STARING CONTEST

Posted in Rants on December 29th, 2009 by Ed

The key to anything financial – investing, opening a business, playing blackjack in Vegas – is to determine in advance exactly how much money one is willing to lose and adhering to that decision fastidiously. This wisdom is accepted across all ideologies. It is important because pride takes over once failure sets in, and individuals are apt to hold out hope for a successful turnaround well past the point of reason. You've seen people in casinos pour more and more money into "turning around" a bad night and recouping losses. We've seen successful businesspeople open a new retail outlet or create a new brand that fails; unwilling to wear the shame of failure they pour resources into it until, inevitably, the entire business empire collapses. You've seen investors (or perhaps you were that investor) ride a stock down to zero while desperately insisting that a turnaround is imminent. Without limiting your losses, they tend to be…well, unlimited.

So…about Fox Business Network. On one hand you have to be impressed with Rupert Murdoch's sheer willingness to shovel good money after bad. On the other we have to start questioning the one part of his persona that has heretofore been unquestioned – his business acumen. Say what we will about the man, he is a businessman and he knows how to make money (mostly by identifying the lowest common denominator, undercutting it by 50%, and making it louder). Until now, that is. Because FBN can't possibly be making enough money to pay my rent let alone its overhead.

How bad is it? Well…

True story: 2009 was a terrific year for ginandtacos.com. I started the year happily averaging 800-1000 hits daily and ended it close to 3500. Or as I prefer to call it, 10% of the daily nationwide audience of Fox Business Network. Seriously. They are averaging fewer than the 35,000 daily viewers necessary to be included in Nielsen ratings. So a network owned by one of the world's most powerful media entities, with daily operating costs that surely run to tens of thousands of dollars if not more, is achieving a grand total of ten times – at most – the audience of gin-and-frickin'-tacos. Total operating cost: $9 month. Eat it, Rupert.

It turns out that people interested in financial media are out to make money, not to hear cheerleading for a single ideological viewpoint. They want to know how to make a buck off Obama & Co., not to hear extended harangues about why everything he does is Evil. And I don't think the people in charge have the slightest idea of how little the intended audience wants to hear financial advice from idiots like S.E. Cupp, Sean Hannity, Jenna Lee, and Neil Cavuto. Their lineup makes Jim Cramer look like Keynes and Megan McArdle look like…someone who should probably be on FBN.

Is it going to drag down the entire NewsCorp empire? Doubtful. Its interests are diverse and many of them are very profitable. But at this point FBN is little more than an a vanity press for Murdoch. It is an expensive hobby, the kind into which we pour vast sums of money simply because we enjoy it, not because it makes any financial sense to do so. Most old white guys golf, buy Porsches, or collect rare something-or-others. Either FBN is Murdoch's version of a stamp collection or the amount of money he is comfortable losing on this "investment" was not determined in advance, hence we are watching pride and stubbornness take over.

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