Cage Match: Heads of Industry


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The Wall Street Journal
Page A1
By Steve Liesman
June 6, 2023

 


Things looked so different 20 years ago.
The year is 2003, the month is June, and Matt Taibbi–a little-known columnist for a doomed New York weekly called New York Press–is upset. The Federal Communications Commission (FCC) has handed down an historic 3-2 decision that paves the way for what the upstart reporter perceives to be the monopolization of nearly all the country’s media.

The FCC decision eased old restrictions that prevented major corporations from owning television stations and daily newspapers in the same markets. It also raised the limit of maximum household access by television broadcasters to 45 percent, making it possible for large media conglomerates to dream of a day when control over public information would be confined to just a few powerful insiders.


To Taibbi, a self-described "typical alternative media malcontent," the decision spells the beginning of the end of what was to be a spectacularly mediocre career.


Little does he realize that the decision has set into motion a series of events that would land him, twenty years later, in control of a single television station that would make a mockery of the old Nielsen ratings system, frequently attracting the attention of up to 97 percent of America’s viewing households.


According to Taibbi, the story of the Guillotine Channel begins just one week after the FCC decision. He was attending a Nets-Spurs NBA final match-up with NBC reporter Mike Taibbi–the man he believed at the time to be his father.


"It was in the second quarter, and I knew something was wrong, because Mike’s head really wasn’t in the game," Taibbi, now 53, recalls. "I was on my way to get some nachos when he told me to sit back down. ‘Matt,’ he said, ‘I have something to tell you. I’m not your real father.’


"I was stunned. I looked at him, and I was like, ‘What?’ And he said, ‘Look, I’m sorry. And the truth is, I don’t even like basketball.’ Then he shook his head, got up, and just left me there. That was the longest game I’d ever seen."


Taibbi shakes his head. "I don’t even remember who won."


Soon after, following a lengthy investigation of adoption records, Taibbi made the explosive discovery that his birth father was none other than Fox Chairman Rupert Murdoch. His mother? Imelda Marcos. According to Taibbi, the two had dabbled in Satanism together in the late 60s, resulting in a secret pregnancy and a hushed-up birth.


Following the revelation, the younger Taibbi suffered a complete nervous breakdown and remained institutionalized for much of the next six years, drifting in and out of catatonia and fugue states while physicians struggled for a cure.


The rest, as they say, is history. Taibbi eventually gained the strength he needed to confront Murdoch, and–to the surprise of everyone–he was ultimately accepted into the Murdoch family. The media giant grew close to his estranged son in his final years of failing health, when the latter tended to Murdoch.


"We played this game called ‘Hide the oxygen,’" recalls Taibbi. "Dad would give me this plaintive look from his bed, and that would be my signal to rip off his mask and hide the tank. Then I’d hide somewhere in the penthouse and wait for him to find the buzzer to call the butler. When it was all over, I’d hug him. It was wonderful."


In his last days, Murdoch changed the succession of his company fortune, thrusting the older Taibbi ahead of the previously anointed heir, Lachlan Murdoch. In 2013, Taibbi assumed full control of News Corp, which then reached some 68 percent of American households.


The shake-up sent shock waves through the industry. Advertisers responded diffidently to Taibbi’s Nero-esque early programming decisions, which, as most citizens will recall, included the use of his news networks to promote a failed presidential bid by a police horse as well as the reality show, Survivor: AIDS. In response, industry insiders quickly circled the wagons, pressuring banks to call in News Corp loans and influence Washington to recall News Corp satellite licenses. The word was out in the boardrooms of America: Taibbi had to go.


It was then that Taibbi hit upon the masterstroke of his career, engineering an escape from his predicament that would leave him the most powerful man in America for a generation to come.


He negotiated an unusual buyout with his competitors: In exchange for his complete interests in News Corp, Taibbi asked for an apparent pittance.


"I asked for a single cable channel with a permanent license, one million dollars, a staff of ten and an old Buick Electra," he recalls, grinning. "Plus a little paperwork."


The "paperwork" was a buyout contract to be signed by each and every one of the employees of News Corp, General Electric, Viacom, Disney, Time/Warner, Paramount and the New York Times company. Buried in the contract was a small clause that made each employee pledge "full and enthusiastic" cooperation in any future reality programming Taibbi might launch.


"He had every single media employee in the country crowd into an airplane hangar in St. Louis to sign the contract," recalls FAIR founder and media critic Jeff Cohen. "It took weeks."


With the signatures collected, Taibbi launched the Guillotine Channel. For the premiere, Taibbi assigned ten crack Russian mobster employees to arrest Fox News chief Roger Ailes, drive him to the TGC studios in Burbank and, using a restored 18th-century French guillotine, chop off his head on live television. The privilege of releasing the rope was awarded to an Hispanic single mother in Los Angeles, whose application was chosen via a televised lottery. Due to the buyout contract, the entire arrangement was completely legal.


The channel was an overnight success. Advance response for the second televised event was so enormous that Taibbi arranged to have the beheading of aging talk-show legend Bill O’Reilly aired on a pay-per-view basis. Some 165 million Americans paid $119 to watch the historic broadcast, which featured uproarious live commentary by prisoners at the supermax prison facility in Wallens Ridge, VA.


Subsequent programming innovations increased ratings still further. "I’m not sure who came up with the idea of dressing up the victims in French aristocratic costumes, but that was clearly a key element of our early success," Taibbi says now.


"The sight of Michael Eisner wearing that wig and that pancake makeup, being dragged to the stage in a silver brocade waistcoat… That was clearly a landmark moment in the history of American television. I usually let the viewers do the work, but for that one, I got to apply the mole."


Today, the Guillotine Channel is by far the most popular network on television, and plans are underway to launch a series of spin-off channels, including Guillotine 2 and Guillotine Family. In the last quarter, profits of TGC corporation were estimated at $4 billion a day.


Industry insiders are quick to note the irony of its success.


"The argument for deregulation 20 years ago was that, regardless of access, the networks still had to attract viewers," says Ari Glomberg of the American Enterprise Institute. "The idea was that the preferences of the viewing public would act as the natural check on the power of the media companies, instead of government regulation."


Glomberg laughs. "The companies never foresaw that their behavior would make America hate them so much that something like Guillotine could come along and wipe them out with a single frequency. It turns out the market really does work."


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