World Domination Plot Exposed!

Now, the inside scoop on Rupe!

Plus: The shocking truth about China.

In New York, I spent four afternoons in a row at an Irish bar on 47th Street hoping to ambush New York Post reporter and Rupert Murdoch foot soldier of 31 years Steve Dunleavy, who, I'd been told, "lives there." Dunleavy never showed, but two bartenders on two occasions said there should be a "rerun channel" on cable.

In a Sydney hotel room, I watched hours of Rupert Murdoch's Sky sports programming. The highlight was something called "netball," played by the national women's teams of Australia and the United States, during which I jotted down: "Netball = (field hockey + basketball + roller derby + misguided ambition) / a small but potent amount of unsettling, and quite possibly even dangerous, thinking."

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In London, at lunch with Elisabeth Murdoch, Rupert's daughter and general manager of British Sky Broadcasting (BSkyB) satellite network, I couldn't figure out how to eat the croutons in my salad without using my fingers. And I got an odd illicit thrill whenever she referred to the most notorious media baron in the world as "Dad."

In Paris, I saw Belgium play South Korea in the World Cup. I sat next to a man from Antwerp who afterward put his hands on my shoulders, shook me gently, and told me the afternoon had been one of the "best instances" of his whole life, even though the game ended in a draw.

On a plane, somewhere in the middle of it all, I read an essay by Joan Didion in which she writes that people live their lives desperately attempting to impose a narrative upon the disparate images -- "the shifting phantasmagoria" -- of actual experience. This never seemed more true than during the two and a half weeks last June I spent circumnavigating the globe (in coach) trying to find the narrative running through the media empire that is Rupert Murdoch and his company, News Corporation. For in making sense of Murdoch, more than with any of his competitors, narrative is precisely what is craved.

In an industry that affords more power than money, perhaps no single person controls so much of that power as does Murdoch -- a fundamentally scary thing in and of itself. But chase his shadow to the horizon and back again, and a more basic and penetrating realization emerges: When it comes to News Corp., there is no narrative.

Forget any notions of deep, dark secrets, of political and social agendas and global conspiracies to control the planet. Murdoch's engine runs on America's (and, increasingly, the rest of the world's) current fuel of choice -- instinctual, cold-blooded capitalism. Nothing more, and nothing less. In her essay, Didion writes: "We tell ourselves stories in order to live." Not Murdoch. He lives to sell us stories.

Rupert has the world by the balls!
Over the past five years, News Corporation has invested more often in sports and sports programming than in anything else. Recent investments and acquisitions include: the Los Angeles Dodgers; Fox Sports Net; minority interests in the Los Angeles Kings, Los Angeles Clippers, Los Angeles Lakers, New York Knicks, and New York Rangers; a startup Australian rugby league; satellite sports channels in Asia, Australia, and Britain; and, most spectacularly, the regional broadcast rights to many high-profile sporting events around the world. This has all cost more money than you can count. Point: The media baron who broadcasts the games the world loves controls the world's hearts, and hence the world's wallets -- and hence has a firm grip on its balls.

Bigger, faster, stronger!
New York, June 3 -- TheNew York Times is the greatest newspaper in the world, but if you want to know the pulse of the city that lends it its name, buy the New York Post. Better yet, just glance at the 150-point headlines that shout from its front and back pages every day.

The Post follows Murdoch's blueprint for his papers around the world: crime, sex, celebrity, political scandal, and sports. Lots of sports. If you're a sports fan in New York, you read the Post -- and there are a lot of sports fans in New York, which is why I went to see Greg Gallo.

Wiry, fiftyish, with big, sympathetic eyes and graying brown hair, Gallo looks like a character actor who can't understand why he's always cast as a newspaperman. A Murdoch man and proud of it, he was at Murdoch's National Star in 1973 and came to the Post in early 1977, a few months after Murdoch bought it for the first time. He's been sports editor at the Post since '94 (after Murdoch had already bought it for the second time), and if you listen closely to what he says about his section, you'll get to the beating heart of News Corp.'s current global strategy.

"We're more passionate, colorful, emotional," he tells me, each word more clipped than the last, his eyes fixed with the certainty of a zealot. "We get after what's in front of us. Our eye is stronger, our voice is stronger. We are loud...and try to connect with our readers every day. That's how we make our business here. That's what a tabloid is supposed to do."

We're sitting in his small glass-walled office on the 10th floor of the blockwide vertical gray battleship in midtown that serves as News Corp.'s U.S. headquarters. It's furnished in Newsroom Design 101: gray cubicles, white terminals, and stainless steel. The decor is bleak, but the mood is loose -- fun, even. Several fake front pages hang on bulletin boards, featuring doctored stalkerazzi photos and headlines that blare "Junior artist found in love shack with senior editor!"

