Each of the nine tv monitors dominating the office wall was turned to a different channel, but the man holding the remote control was still switching briskly, his eyes flicking from screen to screen.

Watching the war coverage in his sumptuous Manhattan office, Rupert Murdoch looked very much the battle-hardened commander, stalwart and steely-eyed. Indeed, the 59-year-old media lord is just emerging from his own fiscal wars – the toughest of his career. And worried as he is about the strife in the Gulf, he is confident that he has won his own private campaign.

Shares of his News Corp. are still showing volatility on some world markets, but Murdoch is convinced that the skeptics, manipulators and short-sellers have been put to rout.

“This has been a chastening experience,” says Murdoch with a pained smile. “There have been, shall we say, some unpleasant moments.”

The bottom line, he insists is that 97% of the 176 banks covering 99% of the funding are supporting the restructuring of News Corp.’s $6.8 billion debt. A bridge loan of $600 million is part of the deal. The bankers, he says, are persuaded that the income is at hand to meet the obligations. While some minor assets will be disposed of, the core business is strong – indeed the potential for growth is formidable.

Crunch time for Rupert Murdoch has now passed. He acknowledges it has been a daunting experience.

“I have always felt my specialty was operating a media company,” he remarks, sipping a cup of tea. “I did not think I would spend three months of my life in constant dialog with bankers.” Reflecting on the ordeal, Murdoch admits he was astonished at the volatility of the markets. At the peak of the trading fever, he’s convinced, that speculators were feeding negative items to the Wall Street Journal and other papers to drive down News Corp. stock. Some 40% of the capitalization of the company effectively disappeared in one trading week. It was a feeding frenzy for short-sellers.

Though stretched by the recession and setbacks in some ventures, Murdoch is adamant about the health of his company. He denies reports that his company was at any time “in breach of covenants” in connection with any of its loan commitments. Nor did it “revise” any of its profit statements, he said, explaining that the recent filing with the SEC appeared to be lower than earlier filings with Australian authorities only because of differences in accounting methods in the two countries. Nor did it “wipe” anything off its balance sheets, he said. Nor did it “write down” any assets.

While there are abstruse differences between U.S. and Australian accounting standards, he asserts, his company’s reporting has been both consistent and in conformity with SEC regulations.

The experiences of the past months, he reflects, have provided him with a vivid introduction to the 1990s. “We’ll have to tighten our businesses, to look hard at overheads,” says Murdoch. “We will come out of this leaner and more profitable.”

Paradoxically, it was in the midst of the banking crunch when Murdoch and his key associate, Barry Diller, got word of their biggest bonanza – one they hope will prove a portent for the decade ahead. Fox’ $18 million film, “Home Alone,” was not only the runaway hit of the Christmas season but could, by Diller’s estimation, bring in $225 million in U.S. business and another $65 million overseas. This excludes Japan, where still greater results could be registered.

Given the film’s relative low cost and modest profit participations, Murdoch and Diller are positively aglow about the revenues that the film could bring to the company in film, video and even in Sky-BSB, the newly merged satellite service.

And there’s more in the pipeline. Though Fox released only eight movies during the last fiscal year, that total will increase to 21 this year, Diller points out. While the company cannot hope to replicate the “Home Alone” grosses, it can nonetheless hold to its budget range. Only “Aliens III” will exceed the $40 million range this year, days Diller, while most other films will come in at half that budget.

With the CBS/Fox video operation dissolving and no locked-in partnerships in existence overseas, “we are going to keep our options open,” Diller says with a twinkle in his eye. The “options” clearly will entail some surprises in video and foreign distribution.

There will be surprises at Fox’ tv network, Diller says, alluding to his recent programming vicissitudes. “The big lesson was that for three months we started to act like the other three networks,” Diller says portentously. “That will not happen again. We will begin to point in the opposite direction once again. Fox is really the only true independent company around and we must continue to act that way.”

As Barry Diller talks exuberantly about what he perceives to be the bright future of Fox tv and movies, Murdoch listens attentively, now and then inserting some supportive detail and data. When Diller shakes hands and departs for another meeting, Murdoch, however, moves on to other ventures – a new daily newspaper he’s starting in East Germany, a partnership deal for a printing facility in Europe.

In his heart, Murdoch is still the newspaper proprietor, the czar of the printed word. Yet his imagination is fired by the possibilities of the electronic media – even its costliest project – British Sky Broadcasting, which has been the object of a $300 million writeoff.

A thoughtful, cerebral man, one senses that the ordeal of the past months has reminded that the big dream, too, holds its lethal dangers. “There is not a single division of this company that won’t be operated more efficiently,” he says, almost to himself, as though some inner voice were chastising him for saying something as mundane, as “operational.”

Says one key aide: “The important news is that Rupert is smiling again. There have been two sightings today alone.”

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