Rupert Murdoch's Wife Wendi
Wields Influence at News Corp.
By JOHN LIPPMAN, LESLIE CHANG and ROBERT FRANK
Staff Reporters of THE WALL STREET JOURNAL
When News Corp. officials gathered in the Hong Kong convention center in March to unveil their latest Chinese Internet investment, a tall woman in their midst handed out a business card that read simply, "News Corporation/Wendi Deng Murdoch."
Ms. Deng is not a News Corp. employee. Once a junior executive at the company's Star TV unit in Hong Kong, the 31-year-old Ms. Deng quit her post before marrying News Corp. Chairman Rupert Murdoch last year. Since then, she has been portrayed -- by Mr. Murdoch and the company -- as a traditional housewife who attends to decorating, her husband's diet and the like.
But Ms. Deng is no homebody. Though she doesn't have a formal position with her husband's media empire, she has quickly asserted influence over News Corp.'s operations and investments in Asia, the most important growth market for the company.
Wendi Deng and Rupert Murdoch
Working with her stepson, James Murdoch, 27, Ms. Deng has initiated or advocated Chinese Internet investments totaling between $35 million and $45 million, according to a top News Corp. executive. With her advice, News Corp. has also formed partnerships with cable companies in the region looking to upgrade their systems for high-speed video and Internet access.
The elder Mr. Murdoch, who is 69, has never hesitated to put family members to work at his company. Last month, he named his eldest son, Lachlan, 29, deputy chief operating officer, in a move partly aimed at clarifying that he is his father's heir apparent. James serves as chief executive of Star TV and has carved out Asia and the Internet as his province. Even Mr. Murdoch's ex-wife, Anna Murdoch Mann, whom he divorced last year, has an office and assistant at News Corp.'s New York offices, although she no longer has an active role with the company.
Now, Ms. Deng is rising to a place of prominence in the family business. People within News Corp. and outsiders involved in the Chinese Internet and media industries say she identifies potential investments for her husband's company and acts as his liaison and translator in China.
These people say Ms. Deng is exceptionally well suited for this unusual role. The daughter of a factory director in Guangzhou, China, Ms. Deng came to the U.S. 12 years ago with the aid of a California couple. The husband in that couple later left his wife for the much-younger Ms. Deng. She mastered English, climbed from a California commuter college to Yale's business school and eventually landed at Star TV in Hong Kong.
Having left China in obscurity as a teenager, Ms. Deng is now returning in grand style, as the wife and counselor of a global media baron.
"Wendi gives News Corp. a Chinese face in China," says Joseph Ravitch, co-head of the global-media practice at Goldman Sachs Group Inc., who advises News Corp. on its Asia strategy. "She represents not just the company but the owner, and that's critical in a country where families are very important." Mr. Ravitch notes that Ms. Deng often spends "weeks at a time" in China and recently completed a 10-day stint there, brokering deals, while her husband was in New York and Europe.
She may have "no official role," says Star TV's president, Bruce Churchill, but Ms. Deng "is married to the chairman and chief executive of the company, so it seems natural that she has some voice in the business."
Ms. Deng declined repeatedly through a representative to be interviewed or to answer most of a list of written questions. Mr. Murdoch also declined repeated interview requests.
A spokesman for News Corp., Gary Ginsberg, says, "As the wife of the chairman and a private citizen, Wendi is entitled to her privacy." Ms. Deng's role at the company, the spokesman adds, is "minimal and confined to facilitating a few meetings in China and interpreting nuances of the Chinese market, which she is uniquely qualified to do." (News Corp. officially refers to the chairman's wife as "Mrs. Murdoch," but in media and Internet business circles, most people still call her Wendi Deng.)
Mr. Murdoch has long been fascinated by the potential of the China market and his Fox studio was a pioneer in doing business in the country. But at times, he has seemed to lack the feel for subtleties his wife is said to have.
