Media Moguls on the March Around the Globe

Murdoch book deals: Gingrich isn't alone

RUPERT MURDOCH is no stranger to book deals for the politically powerful.

Ask Margaret Thatcher. Or Deng Xiaoping's daughter. Or Saudi Prince Khaled bin Sultan.

When Mr. Murdoch testifies today before the House Ethics Committee about his multi-million dollar book deal with House Speaker Newt Gingrich (R) of Georgia, the global media entrepreneur will be on familiar ground. There's no public evidence that such book deals are directly tied to special favors. But whether it be in Washington, or London, or Beijing, Murdoch's ability to bend or suspend regulations, which may inhibit the growth of his media empire, is shown with uncanny frequency.

Both here and abroad, Murdoch and his $12 billion News Corporation media empire have been granted such things as waivers to foreign ownership rules and exemptions from anti-monopoly provisions.

''It's the way he operates. He finds out who the most important person is, cozies up, and zeroes in on them to get what he wants,'' says a House Democratic aide.

''Rupert Murdoch through bold, creative, and savvy planning has been able to take excellent advantage of the FCC's regulatory process since day one,'' says Andrew Schwartzman of the Media Access Project, a Washington law firm. Schwartzman was referring to last Friday's FCC decision to grant Murdoch an exemption to the foreign ownership rules.

''I'm not prepared to say there's anything unlawful, particularly in the context of a system that is manipulated by others as well,'' Schwartzman says. ''It's just that [Murdoch] is very good at it, and exceptionally well positioned.''

The House Ethics Committee will ultimately determine whether there was anything inappropriate about Mr. Gingrich's accepting a $4.5 million book advance, which was done with an impressive array of legislation pending before the US Congress in which Murdoch has a direct stake.

For example, the telecommunications bill expected to pass the House this week which among other things would eliminate the limits on the number of television stations any one entity can own and do away with restrictions on owning both a newspaper and a television station in a single market (one restriction Murdoch already has an exemption from).

Gingrich ultimately gave up the advance, and settled for a straight royalty deal. But it is clear, in other countries where Murdoch struck similar deals, the arrangement has proved profitable - for all parties.

The pattern first emerged in Britain. In 1981, Margaret Thatcher's government allowed Murdoch to by-pass the Monopolies Commission and buy the Times and the Sunday Times of London, on the grounds that the paper would otherwise go under. In 1990, shortly after a private meeting with Mrs. Thatcher, Murdoch's partial acquisition of British Sky Broadcasting (BSkyB) was blessed despite regulators concerns about antitrust violations.

Murdoch now controls an estimated 37 percent of England's national newspapers and 40 percent of a satellite broadcasting company that reaches more than 4 million homes. After leaving office, Thatcher negotiated a book deal worth an estimated $5.25 million.

In China, Murdoch's STAR satellite TV has been trying to gain access to its tightly controlled information market. Last year, a division of Murdoch's Harper Collins published the biography of Deng Xaoping.

It was written by Deng Maomao, the leader's daughter and one of his closest advisers. (Murdoch also dropped the BBC's world news service from STAR, which currently broadcasts in Hong Kong, because of Chinese government officials reportedly objected to it's coverage of human rights abuses.)

Murdoch also reportedly has aspirations to break into the Middle Eastern broadcast market. Earlier this year, Harper Collins signed a book contract with Prince Khaled bin Sultan, a powerful member of the Saudi Royal family.

Murdoch has consistently maintained the book deals were simply good business decisions which, independently of any political or larger business concerns, will reap healthy profits.

Murdoch's defenders contend such conspiracy theories are born of sour grapes from people who don't grasp or are threatened by Murdoch's business acumen and breadth of vision.

''What Rupert Murdoch is to me, is one of the world's greatest opportunists,'' says Kevin Maney, author of Megamedia Shakeout.

''Whether these book deals are part of a strategy, I don't know, but he is extremely politically savvy,'' he adds.

Political analyst Kevin Phillips contends Mr. Murdoch's political methods reflect, in part,the three cultures where most of his empire is located.

''Murdoch as a lobbyist is part American, part British, and part Australian,'' says Mr. Phillips, who points out that in London members of parliament are permitted to hold outside jobs, even if their company has pending legislation before the legislature.

Phillips says Murdoch has a great interest in politics who, like his historical parallel American newspaper magnet William Randolph Hearst, is not afraid to use his assets to make a point.

''He's a populist conservative that doesn't believe either party in the U.S. or either party in the UK deserves total loyalty,''.Phillips says.

That reality came crashingly home to Conservatives in London just over a month ago.

Soon after John Major's government announced plans to overhaul media ownership laws, Murdoch's papers attacked the Conservative party it had championed over the last decade. Then, several very flattering editorials appeared about the Labor Party's budding young star, Tony Blair Murdoch has since held several cordial meetings with Mr. Blair.

That has left some Murdoch watchers wondering if Blair's biography will be coming out anytime soon.

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