Consider two very well-known global nonagenarian businessmen with enormous reputations — so much so that their surnames, Buffett and Murdoch, are headlines on their own.
After turning 92 in March, Rupert Murdoch has announced he is shifting to a “chairman emeritus” role in a far-away corner suite — retiring while still full of anger, flailing in his resignation letter at perceived “elites”, forgetting that he has been a member of the most elitist of all elites: the global billionaire class.
Then there’s Warren Buffett, 93 as of August, also a global billionaire, without concern about elites, and still overseeing the most followed company in the world by investors, Berkshire Hathaway, with a market value at Thursday’s close of just over US$792 billion (more than A$1.2 trillion).
Compare that to the tiddlers in the Murdoch empire: Fox Corp (valued at US$15.14 billion) and News Corp (the foundation company, valued at US$11.52 billion). That’s a combined total value of US$26.66 billion (A$41.6 billion).
According to US data companies, Berkshire’s shares have risen monstrously in its 70 or so years of life controlled by Buffett. Some of his original partners in his first investment groups are billionaires many times over after they stayed with him through thick and thin.
News Corp shares are up 30% since its 2013 split that separated the empire. Fox Corp, the new version of the 21st Century Fox company, was created in that split. Fox shares have fallen 23% since it was created in 2019.
The value of the Murdoch companies is not insubstantial. And because it’s a media group — and Murdoch has always been a very “political” person, seemingly more interested in power than in creating investor value — his views have always seemed more important than they really were.
He has never been afraid to use his media position and outlets to wield power, through Fox News and The Wall Street Journal in the US, The Australian and his tabloid papers in Australia, and Sky News, The Sun, The Times and The Sunday Times in the UK.
Rupert, the son of Australian war correspondent and media manager Keith, has seemed to be driven by the desire to re-establish the media empire that his father built. Buffett, on the other hand, started as the son of a former Republican US congressman, so had a better understanding of the vagaries of politics. Buffett is a Democrat — a very different political stance in the US to Murdoch.
Murdoch and his family have been paid hundreds of millions of dollars over the years by News Ltd, News Corp and now Fox and News. Buffett is paid a pittance in contrast — US$100,000 a year for 40 years. There are extra payments for security, transport, etc.
Buffett has lived in Omaha Nebraska in the same house for decades. Murdoch has had homes, houses, and flats in Australia, the UK and the US (especially in New York and LA). And as business people, Buffett and Murdoch have very different track records. Apart from his company’s huge US$350 billion investment portfolio, Buffett and Berkshire are value investors with an extremely long time frame.
Buffett, in fact, was a long-time believer in the media and especially newspapers (being a former delivery boy). He owned The Buffalo News in upstate New York for decades and was the biggest investor and supporter of Katharine Graham at The Washington Post. He supported her until she died in 2001 and was a shareholder when Amazon founder Jeff Bezos bought the company in 2013.
He invested in the ABC Capital Cities TV network and owned a string of local papers across the US midwest and south, but sold the last of his newspaper investments in 2020. Buffett and Berkshire dominate US business and investment like no other — they are the biggest single shareholders in Apple, Bank of America, Coca-Cola, American Express and the world’s largest group of insurance and reinsurance companies.
Murdoch, however, took the view that with the media came power — and he has been unable to turn that into business success over time. His papers have shed readers while his broadcast media have lost viewers and subscribers. These days the big drivers of Murdoch revenue and earnings are real estate listings companies in Australia and the US, and business data in the US and globally.
News Corp dominates the print and subscription TV businesses in Australia, and the Fox News Channel is the major right-wing media outlet in America, but they do not generate the sorts of returns Buffett has been producing for years from ordinary and at times unfashionable businesses.
Some of the Murdoch family fortune is tied up in Disney shares, held in the Murdoch family trust, which have lost nearly 30% in value in the past five years (since the deal with 21st Century Fox). At various times, Murdoch has owned shareholdings in the Ten Network and Ansett.
But the most telling difference between the still-angry Murdoch and the calmer-than-calm Buffett has been their charity. Since 2006, Buffett has given away shares in his company (from his own shareholding) to various charities valued at US$56 billion. That value is more than he was worth back in 2006. As of this week, he was worth US$124 billion.
And Rupert Murdoch? We have no idea. He is worried about succession, which he has now secured, and the family fortune is locked up in the family trust located in a lawyer’s office in Reno, Nevada, the US state with the highest level of legal financial secretiveness — a bit like Switzerland was for decades.
That trust controls both companies through a dominant position in the voting shares issued by both (Berkshire also has voting and non-voting shares). The value of the fully diluted 14% (including the non-voting and voting shares) is around US$4 billion at best.
In terms of the investment markets, it’s no contest really. Warren Buffett by every measure over Rupert Murdoch.
