The Wall Street Journal
Rupert Murdoch’s Wife
Wendi Wields Influence at NewsCorp.
November 2, 2000
By John Lippman, Leslie Chang and Robert Frank
WHEN NewsCorp officials gathered in the Hong Kong convention center last March to unveil their latest Chinese internet investment, a tall woman handed out a business card that read “News Corporation/Wendi Deng Murdoch.”
Deng is not a NewsCorp employee. Once a junior executive at the company’s Star TV in Hong Kong, Deng, 31, quit her post before marrying NewsCorp chairman Rupert Murdoch last year. Since then, she has been portrayed ¾ by Murdoch and the company ¾ as a traditional housewife who attends to decorating, her husband’s diet and the like.
But Deng is no homebody. Though she doesn’t have a formal position with her husband’s media empire, she has quickly asserted her influence over NewsCorp’s operations and investments in Asia, its most important growth market. Working with her stepson, James Murdoch, 27, Deng has initiated or advocated Chinese internet investments totaling between $35 million and $45 million, according to a top NewsCorp executive. With her advice, the company has also formed partnerships with cable companies in the region looking to upgrade their systems for high-speed video and internet access.
Murdoch, who is 69, has never hesitated to put family members to work in his businesses. 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. James serves as chief executive of Star TV and has carved out Asia and the internet as his province. Even Murdoch’s ex-wife, Anna Mann, whom he divorced last year, has an office and assistant at NewsCorp’s New York offices, although she no longer has an active role with the company.
Now, Deng is rising to a place of prominence in the family business.
People within NewsCorp 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 Deng is well suited for this unusual role. The daughter of a factory director in Guangzhou, China, 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 Deng. She mastered English, climbed from a California college to Yale’s business school and eventually landed at Star TV in Hong Kong.
Having left China in obscurity as a teenager, Deng is now returning in grand style, as the wife and adviser of a global media baron.
“Wendi gives NewsCorp a Chinese face in China,’ says Joseph Ravitch, co-head of the global media practice at Goldman Sachs Group, which advises NewsCorp 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.’
Murdoch has long been fascinated by the potential of the Chinese market, and his Fox studio was a pioneer 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, Murdoch made a still-notorious remark that satellite TV would prove “an unambiguous threat to totalitarian regimes everywhere’.
China immediately retaliated by banning private ownership of satellite dishes. Reception by private households of Star TV and its affiliate, Phoenix Satellite Television, remains illegal in China, though many cable operators and residential compounds defy the ban and carry the channels.
Murdoch gradually repaired relations with the Chinese. He pulled the BBC from Star TV, making the channel more palatable to the Beijing government. He sold the South China Morning Post to a pro-Beijing businessman. And at his behest, NewsCorp’s HarperCollins publishing unit killed a book contract with the last governor of Hong Kong, Chris Patten. Today, NewsCorp’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 odd mention in the newspaper gossip pages or a glossy magazine photo spread, Deng has stayed out of the public eye. She accompanies Murdoch on his worldwide jaunts and stayed at his side when he received prostate cancer treatment last summer.
Shortly after they were married in June 1999, Murdoch told Vanity Fair magazine that his relationship with his new wife precluded her from working for NewsCorp. Instead 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 Deng far beyond choosing upholstery. She has become a de facto diplomat on behalf of NewsCorp in China, a country where good relations with government officials is critical to success. Over the past year, she has met with politicians from President Jiang Zemin down. In one of her few answers to written questions, Deng said she had met the Chinese president only at large gatherings on “formal occasions.” Deng also said she hadn’t initiated any meetings with “top level’ Chinese government officials.
In recent months, Deng has appeared with increasing frequency at the side of her husband and stepson James in NewsCorp business meetings. She sometimes intervenes to smooth over potentially awkward situations. In March, for example, she and the father-and-son Murdoch team met a well-connected Chinese businessman in Shanghai, in the hope of advancing NewsCorp’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 Deng used her bilingual fluency to put everyone at ease,.
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 NewsCorp. Entrepreneurs trying to interest the company in their ideas often go first to Deng, according to a person close to NewsCorp She has told this person she sometimes receives more than 100 emails a day from Chinese people with business proposals. She sometimes meets entrepreneurs at NewsCorp’s offices in Beijing or at one of the city’s business- gathering spots, such as the St Regis bar.
NewsCorp executives say that among the deals 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. Earlier this year, she worked with James Murdoch to negotiate NewsCorp’s investment of more than Dollars 10m in the Chinese-language internet company renren.com, according to Anthony Cheng, founder of the website. Cheng recalls that at one meeting about renren.com, 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, Cheng adds. “She’s very keyed into all the News Corp and Star TV properties and how to better link them,’ he says.
Deng initiated News Corp’s investment last December in SinoBIT.com, a Beijing website that seeks to link entrepreneurs to investors online, according to Steve Sun, the site’s co-founder. She did so by introducing Sun, whom she knew through mutual friends from Yale, to James Murdoch, Sun says. At the same time, people who have done business with Deng say she appears to take great pains not to overstep her unofficial role. 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,’ Sun says.
Deng hasn’t neglected the business of minding Murdoch, who has undergone the kind of change in appearance often associated with a man’s marrying a much younger wife.
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 Deng set up home in Manhattan’s trendy SoHo district, a few blocks from the apartment of Murdoch’s son, Lachlan. Known for his British-style double-breasted business suits, the older Murdoch started sporting black turtlenecks.
