“Power replaces power with itself. You can either stand on the other side of the window, tap, tap, tap, asking to come in. Or you can establish a new line of ascension.”
So says a young Rupert Murdoch to his first editor Larry Lamb in “Ink,” a new play about the early days of Murdoch’s mighty tabloid, The Sun. The Aussie media mogul was certainly no fan of the tap-and-ask approach; he built his $60 billion-plus empire through a devotion to amassing control over distribution channels. Tabloids, television stations, they all bent to his will. “More than being about cost,” Michael Wolff wrote in Vanity Fair, “his strategy is about pain. What he is always doing is demonstrating a level of strength and will and resolve against which the other guys, the weaker guys, cower.”
In 2014, Murdoch found a new target: The $15 billion market for real estate agent advertising. His News Corp. picked up Realtor.com parent Move Inc. for $950 million, with the goal of creating the same kind of all-encompassing network that it had been able do build so effectively in its other ventures. But the entrant of a player like Murdoch sparked a fair bit of anxiety among its millions of agent users. One rival who didn’t mind stoking that anxiety: Spencer Rascoff, CEO of Zillow and overlord of StreetEasy.
“I think the real estate industry will now realize that it’s rupert.com,” Rascoff told Jim Cramer at the time. “And that makes them more likely to want to partner directly with Zillow, based on the size of our traffic and our business model.”
Murdoch rubbished Rascoff’s claim – “what the hell does Zillow mean?” he remarked at Inman Connect, saying News Corp. was focused on bettering his product, and marketing it aggressively through agent outreach, advertising, and referrals from News Corp.’s mammoth network of media properties.
(Spencer also told Cramer that Zillow had considered buying Realtor.com but opted to acquire Trulia instead, which he said had “ascendancy” and was not “a struggling brand.”)
Until now, New York has seen mostly skirmishes between the two giants, but that’s set to change, as my colleague E.B. Solomont reports in a new cover story. ComScore data shows Realtor.com’s traffic jumped 12 percent year-over-year, and it’s also been able to take advantage of a stalemate between StreetEasy and the city’s major brokerages. In August, Realtor.com said it would take REBNY’s syndicated listings feed, giving it 16,000 listings that could help it bring over more consumers to its platform. Zillow and StreetEasy are, as of now, still refusing to accept the feed.
“StreetEasy’s dominance,” REBNY president John Banks told me, is “only going to undergo some change as the competitive forces start to work themselves out.”
“Our goal is to grow as rapidly as possible; there’s no limit,” News Corp. CEO Robert Thomson told Solomont, adding that his firm would be willing to spend whatever it takes to be the market leader in New York and the U.S. “There’s no specific limit,” he said, “in part because we genuinely believe the potential is immense.” It’s been nearly 50 years since Murdoch bought The Sun, but he remains obsessed with this approach. Window tapping is for chumps.
Homicide on the job: A dismissal, and then, a murder. In among the most gruesome stories to ever hit New York real estate, a disgruntled construction worker who was fired from the Waterline Square condominium project returned to the site two days later and fatally shot his former supervisor before turning the gun on himself. Read how the tragedy unfolded here.
No news at Woolworth Tower is not good news: My colleague Miriam Hall took an in-depth look at the feeling of blah surrounding the Woolworth Tower, which Ken Horn’s Alchemy Properties is converting into high-end condominiums. On a trip down to the AG’s office in 2014, I discovered that the project intended to offer up a $110 million penthouse. Three years later, that did in fact happen, but brokers well-versed in the area say the pricing is the very definition of aspirational. And, more worryingly, there’s been very little excitement about the project in general. Read Hall’s report here.
Riker’s Island’s latest tenant: It’s slammer time for Steve Croman. The landlord was sentenced to a year in jail at Rikers Island on Tuesday, after reaching a plea deal on criminal mortgage and tax fraud charges. According to his attorney, Benjamin Brafman (who has represented pharma bro Martin Shkreli and irreverent painter/developer Sean Ludwick), Croman is likely to be out in eight months.
When sentencing Croman, Judge Jill Konsiver asked him to reflect upon his alleged misdeeds with tenants. “I hope you spend your days thinking of those you’ve harmed,” she said. “I wish you luck, sir.”
And Konsiver also warned Croman, who is known for his lavish parties in the Hamptons and high-flying ways, that prison wouldn’t be a lark.
“Let’s be clear,” she said. “Rikers Island ain’t the Ritz.”
(Paydirt is a weekly column that riffs on the biggest NYC real estate news of the moment, providing analysis and historical context on the deals and players that make this town tick. Read more from Paydirt here.)