When New York City teetered on the brink of bankruptcy in the 1970s, "this city stayed solvent because your industry prepaid your real estate taxes," Murdoch said. He challenged the industry—which he said accounts for about half the city's $35-billion annual tax base—to use that clout to help bankroll candidates and wrest influence in Albany from the "public employee unions" that get lawmakers elected and re-elected in what many consider the nation's most dysfunctional state legislature.
On a more local level, Murdoch said that while he's a longtime admirer of city schools chancellor Joel Klein, the educational process here is still marred by too many "wasteful practices" that are unaffordable in a competitive world. "The real issue is not high costs but whether it provides high value," Murdoch said. Government, he opined, doesn't provide that degree of value.
The chairman and CEO of News Corp., whose properties include the Wall Street Journal, the New York Post and Fox News, didn't limit his scope to citywide or statewide politics. Turning to the race to either unseat or elect US Sen. Kirsten Gillibrand, "You may have thought you'd never hear me endorse a rival publisher, but I believe Mort Zuckerman would improve that race just by his entry," Murdoch said, referring to reports that the Boston Properties CEO and New York Daily News publisher was considering a run. "And if not Mort, then one of you."
Asked about his predictions for the US economy, Murdoch said he expects "very, very slow growth over a long period of time." The "uncertainty" over issues ranging from health care to taxes discourages the kind of small business growth that would accelerate the national recovery. "I have to be fairly pessimistic about that," Murdoch said.
Nonetheless, Murdoch predicted that the US will once again become the world's preeminent economy, although its rebound could take longer than people think. About New York City's place in the global picture, he was more sanguine: "New York is a very good bet to remain as financial capital of the world."
Newspapers have some of the same issues with the value of services as do cities, Murdoch said. By making their websites available to online users free of charge, "They're giving away their most valuable commodity, which is their content," he said. "That's no way to do business." In response to those who criticize Murdoch's decision to charge for access to the WSJ website, Murdoch said, "They're confusing cost with value."
He confirmed what has been widely rumored for several weeks: that the WSJ will launch a New York edition in April. "I challenge you to find a story about newspapers that isn't about reducing coverage," said Murdoch. "Here in New York, we're doing the opposite." Murdoch said that while he couldn't provide many details about the new section, "it will be full-color and it will be feisty." He added that it will offer coverage of city and state politics, business, sports and real estate to rival that of other dailies, including the Post. "We believe competition begins at home," Murdoch said.
Old-media though a newspaper may be, Murdoch said the new section would eventually be available for download via the iPad. "Within 12 months, there will be at least six to eight electronic devices on which you can receive newspapers as well as all other media," he predicted.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
