Where was Murdoch while all the hubbub was going on in the British High Court in February 1997? He was in New York as the guest of the King David Society, where he had just been named Humanitarian of the Year, an award to be made at a gala dinner in May. It was the perfect counter to any unpleasantness raised by Michael Clinger in Israel.

Murdoch instead was focused on his faltering US satellite venture, ASkyB. He had promised to find a way to raise $3 billion to pay for it by February 24 when he had called an analysts' meeting to explain his plan. Unfortunately he didn't yet have a plan.

Murdoch in effect had 'stolen' his US satellite license from John Malone and the big cable operators. Murdoch's partner, Bert Roberts at MCI, had convinced the Federal Communications Commission to take the satellite license back from the cable operators, and to put it up for auction in January 1996. MCI and Murdoch were all set to buy the license up on the cheap when they ran into Charlie Ergen, a one-time professional gambler from Denver who ran a new satellite service called Echostar. Ergen bid the price for the satellite license up to a crippling $682.5 million.

Now in February 1997, after MCI had dropped out of the partnership, Murdoch was so desperate he was ready to do a deal with Ergen to merge his satellite interests with Echostar in a much more powerful venture called Sky. Ergen and Murdoch announced the plan at the News Corp. analysts' meeting on February 24, and promised their move would decimate the cable companies. Cable operators went into shock and referred to the Murdoch-Ergen venture as Deathstar.

But to get Sky to work, Murdoch needed Congress to change US copyright law, so he headed for Washington.

Chapter Eleven: Divided Royalties

The Spring of 1997 was a bad time to be looking for favors in Washington. Speaker Newt Gingrich was facing calls for his resignation. The loudest calls came from the Weekly Standard — one of Murdoch's own publications. The Republicans had swept to power with their Contract With America. When it came to working out policy for the communications revolution, they had turned to the right-wing think tanks, who argued that the march of technology meant that media needed less regulation than ever.

Murdoch made several famous speeches about technology in the mid-1990s. His real subtext was that Congress should cut back on the powers of the Federal Communications Commission. Coincidentally this fitted in pretty well with the corporate ambitions of the telephone companies and other media groups that were sponsoring the right-wing think tanks. Murdoch was really attacking the FCC, just at the time that the FCC was inquiring into the foreign ownership of his Fox television stations.

This happened just as the Republicans swept to power in November 1994, and Murdoch descended on Washington to lobby politicians to stop the FCC investigation. His meeting with Newt Gingrich took place just before HarperCollins bid $4.5 million for two books by the Speaker of the House.

The resulting furor forced Gingrich to give up the $4.5 million advance (though he still had to pay his agent for the deal he had given up). The Murdoch factor cost Gingrich an enormous amount of money and also triggered an ethics inquiry that tacked on for scrutiny other matters besides the book deal. In January 1997, this led to Gingrich paying a $300,000 fine. To pay the fine, he had to write the second book for HarperCollins. So while Murdoch was arguably the cause of his misfortunes, Gingrich was still tied to him.

But Gingrich's loss of power meant he could not help Murdoch with the changes to the copyright law that he needed. Murdoch made a speech in Washington, but he had already conceded that the fight was lost.

Meanwhile the cable operators had regrouped and had started refusing new deals to carry Murdoch's programming. Facing disaster, Murdoch went to John Malone to ask what could he do, i.e., 'Plan B'? It turned out that Plan B was to dump Charlie Ergen at Echostar and begin talks to join forces with the cable operators' satellite operation.

Chapter Twelve: The Testing of Pat

The same week in February 1997 that Murdoch met with Charlie Ergen to set up the Sky deal, he was also on the phone with Pat Robertson, trying to buy Robertson's International Family Entertainment and its cable franchise, Family Channel. Robertson needed money. He had tried to branch out into new businesses to fund his televangelism operation— most controversially with diamond mining in Zaire. One night his personal bodyguard was knifed in the Kinshasa Intercontinental Hotel and robbed of $143,000 in his attaché case. Questions remain as to what he was doing with the money, and why an IFE employee was attacked while working for Robertson's private business interests. But Zaire was a sore point for Robertson.

In 1996, Murdoch had set up a venture called Fox Kids with Haim Saban, the man who created the Mighty Morphin Power Rangers. Murdoch wanted to run Fox Kids on the Family Channel. In February 1997 Robertson backed away from the $350 million deal at the last moment. Murdoch decided he could still swing the deal. Instead of offering IFE shareholders any money, Murdoch offered to pay all the $350 million directly to Robertson and his son. The saga of the next months is of Robertson struggling with his conscience, and making further demands of Murdoch on behalf of IFE shareholders. Eventually Robertson made a remarkable offer, to give up $150 million of his own payout, in order to raise the payout for other shareholders.

This was a great act of principle. Robertson's change of heart also coincided with revelations in the Virginian-Pilot that planes bought to help refugees through his aid group, Operation Blessing, had been used instead to haul diamond-mining equipment. Was Robertson's change of heart produced by the bad press?