in Los Angeles, the California Post. This month, a former Fox News host advanced to the general election for California governor. And last week, Murdoch’s Fox Corporation agreed to pay $22 billion (opens in new tab) for San Jose-based Roku, the streaming giant that controls the video traffic of 100 million households.

Taken together — a newspaper, a gubernatorial candidate, and a streaming platform — it begins to look like a certain 95-year-old Australian has set his sights on California.

To make sense of why California is getting Murdoch-ified, and why now, I invited Brian Stelter, CNN’s chief media analyst, lead author of the Reliable Sources newsletter (opens in new tab), and author of two books on the Murdoch empire, onto our weekly podcast “PST with Emily Dreyfuss.”

Watch video (opens in new tab) of our full conversation to see why Stelter says the Murdochs see California as frontier territory ready to take over, and why they are prepared to be very, very patient.

Here are some key takeaways from the discussion.

Emily Dreyfuss: Ever since the California Post launched in January, I’ve been dying to talk to you about what it all means. Then last week, Fox Corp made its bid for Roku, and I thought, OK, the Murdochification of California is truly on. It feels like there’s a Murdoch invasion happening on the West Coast. 

Brian Stelter: Invasion has certain connotations, that’s for sure. But the Murdochs, who have loved California personally for a long time, who have lived in California for much of their lives, now they want to have more of an impact politically. 

Is the Murdoch media empire’s power waning or growing?

I could make a strong case to you that its power is waning, that it is less powerful than it was 10 years ago. But I could make an even better case, a stronger case, that its power remains really, really significant and in some ways is growing. The moves we’re talking about today — the California Post and Roku — are really high-profile attempts to maintain and expand the company’s power.

Fox News is not growing its audience in a big way anymore. But it is still must-see TV in the White House. It is still Trump TV. It is still the most popular cable channel in America most nights. 

Here’s why I’d make the stronger counterargument: Who is President Trump wining and dining at the White House? It’s Rupert Murdoch — same as it was 10 years ago during Trump 1.0. The bottom line is we still see the Trump administration deeply valuing the Murdoch relationship, and that tells you a lot about who has the power. When it comes to the right-wing media, the Murdochs still have the power.

Why expand to California? What does the state represent to the Murdochs?

I’m picturing California the way folks living in the East pictured it, hearing about the Gold Rush or hearing about the Wild West, hearing about the opportunities on the West Coast — because of California’s frontier territory. It’s an opportunity for conquest. It’s an opportunity to convince millions of people who are not already in your camp that you’re right and that your politics are right — literally right.

You think about what the Fox News narrative is about California, or The Wall Street Journal opinion-page narrative. It’s that these boneheaded liberals just don’t know how bad they have it, don’t know how much better it can be, need to be helped along to find the truth, to find conservative values. It’s that idea that it’s an untapped market. It’s an opportunity to influence California politics, to pull California politics more to the middle, and then maybe someday to the right.

Is this really about politics, or is the California Post just chasing a media market?

It’s 1,000% about politics, just as much — or at least almost as much — as it is about a business opportunity.

Let’s take the business part first, because there is an interesting business argument. In California, they can reprint a lot of what’s in the New York Post. Some days I’ve noticed the California and New York Post headlines are the same. The front covers, the tabloid covers, are the same. On a slow news day, they’re not bothering to come up with a different cover. They’re basically making it a national paper. So there are obvious synergies.

But the more interesting, more important story is the political effort here. There is a political effort to use the California Post to influence California politics and to bring the Murdochs’ point of view into California in a way it never has before.

It’s fascinating to me, because Rupert is known for his vineyard in Bel Air. Famously, it’s where he helped get the Disney deal done, where he wooed Bob Iger over glasses of wine and figured out how to sell most of then-Fox Corporation over to Disney. That [vineyard] speaks to the Murdochs’ — I don’t know if the word is “love” for California — but appreciation for California, right? That recognition that it’s an incredible place to live. And yet, if you watch Fox News, you hear about the apocalypse. You hear about California dystopia.