Me: "How many extra papers did you say are sold the day after a big game?"

Gallo: "15,000. Sometimes a lot more."

Me: "So, do you think Mr. Murdoch is a sports fan?"

Gallo: "He's never come in and said, 'Whoa! Whaddya think of those Giants?' But he sure knows where the money is."

Ominous memo tacked up in the Post's newsroom:

"All the thermostats along the walls have been adjusted to take care of the temperature problems that you have been having.... Do not touch any of the dials, because you will probably add to the problem...not solve it!"

Swinging for the fence!
Los Angeles, June 8-11 -- On the Fox lot at the corner of Pico Boulevard and Avenue of the Stars, next to a fake city street where they film bad cop movies, stands the achingly new Fox Network Center, the epicenter of the television studios of Fox Sports Net, an almost 2-year-old national cable network that is already minting money for News Corp.

Murdoch bought Twentieth Century Fox in 1985, and started the Fox network soon after. Each move brought a chorus of criticism -- most notably, that he spent far more money than he should have. In hindsight, however, observers point to his purchase of the broadcast rights to the NFC games in 1993 (for $1.58 billion) as the start of the Fox network's now well-assured success. That experience taught Murdoch a valuable lesson.

There is also no doubt that Murdoch learned a great deal from watching ESPN grow to post annual revenues of more than $1 billion. And this, according to Van Earl Wright, an anchor of Fox Sports Net's centerpiece show, "Fox Sports News" (a nightly sports highlights program similar to ESPN's "SportsCenter"), is what Murdoch did with that knowledge:

"Rupert said, 'How is ESPN making so much money? And how can we do that?' And somebody had the idea to buy up all the regionals [the cable networks that show all the games of all the local teams]. So he did it. Cost you $800 million." Just two years later, Fox Sports Net is in 60 million homes; ESPN (launched in 1979) is in 74 million. And in some markets Fox gets better ratings, courtesy of its regional sports channels.

Wright summed up Murdoch's sports strategy this way: "What Rupert knew was that if you buy the channels that are showing all the local games, you're basically buying the local fans. He knew that people are just looking for a reason, any reason, not to turn the channel. And while they might not be loyal to any network, they're out-of-their-minds loyal to their teams."

During the afternoon I spent on the set of "Fox Sports News," Wright was the only person willing to talk on the record, despite the fact that no one had anything really bad to say about Fox.

There were, however, two notable exceptions.

One was Wright telling me about the time the show wanted to run highlights of the Ultimate Fighting Championship, a no-holds-barred fighting contest banned in several states because of the especially brutal nature of the fighting. "I told them I thought it was disgusting," he recalled. Then he looked down. "But Kevin, my co-anchor, loved the stuff, and the piece still ran."

The other came courtesy of a Fox Sports staffer eager to remain nameless: "It's funny working for Murdoch," he told me. "I mean, you go to see a movie like Tomorrow Never Dies where he's the Bond villain and half of you is like, 'That's a total exaggeration.' But, you know, it's not like he doesn't want to control the world."

At one point during my visit, a producer called a pretaping meeting with Wright and one of his co-anchors, a woman with light brown hair and a face that, from certain angles, appeared literally transparent. The usual things were discussed, until the producer brought up the fact that the evening's show would be the first for Fox's new soccer analyst, "Glenn...somebody." Wright and Co. tensed up. "Don't worry," said the producer. "He's going to tell you what to ask him." They seemed relieved, and even the producer giggled, adding: "You know, people really do care about this shit."

Sports junk
Sydney, June 12-16 -- It was winter in Sydney; everyone wore big winter coats even though it never got colder than 50 degrees. This was strange, but not strange enough to keep me from gaining a better understanding of News Corp.'s global vision, one that is consistently light-years ahead of its competitors: It's geography, stupid. Physical isolation makes it impossible for many Australians to think of anything else but the world beyond their borders. This was evident in the way the eyes of the Sydneyites I met would get all big and wobbly when I told them I was headed around the world. And, of course, projecting outward has paid off handsomely for Murdoch, who has been thinking on a planetary scale since he left Australia to study at Oxford in 1950.

