But while Murdoch was clearly uncomfortable in the spotlight last week, his appearance on the Hill was business as usual for Murdoch, who has spent more than three decades courting politicians. In 1980 a tete-a-tete between Murdoch and President Carter culminated in a Senate-committee probe of a government-backed loan granted to a Murdoch company. And two years ago, his bookpublishing firm bought former British prime minister Margaret Thatcher’s memoirs for a whopping $5.4 million, leaving many observers wondering whether it was a goodbye gift for her support of his business interests.
Murdoch declined to be interviewed for this story. A spokesman denied that Murdoch has done anything improper as a result of his meetings with Gingrich and other politicians. “Rupert has met every House speaker and U.S. president going back in time more than 20 years,” says the spokesman. “The subject has always been national and world affairs.” His spokesman also correctly points out that most communications-industry CEOs actively lobby government officials. Sure thing. But what no one denies is this: Murdoch is arguably the grandmaster at using his political connections – and the clout of his media properties – to get his way.
At 63, Murdoch shows few signs of slowing the expansion of his News Corp. empire. Aggressive and brilliant, he is arguably the media industry’s foremost visionary. From the two Australian newspapers he inherited in 1952, Murdoch has assembled an empire stretching from Sydney to Los Angeles that generates some $9 billion in annual revenues. Among the holdings in News Corp., of which Murdoch is chairman and largest shareholder: Fox, the Twentieth Century Fox studio; the New York Post; TV Guide; British newspapers; Asia’s Star TV and Europe’s Sky TV; and book publisher HarperCollins.
The newspaper properties may be Murdoch’s most effective lobbying tool, especially in Britain. From the start of Margaret Thatcher’s 11-year tenure in 1979, his papers rallied behind her, and Murdoch’s empire flourished. Two years after she came to power, he doubled his newspaper holdings in Britain by acquiring the Times and the Sunday-Times without the standard antitrust review. In 1987, he acquired his fifth national paper. the tabloid Today. Again., regulators didn’t review the deal. Finally, in 1990, Murdoch acquired a half-interest in BSkyB, Britain’s only satellite TV franchise. Thatcher, who knew of the transaction in advance, winked at a regulation that required a government review of deals involving owning both broadcasting outlets and newspapers.
In the United States, Murdoch’s newspapers have been good for business and for striking back at his enemies. In 1980 Murdoch was granted a low-interest, 8290 million export-import loan from the United States for Australian-based Ansett Airlines, which he partly owns. It was approved after he had a private lunch with President Jimmy Carter, during which Murdoch pledged. and later delivered, a New York Post endorsement of Carter in his Democratic primary battle with Massachusetts Sen. Ted Kennedy. Murdoch has said there was no link between the loan and the endorsement.
Murdoch is particularly good at using high-priced Washington insiders and his own lobbying skills to get his way. His chief lawyer, Michael (Mickey) Gardner, then with the high-powered firm of Akin Gump Strauss Hauer and Feld, structured the deal that allowed Murdoch to acquire six big-city TV stations – which he used to help launch Fox Broadcasting in 1986. The deal had faced potential hurdles because U.S. law limits ownership of broadcasting outlets by foreigners. But Australian-born Murdoch changed his citizenship, a usually lengthy process that Murdoch operatives helped to get expedited. Soon after the approval, Fox hired Thomas Herwitz. a senior FCC lawyer who had been involved in approving the deal, to be a lobbyist and executive in Fox’s Washington affiliate.
Murdoch didn’t always win right away. of course. In 1988. he clashed with Kennedy when the senator sneaked through legislation that would block Murdoch from owning TV stations and newspapers in the same city. He dispatched his lobbyists to derail the bill and even persuaded President Reagan to attack Kennedy’s move in an addendum to his State of the Union address. While Murdoch lost the first round, he was eventually backed by the courts.
Now Murdoch may need his friends in government more than ever. His current problems stem from the 1985 purchase of the station group that launched Fox. Although the FCC approved the deal and granted Murdoch numerous other important breaks to help him start up the Fox network, the 10-year-old deal is now under scrutiny. The FCC is investigating, in effect, whether the Murdoch camp misled the agency on the question of foreign ownership. (The FCC will question Murdoch under oath on Friday.) The FCC began the probe after the NAACP, which seeks to increase minority ownership of TV and radio stations, filed a challenge to Fox’s right to retain broadcast licenses on the ground that the network might be foreign-controlled. The case became even more serious for Fox when NBC challenged, on the same ground, the purchase of three stations recently.
Perhaps that’s why many lawmakers are suspicious about the book deal with Gingrich and Murdoch’s recent visit to Washington. Murdoch first visited Gingrich after the election last November. Although Murdoch and his lobbyist mentioned Fox’s problems, the Murdoch camp insists Gingrich wasn’t asked for anv favors or offered a book deal. Murdoch’s spokesman says the deal – was made independently by HarperCollins. Indeed, other publishers such as Simon & Schuster offered Gingrich advances of as much as 84 million.
Will Murdoch’s political connections allow Fox to prevail over the NAACP and NBC? Murdoch’s spokesmen – and his supporters on the Hill say the cases will be decided on merit. But some already see Murdoch’s fingerprints. He recently met with Sen. Larry Pressler, the new Republican chairman of the Senate Commerce Committee, who has called for an end to the foreign-ownership ban. Pressler, whose office denies any connection between the Murdoch meeting and the senator’s position, also warned the FCC to tread carefully in the probe. As Murdoch’s onetime defender Ronald Reagan might say, “There he goes again.”
