Media Fortune Fame & Folly

How Murdoch made ‘secret’ fortune in India

Broadcast. Whether or not the sun has set on Rupert Murdoch’s astonishing career as a global media pioneer depends on your view of the man who still controls the $8bn News Corp , the $23bn “new” Fox Corp (including Fox News and Fox Sports) and the largest private shareholding in the world’s leading media group Walt Disney Company, to which he sold most of 21st Century Fox in 2018.

His greatest business achievements so far are a long list that includes:

  • A major Australian media group created from the single Adelaide newspaper he inherited from his father at age 21
  • The Sun, the salacious tabloid which has been the UK’s most profitable newspaper across 50 years
  • Sky TV, the world’s most successful pay TV group, launched 30 years ago as a “pirate” satellite channel
  • The money-spinning Fox TV, launched in 1986 as an unlikely challenger to the big three US TV networks
  • The revival of 20th Century Fox, producer of bestselling movies including Avatar, Star Wars and Titanic.

The list could also include: Murdoch’s defeat of the UK print unions in the 1980s adoption by his newspapers of computer typesetting, the launch of Australia’s first national daily newspaper, the formation of Harper Collins book publishing, and his burgeoning digital property sites across the US and AsiaPacific. In a swashbuckling six decades, the one-time socialist (yes) has turned a few thousand dollars of inheritance into a media fortune of more than $20bn.

The characteristic common to those achievements and to many other deals (like his profligate $3bn acquisition of the US TV Guide 30 years ago) is that any or all might have bankrupted his company; they were big bets. Even decades after his 1970s success with UK newspapers from a standing start, industry insiders across the world would have bet against his TV launches in the UK, Europe and the US.

Beyond the political muscling, schmoozing, phone hacking, and legal shenanigans, Rupert Murdoch has spent years making media investments few others would have contemplated – and winning time and again. You don’t have to like him but he has been a committed supporter of journalism: his best-known newspapers – The London Times, The Australian, and the New York Post – have almost never been profitable.

That is well known, of course. But few people outside India would recognise the stand-out Murdoch achievement omitted from my list. It is Star TV, which he acquired in 1993 for $870m when it reached a mere 200m people. By the time it was acquired by Disney as part of the Fox sell-off last year, the audience was 836m in India and more than 100 other countries.

With revenue of more than $2bn, Star India is one of India’s three largest media firms. Its 60 channels have been contributing 7% of all Fox revenues and are still growing strongly. In the 27 years since Murdoch plunged into India, the country’s media and entertainment industry has grown from $500m to $24bn. But the Star success is almost secret.

You would be hard pressed to find even a mention of Star TV in the coverage of Disney’s acquisition of Fox, even by Murdoch’s own newspapers. And the Disney acquisition presentations to investors managed to gloss over the broadcaster that is now Disney’s largest outside the US, expected to generate $2.5bn of revenues in 2019. Flick through CEO Bob Iger’s deck and you might just catch sight of the Star logo.

If we can be surprised at Star TV in India, that surprise has been shared over the past quarter-century by legions of Murdoch insiders. He knew almost nothing about India when some of his executives regaled an awayday meeting years before with forecasts of the impending growth of the Asian economies. Almost on cue, Goldman Sachs came calling on behalf of Hong Kong tycoon Richard Li who had started Star in South East Asia and moved cautiously into India. Murdoch grabbed the challenge and never let go.

The story of how he (and, crucially, his son James) built the Star India powerhouse is told in a new book* by the country’s best writer on media, Vanita Kohli-Khandekar. Her eyewitness account goes in deep to illustrate how the world’s most successful media entrepreneur does it. There’s his grasp of the big issues, of course, but also his focus on the detail of what game-show cash prizes work best – which turbocharged a whole Star channel. The restless, hard-driving boss gets a flip-side with stories of his patient learning about the myriad of Indian local languages and allegiances, customs and appetites of a population so different from the English-speaking countries he knew best. But there’s always his determination to hold his nerve, adapt and win through even when external factors (like the 1990s Asian financial crisis) threatened to wreck the strategy.

In words that speak volumes about the Murdoch strategy, Bruce Churchill, the longtime Star deputy CEO, says: “News Corp is not originally an American company and that is a big difference. A lot of American companies look at the international markets as a sales opportunity. News Corp started in Australia, then built a successful business in the UK and then went to the US. So, we knew we could build an international business by going and building local stuff, we didn’t take the Australian papers to the UK.”

Uday Shankar, the political newspaper journalist-turned CEO, who worked closely with James Murdoch to create the Star India media miracle, says: “The Murdochs bet, take risks and don’t give a damn what the market thinks. Rupert has a lot of charisma, and managers want to go into battle for him. That’s not surprising given how far ahead he thinks and how much he backs his people. People don’t realise what a federal structure we (Fox) work in. If I take a concept to New York, it is because I am not sure or because I need money. Working with the Murdochs has spoilt me. The amount of ownership and freedom I have here is tremendous.” (Shankar is now head of Disney for AsiaPacific and Chair of Disney India).

Those pre-Disney quotes are an epitaph to the golden days of News Corp/Fox. I wish I could re-print this whole story about the world’s first (and last?) multi-media emperor. The sharp-eyed Vanita Kohli-Khandekar interviewed 100 people for this great story of how Murdoch made it in India. It’s a secret no more. You should read it.

The Making of Star India” by Vanita Kohli-Khandekar. Published by Penguin Random House, 10 August 2019.