Why News Corp.'s $1 Million Gift to Republicans Is No Big Deal

How upset should you be about News Corp.'s (NWS) $1 million donation to the Republican Governors Association? That depends. How upset were you in 2002 when the media conglomerate gave $25,000 to the Democratic Senatorial Campaign Committee? Did you scream and shout when it donated the same amount to the Republican National Committee in 1999? If not, you probably you should calm down and take a breath.

Of course, it looks terrible when a company that controls the country's biggest newspaper and its most-watched all-news network drops a huge wad of cash in the lap of one political party. It seems to vindicate all the critics who say Fox News's "Fair and Balanced" slogan is nothing but a cynical joke and who cite evidence of bias seeping into The Wall Street Journal's news pages.

Forget-Me-Not Palm-Greasing

But News Corp. -- like CBS (CBS), and NBC parent General Electric (GE), and ABC parent Disney (DIS), has always given money to campaigns and candidates. Mostly, these donations have been small and more or less evenly distributed along partisan lines. (In fact, the Washington Post reports that 56% of the money handed out so far by the News Corp./Fox PAC has gone to Democrats.) It's the sort of routine, forget-me-not palm-greasing that practically every big corporation does to ensure its lobbyists get their calls returned.

It may be repulsive, but it's legal and widespread.

So the offense here would seem to be not that News Corp. gave any money at all, but that they broke an unwritten rule against giving in a way that might actually affect the outcome of a race. It's perfectly alright to purchase access and influence; it's not OK to spend to achieve results.

That's clearly an absurd and untenable position. News Corp. Chairman Rupert Murdoch has always felt free to ignore strictures he considered silly, from the editorial independence agreement governing his takeover of the Journalto federal regulations limiting ownership of media outlets. It was only a matter of time before he swatted aside this particular taboo.

It's All About Self-Interest

As for the claim that it discredits all the reporting done by News Corp.'s news outlets, Murdoch has never kept his personal politics a secret. Anyone who thought the way to get ahead was by toeing the boss's editorial line has always known which direction that line points. This does nothing to change that.

But that's not to say no one has the right to feel aggrieved about News Corp.'s largesse. The company's official explanation for its donation is that the RGA's "pro-business agenda," including its emphasis on low taxes, "support[s] our priorities at this most critical time for our economy."

In other words, News Corp. was only looking out for its business interests. It's up to shareholders to decide whether this use of company resources was an efficient way of doing that, or whether Murdoch merely spent their money to gratify his personal desire to see Republicans elected.