Murdoch's influence is, economically and culturally, greater here than anywhere else. He owns the country's only national newspaper (the Australian), Sydney's largest tabloid (the Daily Telegraph), and significant percentages of more than 100 other regional newspapers, as well as part of the Foxtel cable network, 50 percent of one of Australia's biggest airlines (Ansett Australia), and 50 percent of Australia's National Rugby League Partnership. Australians have a lot to say about him. Listen:

"You know, with sports, it's like the world's biggest addiction. Once you've got them hooked, they're hooked. I hated sports before I came here, but it's really quite exciting being a part of it. It also pays quite well." -- Jacqueline Hunt, senior presentation coordinator of Fox Sports Australia

"The way to understand Rupert Murdoch is to understand his commercial instincts rather than his cultural instincts. His people always point to the fact that, at least here in Australia, come election time his papers do not uniformly support one side or the other. And they don't. But in the end, I wonder if it's something most of the public even thinks about at all." -- Pilita Clark, media writer for the non-Murdoch-owned Sydney Morning Herald

"You don't have to know the teams, or even understand the game being played, to be riveted by the last three minutes of most sporting events we broadcast." -- Craig Dobbs, programming director of Fox Sports Australia

"It's almost too easy to demonize him. But there's nothing he's really done that hasn't been done before. He didn't invent the tabloids. What he did was figure out this sports strategy, and become a corporate starfucker. And most Australians are absolutely mad for sports, and can identify at least a little with starfuckers." -- Phillip Adams, filmmaker, radio presenter for Australia's ABC radio, and the guy Noam Chomsky visits when he's in Australia

"How did you get this number?" -- Ian Frykberg, director of the National Rugby League Partnership

Inside the death star
Hong Kong, June 16-21 -- In Hong Kong in June, it's violently humid, and rains every 21 minutes (for between 7 and 12 minutes). At night, with all the neon, it really does look very much like the set of Blade Runner. None of this matters, however, when you're in the offices of Star TV.

Encased in an ice-blue glass building that juts off the Kowloon Peninsula and into the South China Sea, it features air conditioning set on kill and a design motif that years from now will probably be known as Late John Woo (glistening black-and-white parquet floors, intricate stainless steel staircases, lots of uncomfortable sofas, and various pieces of bivalve-inspired sculpture). Star TV is the satellite broadcasting capital of News Corp.'s Asian and Middle Eastern divisions.

Using three satellites, it beams 25 channels with programming in eight languages to 53 countries, a geographic rectangle framed by New Zealand, Sudan, Ukraine, and the northeast coast of Pacific Russia. Star beams at least one, and as many as four, sports channels to each of these markets. It has an audience of 260 million. But it's the estimated 170 million viewers in mainland China that Murdoch cares about the most.

Murdoch is obsessed with China, obsessed with breaking into the last, best untapped media market in the world. China is his biggest venture, and Star is said to be losing $100 million a year. But Murdoch doubtlessly views those losses as a down payment of sorts.

In pursuit of his obsession, he has played ball with the Chinese government, and his moves in that regard have been some of his most controversial: the decision not to publish a book by Hong Kong's former British governor Chris Patten, because, as Murdoch said at a press conference last June, "We're trying to get set up in China. Why should we upset them?"; the pulling of BBC World from Star's Chinese market; the reported lavishing of a $1 million book contract on Deng Xiaoping's daughter; and, most recently, the production of a Web site for the People's Daily, China's state-controlled national newspaper.

All of this was underscored by my visit to Star, specifically to the office of Jannie Poon. Poon, a corporate affairs manager at Star, is Chinese, young, exceedingly polite, and genuinely helpful (that is to say, she was the only person at Star who returned any of my calls). She showed me around Star's offices, gave me several multicolored, Risk-looking maps that highlight Star's geographic reach, told me she thought Murdoch was a charming man to meet in person, and said that a lot of the criticisms he receives on the "Chinese issue" are really just "misunderstandings."

"We're an entertainment company, not political," she told me as we sat in her office. Displayed prominently were both a poster guide to satellites broadcasting in Asia, including those owned by Murdoch, and a remarkably similar chart titled "Government Organizations of the People's Republic of China."

"That must be helpful," I noted.

"Oh, it is," she said with a smile, then pointed out her window to the building next door. "That's a five-star hotel," she said. "It's where Jiang Zemin stays when he's in Hong Kong. It's very convenient." I couldn't tell if she meant convenient for Jiang, or for News Corp.

Other things people said in Hong Kong:

"What's been most offensive is his cultural, not his political, insensitivity. When News Corp. first came to Hong Kong, a company exec is rumored to have told the head of the local TV company, 'The trouble with you Chinks is you don't fucking understand TV.' Now, there is still some debate of whether he said 'fucking' and 'Chinks,' but this has characterized their dealings here." -- Simon Twiston Davis, editor of ASIA com, a regional telecommunications and broadcasting newsletter

"I think Murdoch will eventually be the one to get in, even though I don't think Asians will ever go for sports the way he might like them to. But if it's not him it will be someone else just like him. And what he's done here hasn't been shocking to anyone here. The more I look at the way my fellow Chinese react to him, and to others, I can't help but wonder if they won't end up getting both the media and the government they deserve." -- Kin-ming Liu, opinion page editor of the Hong Kong Economic Times

Family Values?
London, June 21-25 -- Nowhere are there more people who hate Murdoch with greater passion than in London. When he first came to Britain, he was seen as an obnoxious outsider from a former penal colony, which he pretty much was. Then, of course, he started buying tabloids and making them even more full of his recipe of crime, sex, celebrity, political scandal, and, yes, sports -- lots of sports -- than they already were.

