Rupert Murdoch's Chinese dreams never became a reality

By Juliana Liu
Business reporter, BBC News

Image caption,
Rupert Murdoch has been married to Wendi Deng since 1999

When a protester tried to cover Rupert Murdoch with shaving cream as he appeared before MPs at the Houses of Parliament, his wife sprang to his defence.

But despite her quick reflexes and canny instincts, Wendi Deng has not been able to help Mr Murdoch succeed in mainland China, the place of her birth.

"News Corp never made any headway at all in terms of getting its own channel in China," says Doug Young, who teaches journalism at Fudan University in Shanghai.

"It was one of the most aggressive media companies, in terms of being willing to delve into the grey areas to do business," he added. "But the strategy backfired."

Over a period of almost 20 years, Mr Murdoch travelled regularly to China and assiduously courted its leaders, in the hope of creating a truly global satellite network.

But last August, News Corp announced it was selling controlling stakes in three of its Chinese television channels to a domestic private equity fund based in Beijing and Shanghai.

News Corp currently owns 47% of Star TV China, and 17.6% of Phoenix TV, a popular Hong Kong-broadcaster.

Optimistic times

It was not supposed to be this way.

In 1993, Mr Murdoch purchased Hong Kong-based Star TV for almost $1bn (£620m) from Richard Li, son of Asia's richest man, Li Ka-shing.

Star TV was then broadcasting across Asia, according to Vivek Couto, a media analyst at Media Partners Asia.

"In the 1990s, nothing was regulated in China," he says, explaining why Western media giants were so optimistic about the mainland market.

Image caption,
Mr Murdoch has tried to woo the Chinese authorities in an attempt to enter the country's lucrative market

Mr Murdoch is believed to have met Wendi Deng, then working for Star TV, in 1997. They married two years later.

At the time, China was in talks to join the World Trade Organization.

It seemed to be on the cusp of opening its domestic market to foreigners, a dream cherished by the West ever since Lord Macartney led a British delegation to see the Qianlong Emperor in 1792.

Besides News Corp, Time Warner, Viacom and Disney were all poised to break into China, to take advantage of a market with a population of 1.3 billion people.

So, foreign broadcasters were elated when, in 2003, they were granted rights to broadcast to the wealthy Cantonese-speaking province of Guangdong.

It was the first step, they believed, in gaining so-called "landing rights" in the rest of the country.

Media ban

But just two years later, their hopes were dashed.

In 2005, China's broadcast regulator, the State Administration of Radio, Film and Television, published new regulations forbidding foreign stations from buying domestic channels and other media outlets.

The move was seen as Beijing's effort to maintain control over what its people can see and read.

News Corp was forced to cancel a landmark joint venture with Qinghai Satellite Television, a provincial broadcaster.

The station was expected to broadcast across the country.

Mr Couto, the media analyst, says News Corp had to write off the $50m (£31m) venture.

Since her marriage to Mr Murdoch, Wendi Deng has been a director of the Chinese edition of social networking website MySpace.

MySpace was sold this year after unsuccessful attempts to revive the brand.

Despite their best efforts, the Murdochs' attempts to break into China have been hampered by legal restrictions and other obstacles.

As to when China may loosen its media controls, Mr Couto says: "Maybe 10 to 20 years? It's definitely something for our children to see."