What I don’t know — what none of us knows — is to what degree Rupert and Lachlan believe the Fox News and Journal narrative about California. How much do they actually think it’s true, versus how much do they know, based on their own time in the state, that it’s not true?

Is it working? The Post has only been here since January.

There’s not the tangible data that I can hold up and say, “Yes.” These things always launch with ridiculously big aspirations: In January, the publisher talked about “39 million people in the state, the fourth-largest economy in the world.” In reality, we can look at the traffic for the California Post, and it’s still very small.

But if the goal is politics, and the goal is to give conservative columnists a bigger platform, even if that audience is only 1 million people, that’s still significant. If the goal is to get Steve Hilton elected, then it’s gonna be a different yardstick.

The thing about the Murdochs is they are patient with these things. They will give it time to grow. They will put the New York Post behind it. So even if it’s not organically building up an audience, it is still visible, and it seems influential.

Let’s talk about Hilton — a Fox News personality who’s now the Republican candidate for governor. Is it fair to call him a Murdoch project, or is that unfair to a guy who just used to be on Fox?

I think it’s definitely fair to describe him as a Murdoch project. I just wouldn’t end the sentence that way. He was bequeathed a Fox News show in 2017. I did dig around and found out that, yes, there was a relationship with Rupert. Murdoch had clearly taken a liking to Steve Hilton. He was invested in Steve Hilton’s success. And that is oftentimes why these shows exist on Fox News for as many years as they do. Hilton was on for six years, then he left to lay the groundwork for this governor’s race. It was not an accident. It was partly a Murdoch project.

Do you expect Murdoch to put the power of his empire behind Hilton’s race?

I would say that he has, and he is, and he will continue to — partly just in the way Fox News and the other Fox outlets talk about California, partly through the editorial choices these brands make. That is helping out Hilton, isn’t it? Buttressing his candidacy, reinforcing his arguments.

I noticed a couple of years ago, Fox News added a late-night show out of California — an hour anchored by Trace Gallagher, who’s based in L.A. He’s focusing sometimes on California stories. He is pushing that narrative of liberal blue cities on the West Coast being out of control. There’s no escaping that storyline that Fox, and to some extent the other Murdoch brands, choose to emphasize.

The third leg of the stool is Roku — Fox Corp’s $22 billion offer for a platform that reaches 100 million homes. Roku isn’t one channel; it’s a hub for all of them. Is the point to control that homepage, so what I’m shown takes on a right-wing bent?

I think it’s a genuine question and concern, but it’s one of those impossible-to-answer questions at the moment. The deal’s gotta go through — it most likely will. So far, what we’ve heard from Fox Corp is that they’re going to keep their own streaming service, Tubi, separate from Roku. But you’ve got to imagine that over time, yes, the Murdochs are going to want to use Roku as their homepage for all things within their media company, within their empire. It’s only natural. It’s what you would expect.

That is why this deal has raised eyebrows quite a bit, and not just in liberal circles. It’s definitely the biggest bet Lachlan Murdoch has made. But I’d point out that the power of Roku will degrade if Fox is too heavy-handed. If I can’t easily get to HBO Max because Fox is getting in the way, then I’m probably gonna have to buy a different streaming stick.

Do you think the Murdochs will succeed in California? What are you watching for?

What does success mean? We’ve established it can mean many different things to the Murdochs in California. But it is apparent to me that political influence is really what they’re pursuing. That comes down to demographic change and voter behavior in California — how many people are persuadable by what the Murdochs and their outlets are saying.

I want to see how big the California Post can get, and whether it has political wins it can put on the board. They endorsed Steve Hilton; now we go forward with the governor’s race. Will they be able to point to tangible victories, political or otherwise, in the state? What’s Fox News going to be saying on midterm election night, and in the days after, this November? What’s the narrative going to be from the Murdoch outlets this fall, this winter? I think a lot of people are concerned about what President Trump and his allies might say about vote rigging. We’ve already seen a lot of that this spring.

I’ve always thought about California as a preview of the future, a representation of the future, showing the rest of the country where it’s going. So it’s no wonder the Murdochs want to be a part of that. It’s no wonder they want to be more influential in California, of all places.