In 1993, shortly after he acquired control of Star TV, Mr. Murdoch made a still-notorious remark that satellite television would prove "an unambiguous threat to totalitarian regimes everywhere." China immediately retaliated by banning private ownership of satellite dishes. Reception by private households of both Star TV and its affiliate, Phoenix Satellite Television, remains technically illegal in China, although many cable operators and residential compounds there defy the ban and carry the channels.
Mr. Murdoch gradually repaired relations with the Chinese. He pulled the British Broadcasting Corp. from Star TV, making the channel more palatable to the Beijing government. He sold the South China Morning Post newspaper to a pro-Beijing businessman. And at his behest, News Corp.'s HarperCollins publishing unit killed a book contract with the last governor of Hong Kong, Chris Patten, an antagonist of the communist regime. Today, News Corp.'s officially restricted Phoenix channel is a favorite among urban Chinese households, and the company has greater access to the mainland market than any of its competitors.
With the exception of an occasional mention in the newspaper gossip pages or a glossy magazine photo spread, Ms. Deng has stayed out of the public eye. She accompanies Mr. Murdoch on his frequent world-wide jaunts and stayed at his side when he received prostate-cancer treatment in Los Angeles earlier this summer.
Shortly after they were married in June 1999, Mr. Murdoch told Vanity Fair magazine that his relationship with his new wife precluded her from working for News Corp. Instead, Mr. Murdoch said, Ms. Deng was "busy working on decorating the new apartment" in Manhattan. He said his bride, a graduate of the Yale School of Management, was "a bit frustrated" by the narrow scope of her activities, adding, "we'll just have to resolve that somehow."
The resolution has taken Ms. Deng far beyond choosing upholstery or drapes. She has become a de facto diplomat on behalf of News Corp. in China, a country where good relations with government officials is critical to business success. Over the past year, she has met with politicians from President Jiang Zemin on down. In one of her few answers to written questions, Ms. Deng said through a representative that she had met the Chinese president only at large gatherings on "formal occasions." Ms. Deng also said she hadn't initiated any meetings with "top level" Chinese government officials.
The company's improved relations with China were in abundant evidence in May when the New York-based Asia Society, of which Ms. Deng is a trustee, sponsored a conference on entertainment and media in Asia on the lot of News Corp.'s Fox movie studio in Los Angeles. Ms. Deng attended with her husband. Also on hand to brief executives and entrepreneurs were senior Chinese government officials from the State Administration of Radio, Film and Television and representatives from China Central Television, China Radio International and the Ministry of Information Industries.
Smoothing Over Awkward Moments
In recent months, Ms. Deng has appeared with increasing frequency at the side of her husband and stepson James in News Corp. business meetings, according to other participants. She sometimes intervenes to smooth over potentially awkward situations, these people say. In March, for example, she and the father-and-son Murdoch team met a well-connected Chinese businessman in Shanghai, in hopes of advancing News Corp.'s push into the Chinese TV market. The meeting got off to an uncomfortable start, at least partly because of the language barrier between the Murdoch men and their host, according to a participant. But Ms. Deng used her bilingual fluency to put everyone at ease, according to the participant.
A Growing Asian Empire
News Corp.'s main assets focusing on China and other Asian markets:
Company News Corp.'s Stake Description
Star TV 100% A 27-channel pan-Asian satellite-broadcasting service that operates in 53 countries and seven languages.
ESPN Star Sports 50%* A six-channel sports service that broadcasts to Asian markets; jointly operated with ESPN Inc.
Channel V 87.5%* A satellite service that broadcasts six music channels across Asia.
Phoenix Satellite Television 37.6% An outfit jointly operated with Hong Kong-based partners and targeted at mainland China that includes satellite and movie channels, among other holdings.
Netease.com 8.5% A leading Chinese Internet portal.
renren.com 12% A "community"Web site that targets the international Chinese market.
SinoBIT.com 12% An Internet portal that seeks to link entrepreneurs and investors online.
Chinabyte.com 50% A joint venture with the People's Daily newspaper that focuses on the high-tech industry.
