The New York Post produced an
interesting editorial two weeks ago ripping into the unions and
do-gooders who have kept the world’s biggest retailer, Wal-Mart, out of
New York City.
However, poor old Wal-Mart will need more than
support from one of its biggest commercial partners, News Corporation,
to offset the rising tide of community unrest that will culminate with
the launch of Robert Greenwald’s $US1.6 million documentary, Wal-Mart: The High Cost of Low Price
in New York on November 13. Wal-Mart shares have fallen by more than
20% this year and rising community opposition is partly to blame. A company PR counter-attack has been launched this week.
This piece in The Miami Herald
provides a nice scene-setter for the battle that lies ahead and
certainly elevates Greenwald as a figure competing with Mike Moore for
anti-Bush propaganda power. After all, Greenwald’s Out-Foxed has now sold 200,000 copies – which might explain Rupert’s ferocious New York Post editorial.
Another explanation is the recent appointment of Paul Carlucci as the
new publisher of the paper, replacing Rupert who briefly replaced
Lachlan Murdoch after he resigned his executive positions three months
ago. To understand the News Corp culture and Carlucci in particular,
check out parts of
this tough piece that Forbes magazine ran in its October 31 edition:
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Paul V Carlucci takes no prisoners. The head of a marketing
division of Rupert Murdoch’s News Corporation, Carlucci once rallied
his sales force by showing a film clip from The Untouchables in which Al Capone beats a man to death with a baseball bat.
The approach has helped make Carlucci’s News America Marketing powerful
and feared in the business of in-store and coupon marketing. It’s
a low profile but highly profitable enterprise which pulled in $US1.1
billion in sales, up 9%, for the year. It’s profit margin before
interest and tax: 28%.
“News America is to in-store media what Wal-Mart is to retailing,” says Kenneth Harris of WPP.
But some News America rivals its success comes at their expense – and
by dint of dirty tricks. Floorgraphics of Princeton claims in a law
suit filed in the federal court in New Jersey in October 2004 that News
America offered to pay retailers not to do business with Floorgraphics.
What’s more, Floorgraphics says News America infiltrated its
password-protected computer system to acquire information on contracts
But Murdoch’s company is also under fire for the way it maintains its
edge in the newspaper-insert business. A California jury recently found
News America, which distributes SmartSource, a freestanding
coupon circular that reaches 70 households every week through 1,200
Sunday newspapers, guilty of violating anti-trust and
unfair-competition laws. The jury awarded privately Theme Promotions, a
company with $US10 million in 2004 sales, $US7 million in damages this
There may be more trouble ahead. Valassis Communications, a publicly
held newspaper-insert company has said that the Federal Trade
Commission was conducting an investigation to determine whether
Valassis tried to fix prices by soliciting an agreement with a
competitor Valassis didn’t name. Valassis and News America control
almost all of the coupon-insert market. News America says it isn’t
Given that Wal-Mart sell more News Corp DVDs than anyone else in the
world and the two companies have a big relationship through in-store
advertising, The New York Post’s editorial position is hardly surprising, especially given the corporate thug who now publishes the paper.