TIME: Almanac 1995

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<text id=93TT0828> <title> Sep. 20, 1993: Rupert's World </title> <history> TIME--The Weekly Newsmagazine--1993 Sep. 20, 1993 Clinton's Health Plan </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 64 Rupert's World </hdr> <body> A burst of deals puts Rupert Murdoch in the forefront of media moguls seeking global reach By JOHN GREENWALD--With reporting by Helen Gibson/London, Jeffrey Ressner/Los Angeles and Frederick Ungeheuer/New York As he settles into an easy chair in his offices on the 20th Century Fox film lot, a genial Rupert Murdoch has plenty on his mind. Not only has he unveiled a dazzling array of media deals in recent weeks, but his daughter Elisabeth is to be married the following day. "It's the main item of business these days around my house," he says. Perhaps so, but it's clear that Murdoch has been devoting great gobs of time to business marriages as well. Just two years after he was nearly buried beneath a mountain of debt, Murdoch, 62, is expanding his global empire more rapidly and restlessly than ever before. For starters, he paid $525 million in July for 63.6% of Hong Kong-based star tv and its potential to reach 3 billion viewers from Tokyo to Tel Aviv. This month Murdoch upgraded his 50%-owned British Sky Broadcasting (BSkyB) from six channels to 14, and agreed to acquire Delphi Internet Service, a Massachusetts-based computer network whose gateway to the worldwide Internet system provides access to 20 million computer users. Such deals, though substantial, barely hint at the ultimate scope of Murdoch's latest thrust: to cover the earth with his own digital superhighway. To increase his market penetration, the media baron is developing a digital compression system to enable TV satellites to beam down 180 channels, thereby allowing most of the world to watch everything from news and sports to such Fox shows as The Simpsons and Beverly Hills 90210. As the capstone of these Napoleonic visions, Murdoch and British Telecommunications, which operates Britain's largest phone system, are developing interactive links that will let viewers call up movies and other forms of entertainment and information on demand. "Murdoch now has a better global position than anyone else," says John Reidy, who follows the media industry for the investment firm Smith, Barney. "He has a lot of pieces of the puzzle, but we do not know how it's going to play out." The burst of activity makes Murdoch a formidable force in the fast-evolving world of media alliances and the race to develop an electronic superhighway into the home. It pits the Australian-born mogul and his partners against such giants as Time Warner, AT&T and cable-firm Viacom International, which are rushing to build interactive systems of their own. At the same time, the star tv and BSkyB deals enable Murdoch to bestride the television world. When asked whether he intends to build a global TV network, Murdoch booms out, "Oh, absolutely!" Such a network and its affiliated stations would provide a worldwide outlet for Murdoch's Fox Broadcasting television programs and his 20th Century Fox films, which include a library of more than 2,000 titles ranging from All About Eve and Gentlemen Prefer Blondes to the Star Wars trilogy and Home Alone. The satellite system would also help Murdoch, whose Fox Network is planning to launch a hip cable channel called FX next year, muscle his way into what he sees as the entrenched world of American cable TV, dominated by operators like Denver-based Tele-Communications Inc. and Time Warner, whose magazine and book division publishes TIME. He could offer such firms slots on star tv or BSkyB, for example, in exchange for carrying his new cable channel. "That's how this world lives," Murdoch says. "The big people who have access to 2, 3, 4, 8 million homes are all playing leverage against each other." Murdoch, who built his News Corp. empire on sensation-mongering tabloids, still loves to exert leverage and shake things up. In Britain earlier this month, critics charged that his cuts in the newsstand price of the staid London Times and the tabloid Sun were predatory moves to drive rivals out of business, which he denies. In New York City, angry employees threatened to shut down the bankrupt Post, which Murdoch owned from 1976 to 1988 and began running again last April in preparation for repurchasing it and rescuing it from collapse. The employee threat was prompted by management demands for the right to ban strikes and fire employees at will during the next four months. As the '90s began, it was Murdoch's ventures themselves that seemed shaken up. After a rash of acquisitions ranging from TV stations and printing presses to TV Guide magazine, News Corp. found itself with $9.5 billion of high-interest debt. That burden, compounded by a worldwide economic downturn, dealt the company a $308 million loss in 1991. To pare down the debt, Murdoch sold $1.2 billion of stock and spun off such assets as the Daily Racing Form, Seventeen and New York magazine. The moves still left News Corp. with $7.5 billion in IOUs but helped it record a profit of $605.2 million, on revenues of $7.48 billion, for its latest fiscal year. No sooner did Murdoch lighten his debt load than he began running again. The acquisition of STAR TV, which can reach an Asian audience of 13 million, potentially brings two-thirds of mankind within his direct-to-the-home satellite grasp. To help finance the deal, Murdoch is selling his 50% stake in Hong Kong's South China Morning Post, one of the world's most profitable papers. Murdoch is taking another leap in the dark with his acquisition of Delphi, whose 50,000 subscribers make it the smallest of the five leading U.S. providers of online services to households. Among other things, Murdoch wants to offer an electronic newspaper "where you'll be able to pull up something on a screen that looks like the front page of a paper"--a longtime goal of the online industry. At the same time, technological advances could permit Delphi to transmit video images and voices into the vast Internet system. Nowhere is Murdoch rushing ahead more rapidly than in Europe, where his expansion of BSkyB is part of a slew of new ventures. Partners include Britain's National Transcommunication Ltd., a research facility that will help him develop video compression, and Cellnet, a cellular-phone firm that will team up with British Telecom to work on Murdoch's electronic superhighway. At the same time, Murdoch is joining forces with German TV broadcaster PRO 7 to provide and manage satellite channels reaching 100 million potential viewers in Germany, Austria and Switzerland, starting next January. Murdoch's burgeoning media power has been setting off political alarms. In Britain, where, in addition to his TV interests, Murdoch controls one-third of the circulation of the country's national daily newspapers, critics complain that his voice threatens to drown out all others. "It's not healthy for democracy, and it's not healthy for competition," says Robin Cook, a Labour Party spokesman. But in nondemocratic Asia, some experts draw the opposite conclusion about the acquisition of STAR TV. "This has considerable political, social and cultural implications," says Anne Thompson, a media analyst for Mees Pierson Securities in Hong Kong. "Repressive governments can't control information, can't control what people see." In Marshall McLuhan's vision of the global village, media like television and radio are a form of message as well. Yet today technology is uniting the functions of TVs, phone systems and computers, since digitized data streams can provide voice and image messages to them all. Murdoch thus plans to focus on proprietary entertainment and information, rather than on building delivery systems that could become outdated fast. "We see ourselves absolutely as creators of software, making and packaging entertainment," he says. "And the same holds true for news...Satellites are just part of it--they're what's there now. But who knows? Another technology could come along and blow satellites and cable away." Murdoch now plans to quit the acquisition game for awhile. "There's really no company that I want to buy that I can see out there," he says. "Quite honestly, we're not negotiating." He also needed time to get ready for his daughter's wedding, which took place last Friday night. MURDOCH'S RECENT MEDIA MOVES STAR TV Paid $525 million for the world's only pan-Asian TV service BRITISH SKY BROADCASTING Expanded his satellite-TV service beamed out of Europe DELPHI INTERNET SERVICES Acquired on-line network with access to world-wide Internet BRITISH TELECOM Jointly developing an electronic superhighway into the home SOUTH CHINA MORNING POST Selling stake in profitable paper to help pay for STAR TV "Can we own it all? No you can't do that. Can we own all the software? No, but you can own some key pieces of it." </body> </article> </text>