This Media Life

The Fox Trot

But back to the satellite systems.

He now owns two: BSkyB in the Euro market and StarTV in the Asian market (which is why he canceled Patton's book -- he wants his satellites to be beaming into a billion Chinese homes). The satellite strategy has been his technology-vision thing, and also allowed NewsCorp to maintain that it is the only truly global media concern. But it's also a business that has failed to achieve predicted levels of market penetration, tied up an enormous amount of cash, and seen other technologies supersede it (like the whole digital revolution). What to do with this business has long been the Murdoch conundrum. And as that conundrum has been debated, the other great mogulopolises have grown far faster than NewsCorp.

"Buying" DirecTV is the apparent solution. That is, he would roll his satellite assets into a gargantuan and profitable distribution entity, one -- at a prospective market cap of $80 billion -- that is vastly larger than NewsCorp itself.

But let's try a more obvious, less tortured explanation of the structure of the deal -- which is generally said to be a 30-70 split in favor of the other investors. Murdoch isn't buying DirecTV; he's selling his satellite businesses.

It is true that NewsCorp, with its minority interest, will in theory control the new entity. But control is a complex and variable condition -- especially when you're the minnow in an enterprise full of really big-fish investors (including Bill Gates and John Malone). It's a company that will, inevitably, mutate beyond the Murdoch interests.

This is a vast departure from the way Murdoch has lived his life and built his business. It's a corporate rather than a mogul approach. It's a constrained and humbled Rupert.

So what's he got up his sleeve? Over the course of 25 years, Murdoch has outplayed everybody. His moves are always the most prescient and audacious. Might this not be the last stage of his vision? Après moi . . .?

Now, he could be as blind as any parent. He might really think Lachlan or James are thoroughly created in his image and can truly run his creation. But as likely, he is also as clear-sighted as any parent, with a loving understanding of his children's limitations.

Bear with me. There's a kind of poetry here. Any megamedia conglomerate is really, as everyone who has worked in one knows, a confederation of more or less noncooperative parts. So eventually someone will arrive at the brilliant strategy of letting the parts go. Pushing them off. Untangling the ties. It makes perfect sense that, just at the apogee of consolidation -- as AOL Time Warner goes on about worldwide convergence -- Murdoch, who always sees things first, would, of course, begin to deconsolidate.

The DirecTV deal hints at the model (indeed, Murdoch has already done a "carve out" with the Fox group -- the studio, network, and stations -- creating a separate public entity). It's reverse-engineering the corporation. It's breaking the unwieldy nation into city states. It's a plan for a more or less sensible network of loosely affiliated enterprises, over which Lachlan and James might ceremonially, and unpowerfully, preside.

But is this -- as he possibly mounts the vastest, most frightening media consolidation yet -- what he wants me to say?

Or, by doubting his ambitions and dismissing his children and seeing the devolution of the empire as feudal drama (complete with morganatic wife) as much as corporate strategy, am I fearlessly risking the China treatment? Or is that, in a reverse conflict, to my benefit? It could well be in my interest -- I'm not sure you can really lose by making the Murdochs mad -- to provoke a tiff (once, after I questioned his strategies for conquering the Internet, James Murdoch called me, in print, to my 9-year-old son's undying appreciation, an "obnoxious dickhead").

Just so you know the conflicts.

E-mail: michael@burnrate.com