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THE BIG PICTURE

Rupert Murdoch rolls the dice at News Corp.

March 14, 2009|PATRICK GOLDSTEIN

Like him or loathe him, Rupert Murdoch is the last of the great media swashbucklers, a throwback to the pirates, cutthroats and visionaries who used to run the business before it was engulfed and devoured by giant risk-averse corporate behemoths. The earthquake that rocked News Corp. this week was a typical Murdoch seismic event. As one of his top executives once told me: "Rupert is a gambler. He tolerates noble failure more than complacency."

More than anything else, that maxim seems to best explain the dramatic moves Murdoch made Thursday. Before his longtime No. 2 man Peter Chernin had finished cleaning out his desk, Murdoch boldly revamped his company's executive superstructure. There were many moves in Rupert's chess game, but the key ones were all about Murdoch's lucrative but endangered profit center: the Fox TV business. He essentially has taken three executives who had great success propelling Fox film divisions and installed them in positions of power, running the TV wing of the empire.

20th Century Fox Co-Chairmen Jim Gianopulos and Tom Rothman, who've presided over the most disciplined and profitable movie studio of the past decade, will now also oversee TV production along with a host of Chernin's former duties, most crucially much of News Corp.'s new media ventures. This includes online media ventures such as Hulu that Chernin had practically willed into existence when most established media companies were still obsessed with suing YouTube and keeping their most valued programming off the Internet.

I've been tough on them over the past year, but giving Rothman and Gianopulos more clout was a no-brainer -- they've earned it. Murdoch's most unorthodox move is the promotion of Peter Rice, until now the head of the Fox Searchlight specialty film division, who will run the Fox TV network. Hugely successful as a specialty division czar, having made or acquired such hits as "Sideways," "Napoleon Dynamite," "Little Miss Sunshine," "Juno" and this year's Oscar winner, "Slumdog Millionaire," Rice has always been Rupert's fair-haired boy. For a man whose relationships with his own sons have blown hot and cold, with the offspring often chafing under their father's rule, Rice has been the good, dutiful son, his relations with Rupert unburdened by blood relations.

Very buttoned-down, always wary of the media spotlight, Rice plays his cards close to the vest. Even when he was having lunch with an old friend this week, he acted as if he was staying put, saying he felt most comfortable remaining at Searchlight. But Murdoch clearly wanted to give Rice a bigger portfolio. He's quietly made himself an indispensable News Corp. player, careful enough not to seek credit for his triumphs, shrewd enough to avoid the blame for his rare missteps, such as Fox Atomic, the genre division that was a very quiet failure.

Running Fox's TV division, Rice will either succeed or fail in a very public way, since most Fox insiders see him as Chernin's eventual successor as Rupert's right-hand man. At 42, Rice is closer in age to Rupert's sons and daughter (we're not counting the toddlers Murdoch has from his most recent marriage), making him a generational choice as well, since he will surely someday be working alongside whichever one of the Murdoch offspring ends up inheriting the empire after their father's death or retirement.

So why put the future of the TV network, the empire's most valuable resource, in the hands of a TV neophyte? Murdoch is a gambler, with a gambler's instincts. As anyone in the media game will tell you, the network TV model is broken, on the brink of collapse, just as the newspaper business and the music industry before it. It is no longer time for incremental fixes; radical change is needed. That's what Rice is there to provide. If you believe in upending the entire business, searching for a new economic model, you don't hire a solid, experienced veteran, you hire an outsider who's not tied to the old ways of thinking. In Murdoch's announcement, he didn't say Rice was the right person to "run" the TV business; he said he was the right person to "transform" it.

Murdoch has looked at the TV business and seen the obvious: TV's old mass audience is quickly migrating to YouTube, Hulu and Pirate Bay. The TV models that still work are niche businesses, cable channels that appeal to specific audiences, not the vast mainstream wasteland. The executive who Murdoch ousted Thursday was Peter Liguori, who'd done a great job reinventing Fox's FX cable channel but couldn't get any traction running the network. I suspect Rice will learn from Liguori's experience. He will have to find a way to rethink and reinvent network TV, finding a way to free it from the old mass-audience model that -- with rare exceptions such as Fox's own "American Idol" -- is going, going, gone.

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