News: Analysis & Commentary: MAGNATES
`I DON'T WANT TO KEEP BETTING THE COMPANY'
On May 15, Rupert Murdoch spoke with Los Angeles Bureau Chief Ronald Grover and Associate Editor Michael Oneal in his Los Angeles office.
Q: Why did MCI come to you?
A: They've been getting into online services and software. They thought they had to make a major alliance. I think what attracted them was our global nature and obvious global ambitions.
Q: The investment gives you money to make acquisitions, doesn't it?
A: We've got about $3 billion that we won't be touching. We'll add this money to that until we buy something. What might we buy? I don't know. I made a joke about CNN just to annoy Ted [Turner] the other day. He gets a bit excited at times. As for the joint venture, we certainly intend it to be an acquisition vehicle. We'd love to--and I can say this because they're not for sale--I think we'd love to have bought [Hughes Aircraft Co.'s] Direct Television. We will [invest in] the media business. It won't be a steel mill.
Q: Are you interested in buying Seagram's stake in Time Warner? Or Time Warner's stake in Turner?
A: No. The [Seagram] stake, I don't see what you do with it except hit your head against a brick wall. Time Warner's stake in Ted--they're talking about selling it at a great premium, and all it carries is a blocking veto. It doesn't give you an active role in what goes on there.
Q: How big a bet will you put on interactive media?
A: I think it will happen. I'm just very cautious about when. Maybe I'm too old to get it. But if you look at all the tests about interactivity with, say, movies on demand, it suggests that the average home will buy movies by pushing a button. That's not something that changes the world. It's proving more difficult and more expensive, and you have to start with what people will pay for. They'll pay for electronic games.
Q: How likely is it that you'll buy Fininvest?
A: Probably about 30%. We're taking a serious look at it, with Fininvest's cooperation. That will go on for three or four more weeks.
Q: If you buy Fininvest, you're likely to face government scrutiny in Italy, as you did here. Is there something about Rupert Murdoch that scares people?
A: I haven't had so much opposition in Washington, really. Governments love to regulate, and they love to interfere with media. They see concentration, but we've been a catalyst at all times for competition. The fact is, with digital technology, it's going to be easy to enter [a market], because no one's going to [have] a monopoly.
Q: Don't you have a virtual monopoly with British Sky Broadcasting?
A: Being first helps. What's wrong with that? I mean, why didn't someone else do it? We didn't commit any sin. And others can certainly come in after us.
Q: Is your view of risk-taking different from that
A: I don't worry so much about quarterly results. I guess by now I've got a sense of security about taking the long-term view and knowing that the assets will still be there in two years--even if media analysts take different views. We've taken some gambles others might not have. But I don't want to keep betting the company. I'm certainly not going to bet the company again. And I don't believe that we did bet the company.
Q: Do you feel vindicated after your debt scare in 1990?
A: Just aged. I don't think about it that way, but we're entitled to [feel vindicated], given what we've put together.... It's all looking pretty good.