Date: 3.08.99
Anthea Disney greets me in her mid-Manhattan office at media giant News Corp. I dare to ask for a drink of water; after getting it for me, she coolly clunks it down. No waitress, she. Then she paces about, putting on lipstick; there's no eye contact between us. This protg of Rupert Murdoch is on her way to a new position in the company, and her anxiety shows. During lunch she admits: "Whenever I get hurled [into a new job by Murdoch], I always think this is the one I'm going to screw up."
Today Disney, 52, is chairman and chief executive of News America Publishing Group, the book, magazine and digital division that generates $1.7 billion in sales a year. But soon she'll have a key role in a new Murdoch venture involving the venerable TV Guide.
In 1988 Murdoch paid Walter Annenberg a hefty $2.8 billion for TV Guide and some other media properties. He probably paid too much but is doing his best to salvage the deal. Last summer he pushed TV Guide into the digital future by contributing it to a joint venture with United Video Satellite Group, an arm of AT&T's Tele-Communications, Inc. TV Guide's operations, which include a Web site and an electronic program guide, are being combined with the Prevue Channel, a passive electronic listing available to 53 million cable subscribers. The combined entity will be taken public this spring. News Corp. will own 49%.
The word is that Anthea will, perhaps, take the top job. "If so, I will fake it until I can do it," she says. "When I was made a TV producer, I had no experience in TV. Rupert said, 'Oh, you can do that.' When I was put in charge of HarperCollins, I'd never run a business. He said, 'Oh, you'll do fine.' That's the way he does things, he bets on the person."
Disney is a native of Surrey, England; her family was one of the first in the neighborhood to own a TV. Her father was in the television manufacturing business; she started her career in 1969 as a Fleet Street journalist fetching tea. When she landed her first big story, about racial discrimination, she began to be taken seriously.
Anthea has reason to be uneasy. She knows how the press can paint business executives with a dark brush. Why is she talking now? "My job is to make people understand what we're doing and try to explain that he [Murdoch] is not Darth Vader." As chief executive of HarperCollins Publishers, Disney was dubbed Murdoch's Angel of Death. Why? Well, to bring the company back to its present salubrity, she dared to cancel a hundred book contracts with the publisher's stable of authors. "At the time it didn't seem like such a big deal," she says. "It seemed blindingly obvious, yet I was treated like a war criminal."
In 1996, when she took control of Harper, its operating income was down 82% from the year before, to $11 million. Revenue was down 23%, to $946 million. And the return rate for unsold books was a deadly 40%. "I said we'll publish fewer books, which was barely brilliant because everyone else in publishing was doing the same thing. We would concentrate on where we had skills and be able to properly market the books." I teasingly accuse her, as others have, of destroying the sacred bond between writer and editor.
First a frown, then a stare and finally she smiles. "That 'sacred' bond is so ridiculous. To be very kind, the books that were canceled were not distinguished. It was not a blow to literature." (One victim was a contract for a gelatin cookbook.)
She goes on: "The answer is, we are making money, we are profitable, and however misunderstood, we are poised to grow." The book return rate improved to a more normal 25%. Operating income recovered to $37.5 million on $1 billion of revenue in the fiscal year that ended last June. But that's still less than 2% of News Corp.'s $2 billion in operating income. Why would Murdoch want something that contributes only nickels and dimes to his income statement?
"No. 1, it fits in," she says, "There are synergies. Second, Rupert likes books. He reads books. He enjoys having [a publishing house] -- it makes him feel good."
My ears perk up. "News Corp., a public company, owns book publishing because it makes Rupert feel good?"
"Yes," she says. "It's not a disaster. No reason to unload it. When you're running lots of businesses, some make lots of cash flow and some don't. Some make steady profits and some don't. We are a content company. Rupert sees HarperCollins as a successful content company."
Anthea and Rupert have known each other for years, running each other in New York bars like Costello's where newspaper people hung out. Murdoch would be sitting with his sleeves rolled up, planning America's The National Star. Disney was at the London Daily Mail as a foreign correspondent based in New York. "After a flight from somewhere, I'd grab a white wine and chat with my pals. Murdoch was approachable." She left the Daily Mail at age 33 to edit Us magazine and, later, Self, in New York. Si Newhouse canned her from Self in 1990.
Luckily her New York bar acquaintance came calling. They hit it off.
Both were nurturing dreams of starting a picture-oriented news magazine. Murdoch hired her shortly thereafter to plan the new magazine, but it never got off the ground. Eventually, she wound up at TV Guide, where disaster loomed: The debt load that News Corp. took on to acquire the Annenberg properties almost sank the company. To make matters worse, in 1991, three years after Murdoch bought it, TV Guide was losing ground.
Rupert asked Anthea what she thought of the magazine. She replied that it was small and a bit irrelevant. So she got the job as editor in chief. During the next five years Disney introduced a redesign and added more serious journalistic pieces. Circulation stuck around 11 million, but ad revenue rebounded to $407 million in 1995 from $279 million in 1991.
She did not, that is, reverse TV Guide's slide in circulation, from a peak of 17 million in the 1970s. Disney's cold calculation: "TV Guide is declining, just as the broadcast networks are. But it doesn't mean the magazine goes away. There will always be people who want their printed TV schedules to get out their yellow highlighter." In fact, the digital age may be an opportunity: "In this environment of 100 to 500 channels, you need to find your way."
Disney is going to provide that guidance in her new job. Essentially, the cable Prevue Channel has become the TV Guide channel. There is also TV Guide Interactive, an on-screen electronic program guide, which goes to 1.1 million households via a set-top box. Meanwhile, News Corp.'s current Web site TVGen becomes TV Guide Online. Says Disney: "It springs TV Guide out of the straitjacket to become a real brand with real brand extensions."
In the new company, TV Guide Interactive becomes even more interactive. The guide will deliver movie trailers on demand; TV mail, which will enable subscribers to contact other subscribers with instant messages on the screen; and home shopping. "But it doesn't take any work," she promises. "You could operate it with a beer in your hand."
We trot to her office for a demo. On the way she points to an open door and jokes: "That's Darth Vader's office." Once in her office, she slips a videotape into a VCR. The sound doesn't work right. We hear a breathy scene from an afternoon soap while we see the guide on the screen. She points the remote and starts clicking like mad, getting frustrated. We finally give up and go to the next demo. For all this TV guidance, as she calls it, subscribers will pay only a modest amount on their cable bill. TV Guide Inc. will receive fees from cable operators and from selling advertisements.
"We found out that the possibility of missing a show creates anxiety for viewers -- which obviously we'd like to encourage," she says devilishly. "We like anxiety in this world."
Let's talk about anxiety. How about those Murdoch kids?
James Murdoch, 26, the most wired Murdoch, worked for Disney on TVGen. Roaming elsewhere in the company are the other two Murdochs -- Elisabeth, 30, and Lachlan, 28. Says Anthea cheerfully, "They are breathing down my neck and will undeniably overtake me." In fact, they are right on her heels. Lachlan was recently named a senior executive of HarperCollins and other publishing properties.
"People fawn all over the kids," she says sympathetically. "Either they want to lick them to death or murder them." At this point she begins to freeze up a bit, making eye contact with the wall. "They were accelerated into their jobs, but all three would have arrived there, ultimately, because they've got the genes and pressure to perform."
The Angel of Death wasn't so scary after all. "I live with small aspirations," she says with what seems a very honest sigh. "I don't want to run countries or become a corporate superstar. My aspiration is not to screw this up."
She probably won't.
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