Now Playing, Rupert Murdoch In Mogulby
Keith Rupert Murdoch has reinvented himself before. When his father died, he shelved his college career and political aspirations to take over the family's two small Australian newspapers. Gradually, Murdoch has left the running of his newspapers to others, devoting his energies instead to building News Corp. into a globe-girdling empire of television stations, magazines, and book publishers. Now, for his next act, Murdoch intends to become a Hollywood mogul.
That's a big change, even for Murdoch. But the abrupt Feb. 24 resignation of Barry Diller, who ran Murdoch's Fox Inc. studio and TV network, leaves him small choice--and it may be what he has wanted all along. Shifting the focus to Hollywood, he told BUSINESS WEEK, signals his preoccupation with the growth potential of the company's electronic media--which include not only the five-year-old Fox network but also a British satellite-delivered TV service. Murdoch also intends to take over the delicate task of picking hit movies. "Someone's got to have the final editing responsibility for picking the films," he says. "That's me now."
That's not to say the new Fox chairman will soon be roaming the set of Home Alone 2, the sequel to Fox's fabulously successful 1990 hit. A shy man by nature, Murdoch has never been one for Hollywood glad-handing. And at least for now, he pledges his total faith in Joe Roth, the former movie director who has run the studio's film unit for three years and who is negotiating a contract extension. But Murdoch has become more involved with running Fox for much of the past eight months.
FOXY MOVE. Although both Murdoch and Diller firmly deny it, Hollywood types have been whispering that the two men weren't getting along. Diller is an often fiery executive who has been widely credited with the success of the Fox network. But recently, say Fox insiders, Diller chafed as Murdoch sat in on even the smallest meetings.
In fact, Diller and Murdoch may have clashed over who would run Fox--or even own it. Diller told BW that last summer he tried to buy Fox from Murdoch. What prompted such a bold move? "I think it was the fact that he turned 50, and he was tired of making billions for others," says Diller's friend, entertainment mogul David Geffen. Indeed, Diller's track record, dating from his days as head of both ABC network and Paramount Pictures Corp., is dotted with moneymaking successes. His next stop? He is said to be worth nearly $100 million and, although he has been rumored to be looking at buying a piece of the NBC network, Diller says he hasn't decided yet what to do.
Murdoch can concentrate on Fox because his money worries have eased. News Corp., with its debt down to about $7 billion from $9 billion, has steadied its finances, despite having lost $305 million in the fiscal year ended last June 30. In its most recent six months, the company earned $189.3 million, an increase of 38% over the previous year.
News Corp.'s TV operations, which include the Fox network and seven U.S. stations, were the biggest winners. Thanks to better ratings and tighter cost controls, operating profits were up tenfold, to $124 million. And British Sky Broadcasting Ltd., the satellite-delivery system, should turn profitable in mid-1992, after saddling News Corp. with $600 million in losses. But the company's publications are still suffering from the general dearth of advertising, and Murdoch still must worry about a $2.4 billion balloon payment on News Corp.'s debt due in 1994.
NOT YET NATIVE. Next on Murdoch's agenda is expanding the Fox network's schedule, where added nights already have boosted ratings by 21%. He intends to offer seven full nights of prime-time programming, up from four now. He also wants to launch a cable channel.
Murdoch hasn't gone completely native, even though he owns a big house in Benedict Canyon and has been seen lately stepping out with fellow mogul Marvin Davis and former President Reagan. "I'll have to admit the guys who come to work without ties look darn comfortable," he muses. "But I think I'll keep my tie, thank you. Taking it off would be the best way I know to knock a couple points off my stock price."