JAMES MURDOCH, I PRESUME?
HIS PLANS FOR NATIONAL GEOGRAPHIC ARE ROUGHLY THE OPPOSITE OF WHAT CRITICS EXPECT
WITHOUT THE CHANNEL, “THEY WOULDN’T HAVE BEEN ABLE TO ... KEEP THE LIGHTS ON”
In the spring of 2012 the National Geographic Channel was about to premiere Diggers, a reality show about a couple of amateur sleuths who look for buried artifacts using metal detectors. During the promotional rollout, the National Geographic Society told David Lyle, chief executive officer of the network at the time, that concerns had been raised about the show. In the real world, scofflaws sometimes rifle through delicate archaeology sites while brandishing the devices. Might Diggers inadvertently make the situation worse? Lyle assured everyone at the society that the show was categorically anti-looting. To stave off its critics, Diggers eventually hired several archaeologists to serve as minders and chaperones on set. “If we were making that show for Discovery, we wouldn’t have had to do any of that. Why did the society care? A couple of people at a couple of universities wrote letters,” Lyle says. “They hated getting letters.”
For years a culture clash had been brewing within the cloistered, sober halls of the National Geographic Society, a social club turned nonprofit organization founded in Washington in 1888, and devoted to increasing and diffusing geographic knowledge. Some NGS executives were irritated by the reality-tv shows that had come to dominate the network, which was majority- owned by Rupert Murdoch’s News Corp. The worry was that the lowbrow shows were damaging the society’s credibility and upstanding reputation. Behind the scenes, they’d attempted to quash several projects. The TV people kept fighting back.
By the time the NGS board hired Gary Knell, the former head of National Public Radio, to replace longtime CEO John Fahey in January 2014, the Diggers flap had blown over, but the tensions still simmered. Among other things, the internal strife was generating bad publicity. On a blog, societymatters.org, Alan Mairson, a former National Geographic writer and editor, highlighted again and again how the NGS’S traditional focus on science, exploration, and discovery was being over overtaken and undermined on cable TV by more titillatingting topics such as sex and drugs, paranormal activities, s, and true crime. He lambasted the society’s leadership for subsidizing its “good works” with “tabloid trash,” often illustrating those critiques with a photo of Murdoch laughing.
Knell agreed with some trustees that the network’sk’s editorial direction had gone awry, but he also knew ew that the highly profitable network, not the august, ust, yellow-bordered magazine, was the NGS’S lifeblood.d. In the months thatt followed, Knell came to believe the brand was suffering from a split per personality. It was one thing on TV, an another thing in print, and some beas beastly hybrid online. As much as any particular program, he de determined, the dissonance was w what was hurting business. For example, various sales teams were approaching potenntial advertisers separately and with very different pitches.s. Knell suspected the internal friction would further jeop- ardize National Geographic during an existential fight ht for relevance.
So in May 2015, a little more than a year into the job, Knell decided to clear the air. He organized an off-site retreat for the society’s 20 trustees to discuss the organization’s future. He invited several business partners to attend. “The two-day retreatt was held at the U.S. Institute of Peace—which you shouldn’t read anything into,” Knell says. “There was a good feeling in the room.”
Founded in 1984, the federally funded, nonpartisan peacee institute is dedicated to reducing violent conflicts around thee world. Its modernist Washington headquarters, topped by a billowing, translucent roof, is just off the National Mall, not t far from the Lincoln Memorial. Among the key guests arriving for Knell’s retreat were a handful of top executives from 21st Century Fox, which had split from News Corp. in 2013. For years, the NGS and Fox had worked together, running the National Geographic Channels, a lucrative family of four domestic and foreign cable brands, of which Fox owned 70 percent and the society owned the rest. Crucially, Fox sent Chase Carey, then the company’s chief operating officer, and James Murdoch.
The youngest of Rupert’s three children from his first marriage, James, 43, has spent much of his career outside the U.S., from Hong Kong to London, overseeing various outposts of the family’s far-flung media empire. Along the way, he served as the CEO and later nonexecutive chairman of BSKYB, the European telecommunications giant, of which his family’s company owned a controlling stake. In 2011, as the phonehacking scandal engulfed News Corp.’s U.K. newspapers, James returned to New York, where the company is based. In July 2015 he took over from his father as CEO of 21st Century Fox. (He and Rupert declined to be interviewed for this story.)
From a certain perspective, the summit at the U.S. Institute of PeaceP couldn’t have gone better. In September, the Nat National Geographic Society announced it would sell all of it its media holdings—including its flagship magazine, its TV channels,c and its book publishing division—along with a han handful of ancillary businesses, to a new for-profit company. Fox would pay the society $725 million and become majorit ity Partners.owner of The the yp societynew venture, would dubbedhold on Nationalto 27 percent Geographicand control half the seats on the new board. By taking a step back from the media business, the NGS would be free to focus on its philanthropic activities, supporting scien- tific exploration, conservation, and education. And by paying the society a substantial sum, 21st Century Fox would gain tighter control over the expression of the National Geographic brand in print, on TV, and on the Web.