NewsCorp executives say that sometimes he even forgoes a tie at the office, once unthinkable. He told Vanity Fair he is pumping iron with a personal trainer at 6 a.m. and downing a morning concoction of fruit and soy protein.
When Deng began appearing at Murdoch’s side about two years ago, NewsCorp 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 MBA from Yale. Deng herself hasn’t commented in the press about her background.
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.” Deng’s father served as director of a machinery factory in Guangzhou. The family lived in a three-bedroom apartment, unusually large by Chinese standards. Wendi Deng has two sisters and one brother. A good student and champion volleyball player, Deng had 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. 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. Joyce Cherry, then 42, says she began tutoring the teenager. In the fall of 1987, Joyce Cherry returned to Los Angeles to enroll her two children in elementary school. Cherry stayed in China to finish the factory project.
Soon after Joyce Cherry was resettled in Los Angeles, she says, her husband called to say that Deng wanted to come to the U.S. to study. He asked Joyce Cherry to help complete the paperwork and get an application ready for a local college. The Cherrys sponsored 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 beds with her hosts’ five-year-old daughter.
All was not well, however, between the elder Cherrys. Cherry, who arrived home shortly after 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, Joyce says she had grown increasingly suspicious about Deng’s relationship with her husband. She recalls discovering photographs her husband had taken of Deng in coquettish poses in his hotel room in Guangzhou. Cherry confirms he became infatuated with the young woman. Once they were in Los Angeles, he says, Deng started making recommendations about his diet and wardrobe.
When her husband and Deng didn’t return home some evenings, Joyce says she concluded they were having an affair. She told Deng to leave, and Cherry left soon afterwards. He moved into a nearby apartment with Deng, who had enrolled at California State University at Northridge, a commuter college in the San Fernando Valley.
The Cherrys divorced, and Cherry married Deng in February 1990. But that union didn’t last. Cherry says that about four months after the wedding, he told Deng to leave because she had started spending time with a man named David Wolf. Cherry was 53 at the time. Wolf was in his mid-twenties, only a few years older than Deng. Wolf, who declined interview requests, worked in the early Nineties for an import-export company. He spoke some Chinese and was interested in a career in China, according to someone who knew him.
Cherry says he and Deng were briefly reconciled at one point, but they split up for good when it became clear she was continuing to see Wolf. “She told me I was a father concept to her, and it would never be anything else,” 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 Deng to obtain a green card, allowing her permanently to live and work in the U.S. as a resident alien. Cherry says he and Deng actually lived together for “four to five months, at the most.”
They haven’t spoken since 1996, he adds.
During the early Nineties when she was married to Cherry, and for a time after that, Deng on some occasions introduced the tall, well-dressed Wolf as her husband, according to people who knew Deng. Ken Chapman, a California State economics professor, recalls that the last time he saw his former student, in 1995, she handed him Wolf’s business card and said she could be reached through her “husband.” At 5’10” herself, Deng and Wolf made a striking couple, according to people who knew them. They shared several addresses during the Nineties and told friends that they had met in China, when Wolf had been there on business.
For a time in the early Nineties, the couple worked at a suburban Los Angeles gymnastics academy operated by Li Ning, a Chinese three- times Olympics gold medallist. Deng served as a liaison between the gym’s Chinese coaching staff and parents of the school-age clientele; Wolf, as the gym’s general manager. Today, Wolf works as a director in the Beijing office of Burson-Marsteller, a large PR firm.
In 1996, Deng graduated from Yale and began looking for a job. Through a friend, she met Bruce Churchill, who then oversaw finance and corporate development at NewsCorp’s Fox TV unit in Los Angeles. She lacked experience in the entertainment industry, but had an Ivy League business degree and was fluent in English and Mandarin, attributes of particular value to News Corp’s struggling Asian satellite service, Star TV. Churchill, who was on his way to Star TV as deputy chief executive, offered Deng an internship in Hong Kong. That grew into a full-time job.
Even though 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 NewsCorp colleagues. She helped build distribution in China for its Channel V music channel, for example, and explored interactive TV opportunities for the company’s News Digital Systems arm.
Rupert Murdoch frequently talks to NewsCorp’s business development executives around the globe, so it isn’t surprising that one day he would cross paths with Deng. In early 1998, she first appeared at his side, acting as his interpreter in Shanghai and Beijing.
By that summer, the Star TV staff was buzzing about romance between the pair. After dinner meetings in Hong Kong, they were observed holding hands. In May, 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.
Murdoch told senior Star TV executives in the autumn of 1998 that his relationship with Deng was “serious.” Star TV’s then-chairman, Gareth Chang, told Murdoch at the time that it was a bad idea for Deng to remain on staff, given her personal relationship with the parent company’s chairman. That wouldn’t be a problem, Murdoch replied, because 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 on a ranch near Carmel, California. Murdoch controls about 30 per cent of NewsCorp, 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. Negotiations over a divorce settlement dragged on for nearly 12 months, as Anna Murdoch’s lawyers tried to determine the extent of NewsCorp’s global assets. Financial terms of the settlement weren’t made public, but the Murdochs have said they agreed on one crucial point: that their children eventually would gain control of the company. Five months later Anna Murdoch married widower William Mann, chairman of Henry Mann Securities in New York. Rupert Murdoch and Wendi Deng were married on June 25, 1999, 17 days after his divorce became final.