* News Corp. owns indirectly through Star TV
Source: News Corp.
Ms. Deng has become deeply involved in the company's analysis and negotiation of business transactions in China, according to people who have dealt extensively with News Corp. Entrepreneurs trying to interest the company in their ideas often go first to Ms. Deng, according to a person close to News Corp. She has told this person that she sometimes receives more than 100 e-mails a day from Chinese with business proposals. She sometimes meets entrepreneurs at News Corp.'s offices in Beijing or at one of the city's well-known business-gathering spots, such as the tony St. Regis bar.
News Corp. executives say that among the deals Ms. Deng has helped forge is a recent multimillion-dollar company investment in Netease.com, one of the most popular Web portals that target the mainland market. Earlier this year, she worked with James Murdoch to negotiate News Corp.'s investment of more than $10 million in the Chinese-language Internet company renren.com, according to Anthony Cheng, founder of the Web site. James Murdoch didn't respond to repeated interview requests.
Mr. Cheng recalls that at one meeting about renren.com, Ms. Deng displayed her deep involvement when she grilled him on the difference between the site's marketing strategies in Beijing and Shanghai. She calls him with ideas from time to time on how to improve his company, Mr. Cheng adds. "She's very keyed into all the News Corp. and Star TV properties and how to better link them," he says.
Ms. Deng initiated News Corp.'s investment last December in SinoBIT.com, a Beijing Web site that seeks to link entrepreneurs to investors online, according to Steve Sun, the site's co-founder. She did so by introducing Mr. Sun, whom she knew through mutual friends from Yale, to James Murdoch, Mr. Sun says.
At the same time, people who have done business with Ms. Deng say she appears to take great pains not to overstep her unofficial role. Mr. Sun notes, for example, that she didn't attend a second meeting between him and James Murdoch, at which the terms of the investment in SinoBIT.com were finalized. "She gave James the right to make the decision," Mr. Sun says.
SoHo and Turtlenecks
All the while, Ms. Deng hasn't neglected the business of minding Mr. Murdoch, who has undergone the kind of change in appearance often associated with a man's marrying a new and much-younger wife.
Mr. Murdoch for decades preferred establishment addresses such as New York's Upper East Side and Bel Air in Los Angeles. But after remarrying, he and Ms. Deng set up residence in Manhattan's trendy downtown SoHo district, a few blocks from the apartment of Mr. Murdoch's son, Lachlan. Known for his British-style double-breasted business suits, the elder Mr. Murdoch suddenly started sporting black turtlenecks on some social occasions. News Corp. executives say that sometimes he even forgoes a tie at the office, which was once unthinkable. He told Vanity Fair that he is pumping iron with a personal trainer at 6 a.m. and downing a morning concoction of fruit and soy protein.
When Ms. Deng began appearing at Mr. Murdoch's side about two years ago, News Corp. executives wondered where she had come from and how she got there. They knew nothing about her other than that she joined Star TV as an intern in 1996, shortly after obtaining an M.B.A. from Yale. Ms. Deng herself hasn't commented in the press about her background.
From Guangzhou to L.A.
Born Deng Wen Di, in the eastern Chinese city of Xuzhou, her parents later moved to the southern city of Guangzhou. Deng was the family name. She later compressed her Chinese first name into "Wendi."
Ms. Deng's father served as director of a machinery factory in Guangzhou. The family lived in a three-bedroom apartment, which was unusually large by Chinese standards. Wendi Deng has two sisters and one brother. A good student and champion volleyball player, Ms. Deng was enrolled in Guangzhou Medical College by the age of 16.
Her ticket out of China came in 1987, when she met a Los Angeles couple, Jake and Joyce Cherry. Mr. Cherry, then 50, was working in Guangzhou, helping the Chinese to build a factory to make freezers for food-processing plants. The Cherrys' interpreter told them of a young woman who was looking for help with her English. Mrs. Cherry, then 42, says she began tutoring the teenager. In the fall of 1987, Mrs. Cherry returned to Los Angeles to enroll her two children in elementary school. Mr. Cherry stayed in China to finish the factory project.