His response then, as it is now, was that he was simply giving the people what they want, which he pretty much was.

In London, I had lunch with Murdoch's daughter Elisabeth. She is the general manager of broadcasting at BSkyB, a member of News Corp.'s executive management committee, and the holder of a portion of News Corp. stock. (The Murdoch family -- including Rupert; Elisabeth; son Lachlan, who runs News Limited in Australia; and son James, who is deputy publisher of the New York Post -- controls 31 percent of News Corp. stock.) She is very smart, and quite friendly, and met with me only as a favor to a mutual friend with whom she went to high school in New York, where she was raised.

We ate at a fancy seafood restaurant in Covent Garden, where most of the other diners seemed to be talking about the fact that England had lost to Romania the previous evening in the World Cup. Here's some of what she told me:

That her father doesn't really "live" anywhere, except "on a plane," and tends to spend "two weeks in L.A., two weeks elsewhere, and a lot of time in Southeast Asia."

That the company's sports strategy, "within reason," is to "spend what we have to spend to get the sports we want."

That the genius of her father is that he is a "master of knowing [his] audience and environment."

That, when it comes to the media and the public, she agreed, it is sometimes worth asking oneself: "Who leads whom?"

That, in regard to China, "either you believe in the strategy of opening up [a closed society] through any avenue you can, or you don't."

That, "of course" there were profitable avenues, such as pornography and gambling, that the company wouldn't pursue for ethical or moral reasons, but no, there wasn't an instance she could recall when the company passed on something for ethical or moral reasons.

That she tried to buy the British rights to the "Jerry Springer Show" for BSkyB, but was outbid.

That "my father is not cynical, and not scheming. [Pauses.] Well, [laughs] he schemes, but not in the duplicitous sense of the word [laughs again]." Coming away from a conversation with Elisabeth Murdoch, you understand that a large part of what makes News Corp. different from, say, Disney or Time Warner is that it is a family business, one controlled by a dad who doesn't take any crap. You also realize that asking one of Murdoch's children to be objective about News Corp. is like you being asked to be objective about your own father. It's impossible.

Rupert Murdoch's religion is the success of his company -- meaning his family enterprise -- and the success of his family/company is predicated wholly on the success of free-market capitalism in its most opportunistic and potent form. This is likely so deeply ingrained in the Murdoch children as to be nearly genetic.

Football, bloody football
Paris, June 25-27 -- Paris was beautiful. There were Brazilians dancing in the streets, and Belgians wearing funny capes, and Nigerians banging drums; even the English and the Germans, when they weren't beating people, were fun to look at. People pretty much walked around with smiles on their faces all the time.

The World Cup -- even more than most major sporting events -- brings out the best and the worst in people: Something about getting a chance to be a part of a mob (always a thrill), and the almost tribal patriotism that comes with wearing dopey shirts emblazoned with the name and colors of one's preferred country strips humans to their most primal urges and allegiances. In this state, the most basic actions -- eating, drinking, cheering, and, less admirably, committing random acts of violence -- acquire a glossy, lustful sheen and the promise of an even more addictive, adrenalized rush than usual. For a time in June, thanks to the World Cup, this is what Paris was like.

More than simply engulfed, the city was consumed by sheen and buzz, and by the frenzy of coevolutionary hype and advertising that surrounded it. If a television was on, it was probably tuned to a game; if not, posters, fliers, superfluous banners, and stuffed-to-the-gills news kiosks picked up the bombardment, exhorting one and all to welcome the Coup du Monde into his or her pores either by drinking at a certain bar, dining at a certain café, dancing at a certain disco, or, in one case, getting medical treatment at a certain hospital. And everyone pretty much bought it. As one maniacally grinning British fan told me, "What's not to like? It's bloody football!"

The hopes of literally millions of spectators rode on the games, as did untold riches in advertising and sponsorships, whose fever pitch at times outmatched the hysteria of the world's fans. A cumulative 37 billion people watched the World Cup this year on TV, according to FIFA, the international football federation that organizes the games. And FIFA received an estimated $240 million from various companies to become official corporate sponsors. And Rupert Murdoch didn't really own any of it. Due to a contractual obligation with FIFA, the 1998 World Cup was broadcast on free-to-air TV in most of the world.

Next time, for the 2002 tournament cohosted by South Korea and Japan, the international rights are currently in the possession of Kirch, a German media group. Murdoch, reportedly, is still interested.

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