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"What Murdoch offers – what Murdoch is offering here to you now – is a piece of the future. The man before you has this uncanny ability to make the future happen, in a way that almost no one in the world can. It is a future of ideas and visions that makes Murdoch almost irresistible to anyone with a spark of imagination . . . Murdoch in your face at Force Ten still takes your breath away, with his tantalizing, attainable view of a possible future. This is Murdoch in full seductive mode." (Chenoweth, 2001: 132).

Pragmatic Foresight as Strategic Architecture

Rupert Murdoch's transformation from Adelaide newspaper proprietor to international media magnate is a case-study in how pragmatic foresight can be successfully applied in today's global risk society. Two recent books provide a glimpse of Murdoch's deal-making and existential challenges. The extensive interviews with the Murdoch clan in Wendy Rohm's Murdoch Mission (2002) represents the 'authorized' version: a book-length 'position audit' of News Limited's deals-in-progress (Gemstar and Sky Global), new markets (China and India) and succession planning issues. Neil Chenoweth's Virtual Murdoch (2001) represents the 'unauthorized' version: an astute non-linear investigation into Murdoch's feuds with other media icons, negotiation tactics and corporate near-collapses. Chenoweth and Rohm's sometimes-conflicting accounts reveal why pragmatic foresight becomes a necessary strategic architecture in a media landscape where Merger & Acquisition deals are driven by 'disruptive' new technologies (Rohm, 2002: 106) and where 'virtual' appearances are everything (Chenoweth, 2001: 337).

The Telos of Sky Global

News Limited faced several deals-in-progress and challenges in early 2002 (Rohm, xi: 2002). The key 'vision' was the Sky Global network, which Murdoch had positioned as a career-crowning glory (Rohm, 2002: ix). He hoped to integrate North America into the $110 billion global satellite network through Sky-DirecTV (Chenoweth, 2001: xi), a merger with the 200-channel DirecTV network (Rohm, 2002: 24), that would create $8 billion cash for GM's Hughes Electronics (Rohm, 2002: 28). England's BSkyB satellite network remained the geostrategic 'core' of the Sky Global proposal (Rohm, 2002: 17). The mega-deal fell apart when Charlie Ergen's Echostar outbid Murdoch for DirecTV (Rohm, 2002: 34-35).

The Sky Global proposal also relied on encryption technology developed by Israeli company News Data Security (Rohm, 2002: 223) and interactive television portals created by Gemstar-TV Guide (Rohm, 2002: 14). Although Murdoch was forced to take a write-down on Gemstar-TV Guide's worth, he remained convinced that broadband t-commerce was the "killer app." Since Gemstar's founder Henry Yuen controlled 90 interactive television patents, Murdoch reasoned—-despite counterclaims that Yuen was a "patent terrorist"—-that leveraging this intellectual capital would achieve standards lock-in (Rohm, 2002: 102).

Leveraging intellectual capital was pivotal to Murdoch's global deal-making. News Limited's chief operating officer Peter Chernin had invested $17 million in 1995 (US$60 million by 1997) to hire top Hollywood writers and producers to create hit television series (Chenoweth, 2001: 253), Rohm, 2002: 63). Developing local content enabled Sky's satellite broadcasts to India, side-stepping government and regulatory issues (Rohm, 2002: 207). By honing these ploys in new contexts, Murdoch also created meta-patterns in which current problems had evolved from prior strategic moves. Murdoch's write-down of European sports-casting rights, for example, can be traced to battles between Fox, CBS and NBC in the early 1990s, which inflated bids (Chenoweth, 2001: 234) and sparked domestic turf wars (Chenoweth: 2001: 245).

Game Theory and Pragmatic Foresight

Murdoch's style of pragmatic foresight was imprinted by his Oxford University friendship with Robin Farquharson, the Voltaire Society secretary who introduced him to game theory and mathematical modeling (Chenoweth, 2001: 19). From 1953 onwards, Murdoch deployed game theory in a series of market stratagems that created his gambling aura (Chenoweth, 2001: 32). His North American phase was described as "a series of Houdini escape acts" that focused on the future of television programming (Chenoweth, 2001: 131). Understanding how game theory shaped deal negotiations and inter-firm competition enabled Murdoch to also shed people and outgrow ideologies when they became barriers (Chenoweth, 35: 2001).

The combination of game theory and pragmatic foresight shaped Murdoch's deal-making ruses with other media players: "there is always a second strand running below the public transaction, known only to insiders, and then there is a third strand running under that again which no one ever sees." (Chenoweth, 2001: xv). This combination makes Murdoch "more than just a clever dealmaker or financial tactician" and were crucial to his 1980s creation of Fox Networks, his 1990s creation of BSkyB and his constant reinvention (Chenoweth, 2001: xiii).

The 1994 acquisition of Ron Perelman's New World Communications, which "transformed Fox into a fully fledged network" (Chenoweth, 2001: 131), illustrated these three layers to a deal (Chenoweth, 2001: 133). The $2.48 billion stock deal was fixed on 14 July 1996 at US$27 per share (Chenoweth, 2001: 134). Murdoch knew that Perelman was negotiating another deal with King World Productions (which had increased the share offer by $366 million), that Australian fund managers would hate his buy-out and that they would likely dump the stock (Chenoweth, 2001: 135). Although rumors of Murdoch's tactics were circulating amongst the financial press on 16 July 1996 the deal was signed the following day. Murdoch's influence on the preference voting stock meant that New World's value fell by $344 million over the next week, canceling out Perelman's gambit (Chenoweth, 2001: 137). Murdoch's true reason for going short on Perelman's gambit was that he had taken out a A$373 million loan in March 1996 to buy-out his sisters' stake-hold in Cruden Investments and control News Limited’s succession planning (Chenoweth: 2001, 138).

Surviving the October 1987 crash

When Rupert Murdoch became an American citizen on 3 September 1985 to offset the Reagan Administration's stance on foreign ownership, his 'virtual' nationality hid financial and legal problems with the Australian Tax Office (Chenoweth, 2001: 52). Murdoch gave different testimony to the Federal Communications Commission and the U.S. Securities and Exchange Commission about his 1985 purchase of Metromedia television stations (Chenoweth, 2001: 53). He had formed a strategic alliance with junk bond dealer Michael Milken, who devised a $1.15 billion preference issue for News Limited to purchase Metromedia (Chenoweth: 2001, 62-64). Repaying Milken's debt was tied to News Limited's future stock price.

Murdoch missed News Limited's annual general meeting in Adelaide on 16 October 1987 (Chenoweth, 2001: 77). He was attending producer David Brown's book launch and a Forbes 400 party (Chenoweth, 2001: 78-79). Black Monday, on 18 October 1987, would cost Murdoch $1.7 billion (Chenoweth, 2001: 80). His fateful decision to remain in New York City would stall News Limited's crisis management.