Soon after Mrs. Cherry was resettled in Los Angeles, she says, her husband called to say that Ms. Deng wanted to come to the U.S. to study. He asked Mrs. Cherry to help complete the paperwork and get an application ready for a local college. The Cherrys sponsored Ms. Deng's bid for a student visa and agreed to put her up until she had established herself. The 19-year-old arrived at the Cherry home in February of 1988. She shared a bedroom and bunk bed with her hosts' five-year-old daughter.
All was not well, however, between the elder Cherrys. Mr. Cherry, who arrived home shortly after Ms. Deng came to California, had grown physically ill in China from a combination of overwork and poor diet. The spouses' separation had strained the marriage, the Cherrys concur.
At the same time, Mrs. Cherry says she had grown increasingly suspicious about Ms. Deng's relationship with her husband. Mrs. Cherry recalls discovering a cache of photographs her husband had taken of Ms. Deng in coquettish poses back in his hotel room in Guangzhou. Mr. Cherry confirms he had become infatuated with the young woman. Once they were in Los Angeles, he says, Ms. Deng started making recommendations about his diet and wardrobe.
When her husband and Ms. Deng didn't return home some evenings, Mrs. Cherry says she concluded they were having an affair. She told Ms. Deng to leave, and Mr. Cherry departed soon afterward. He moved into a nearby apartment with Ms. Deng, who had enrolled at California State University at Northridge, a commuter college in the San Fernando Valley.
The Cherrys divorced, and Jake Cherry married Ms. Deng in February 1990. But that union didn't last.
Mr. Cherry says that about four months after the wedding, he told Ms. Deng to leave because she had started spending time with a man named David Wolf. Mr. Cherry was 53 at the time. Mr. Wolf was in his mid-20s, only a few years older than Ms. Deng.
Mr. Wolf, who declined repeated interview requests, worked in the early 1990s for an import-export company. He spoke some Chinese and was interested in a career in China, according to a person who knew him at the time.
Mr. Cherry says he and Ms. Deng briefly reconciled at one point, but they split for good when it became clear she was continuing to see Mr. Wolf. "She told me I was a father concept to her, but it would never be anything else," Mr. Cherry recalls. "I loved that girl."
Divorce records filed with the Los Angeles County Superior Court show that the Cherry-Deng marriage lasted two years and seven months. That was seven months longer than what was required for Ms. Deng to obtain a "green card," allowing her permanently to live and work in the U.S. as a resident alien. Mr. Cherry says he and Ms. Deng actually lived together for "four to five months, at the most." They haven't spoken since 1996, he adds.
During the period in the early 1990s when she was married to Mr. Cherry, and for a time after that, Ms. Deng at least on some occasions introduced the tall, well-dressed Mr. Wolf as her husband, according to people who knew Ms. Deng. Ken Chapman, a California State economics professor, recalls that the last time he saw his former student, in 1995, she handed him Mr. Wolf's business card and said she could be reached through her "husband."
At 5'10" herself, Ms. Deng and Mr. Wolf made a striking couple, according to people who knew them. They shared several addresses during the 1990s and told friends they had met in China, when Mr. Wolf had been there on business. For a time in the early 1990s, the couple worked at a suburban Los Angeles gymnastics academy operated by Li Ning, a three-time Chinese Olympics gold medallist. Ms. Deng served as a liaison between the gym's Chinese coaching staff and parents of the school-age clientele; Mr. Wolf, as the gym's general manager. Today, Mr. Wolf works as a director in the Beijing office of Burson-Marsteller, a large public-relations firm.
While a student at California State in the early 1990s, Ms. Deng and three other undergraduates formed a quartet that is recalled on the Northridge campus as the most talented group ever to pass through the school's economics department, according to Prof. Daniel Blake. The four students, who often ate and studied together, collaborated on a major written project analyzing the effect of fiscal policy on the U.S. economy.
