Rupert Murdoch is blaming the spending binge for the crisis, and warns that it will probably take some time until we emerge from it.

But the reality is that his News Corporation has been hit hard by the downturn. Already, News Corporation's digital arm Fox Interactive Media is axing jobs and many more are expected to go. Analysts have cut their earnings forecasts, warning that the company's profits this year could be halved.

And Pali Research warns that News Corporation might be in dire straits. "While we have long viewed Rupert Murdoch as the most visionary CEO in the media sector and one of the only CEOs willing to make long-term strategic investments (regardless of the near-term earnings impact or public investor views), we are increasing surprised/frustrated with his lack of strategic direction related to News Corp's television station, newspaper and book publishing assets...Therefore, we are concerned that the News Corp. growth story, propelled by cable networks and Sky Italia, will be far less exciting over the next few years, unless the global economy rapidly recovers and/or News Corp. begins to make the hard decisions to shutter businesses and/or innovate their way out of the downward spiral facing several of its key assets (TV, Newspapers and Books)."

The media generally is in bad shape. But News Corporation's problems could be a warning to the rest of the sector that things could get a lot worse.