Mr. Blake recalls that in a recommendation he wrote for Ms. Deng's application to Yale's business school, he called her a "super student, very focused on her studies." He predicted that Ms. Deng "would play a role in the opening up of China" to Western businesses.
During her four years at California State, her friends and professors say, Ms. Deng's command of spoken English improved dramatically. She chose to go to business school at Yale, says Mr. Blake, because of the international emphasis of its M.B.A. program.
In 1996, Ms. Deng graduated from Yale and began looking for a job. Through a mutual friend, she met Bruce Churchill, who then oversaw finance and corporate development at News Corp.'s Fox TV unit in Los Angeles. She lacked experience in the entertainment industry, but her credentials otherwise were impressive. She had an Ivy League business degree and was fluent in English and Mandarin, attributes of particular value to an outfit like News Corp.'s struggling Asian satellite service, Star TV. Mr. Churchill, who was on his way to Star TV as deputy chief executive, offered Ms. Deng an internship in Hong Kong. That grew into a full-time job.
Even though Ms. Deng was a relatively junior employee, she took an active role in planning Star TV's activities in Hong Kong and China, according to former News Corp. colleagues. She helped build distribution in China for Star's Channel V music channel, for example, and explored interactive TV opportunities for the company's News Digital Systems unit.
Former colleagues describe Ms. Deng as having been adept at juggling the interests of News Corp.'s various units, which like to operate independently. She is depicted as having been well prepared for meetings and anything but shy. She is said to have shown no hesitation about walking unannounced into a senior executive's office to discuss the latest Chinese entrepreneur she had met or government official she had contacted.
Rupert Murdoch frequently talks with News Corp.'s business-development executives around the globe, so it isn't surprising that one day he would cross paths with Ms. Deng. In early 1998, she first appeared at his side, acting as his interpreter when he traveled to Shanghai and Beijing.
By the summer of 1998, the Star TV staff was buzzing about romance between the pair. After dinner meetings in Hong Kong, they were observed holding hands. In May, Mr. Murdoch had separated from his wife of 31 years, Anna. The split surprised even his closest aides, who say they hadn't seen any sign of a rupture.
Mr. Murdoch told senior Star TV executives in the fall of 1998 that his relationship with Ms. Deng was "serious." Star TV's then-chairman, Gareth Chang, told Mr. Murdoch at the time that it was a bad idea for Ms. Deng to remain on staff, given her personal relationship with the parent company's chairman. That wouldn't be a problem, Mr. Murdoch replied, because Ms. Deng would be resigning and moving with him to New York.
Today, Rupert and Wendi Murdoch spend time not only in SoHo, but also at their home in Bel Air and a ranch near Carmel, Calif. Mr. Murdoch controls about 30% of News Corp., a stake worth roughly $8.7 billion. He has said the stock is owned by trusts that name his three children as beneficiaries.
Rupert and Anna Murdoch's divorce became final in June 1999, about a year after their official separation date. Negotiations over a divorce settlement dragged on for nearly 12 months, as Anna Murdoch's lawyers tried to determine the extent of News Corp.'s global assets. Financial terms of the settlement weren't made public, but the Murdochs have said they were in agreement on one crucial point: that their children eventually would gain control of the company. Anna Murdoch five months later married widower William Mann, chairman of Henry Mann Securities Corp. in New York.
Rupert Murdoch and Wendi Deng were married on June 25, 1999, 17 days after his divorce became final. The twilight ceremony took place on Mr. Murdoch's garland-bedecked yacht, the Morning Glory, in New York Harbor. Welsh singing star Charlotte Church serenaded the couple with a trio of ballads. Among the 82 guests were Mr. Murdoch's three children and friends such as financier Michael Milken and Russian tycoon Boris Berezovsky. Also on board was Valeria Wolf, the mother of David Wolf. News Corp. later posted a photograph of the newlyweds on the company Web site.
Now that happy moment between the time the lie is told and when it is found out.