Not everyone saw this as good news. Various observers fretted that Rupert Murdoch’s conservative worldview, particularly his boisterous skepticism about global warming, might warp the flagship magazine’s editorial mission even more than the amateur
treasure hunters. On Twitter, Greenpeace called the marriage “bad news for nature lovers.” In a clip on Youtube, Jane Goodall, the primatologist and former explorer-in-residence at the NGS, told The Winnipeg Free Press that at first she’d assumed news of the deal was a prank. Critics circulated mock versions of future National Geographic covers, with headlines ranging from “The 10 Most Reagan-esque Animals” to “The Joy of Coal.” But while these commentators focused on Rupert’s political views, it was James who drove the deal. “[He] came and spentp time with the trustees,” sa says Jean Case, chairman of the society’s board. “We b became sufficiently convinced that his passions i in these areas are e very r real.” Known among mong bus business associates as the most environmentally progressive of the Murdoch clan, he and his wife, Kathryn, run Quadrivium, a nonprofit foundation dedicated to a range of causes, including scientific education and the protection of oceanic fisheries and other natural resources. According to biographer Michael Wolff, Rupert sometimes refers to James as his “tree-hugger son.”
The $725 million investment was James’s first major move as Fox CEO. The deal has received strong support from his older brother, Lachlan, Fox’s executive chairman, who’s an avid rock climber and underwater photographer. In addition to the media assets, Fox picked up National Geographic’s travel business, which arranges tours to places such as the Galápagos Islands, and its licensing division, which lends its name to everything from bird feeders to backpacks to bedsheets to coffee beans. The success of the brand will likely hinge on the financial performance of the TV network—and its ability to navigate a market that’s being shaken by the unbundling of cable packages and rapidly changing viewing habits.
While some observers are still concerned that the Murdochs will drag the National Geographic brand down-market, the TV network is u undergoing a radical makeover in the opposite direction. Fox is investing hundreds of millions of dollars to rein
vent it as a more highbrow destination—a kind of HBO for science and adventure programming. “It’s better shows, it’s bigger talent,” says Courteney Monroe, current CEO of the TV network. “The shift is right for the time. But, first and foremost, it’s right for the brand.”
National Geographic has been a staple of middlebrow American culture for almost a century. By 1926 the magazine had 1 million paying subscribers (or members, as
“WHAT DOES THE HBO VERSION OF NATIONAL GEOGRAPHIC LOOK LIKE?”
they have long been known), according to Explorers House: National Geographic and the World It Made, by Robert Poole. As a nonprofit, the NGS poured surplus revenuenue back intoto its ts operations,ope at giving rise to an erudite, university-like culture, replete with generous rous em employee perks and fierce bureaucratic skirmishes. In the 1980s the magazine’s sub- s scriptions and newsstand sales hitt apa peak of about 10.9 million monthly y rea readers, but after 1990 they began to o decline. (Today it has a U. S. cir- culation of roughly 3.3 million,, according to the Alliance of Audited Media.) Hoping to make up for falling print revenue, the NGS invested in everything from Hollywood movies to world-music albums to IMAX theaters to mobile games. Most of these forays struggled. At one point the society teamed with Paramount Pictures to co-produce K-19: The Widowmaker, a submarine action flick starring Harrison Ford and Liam Neeson. The movie, which had a $100 million production budget, generated only $65 million in global ticket sales, according to Box Office Mojo. In 2006 the society paid an undisclosed sum—which one former executive says was upwards of $100 million—to acquire Hampton-Brown, a leading publisher of English-as-a- second-language educational material. The move used a sizable chunk of the organization’s endowment (which by 2009 was hovering at less than $200 million) yet never generated significant profits. The media investments that did succeed—like the society’s 2005 hit documentary March of the Penguins— failed to translate into sustainable business models.
Cable TV was the exception. Throughout the 1960s, National Geographic produced nature documentaries for broadcast TV networks, starring the likes of Jacques Cousteau. When cable took off in the early 1980s, the NGS considered starting a channel but ultimately decided against it. That left the door open for the Discovery Channel, which began in 1985 and has since grown into a rich and formidable crosstown rival.
In the mid-’90s, the NGS reconsidered cable. Launching a network from scratch requires a hefty investment, in the ballpark of several hundred million dollars. Aware of the risks, National Geographic met with various potential partners and nd eventually hooked up with Murdoch.
The negotiations took almost a year, according to Rick Allen, a former National Geographicc executive. In the end, the society secured several al controls, including separating TV rights, whichh went to the channel, from digital rights, which stayed with the Ngs—and setting up a society-staffed fact-checking operation to vet shows before they aired. “The analogy I gave my colleagues at the time was that we’re playing pickup basketball with Shaquille O’neal,” Allen recalls. “Shaq is 340 pounds. We’re 180. He doesn’t have to try and hurt us. All he has to do is lean on us, and we’re in trouble.”
The National Geographic Channel went on-air in the U.S. in 2001. With the society’s brand recognition and Murdoch’s l leverage, the network quickly spread a across the U. S. and around the world—it no now reaches 440 million homes in 171 countries tries. By the end of the decade, according to a Ha Harvard Business School case study, the TV di division was generating tens of millions of dollars in profit annually for the NGS. Even as it grew more profitable, sprouted addition additional channels ( including Natgeo Wild), and thrivedthriv overseas, the network was getting trounced in the U. S. by Discovery. In 2011 the network b brought in Lyle as its CEO. A gregarious Aussie, h he’d spent the past several years in Los Angeles, running the Fox Reality Channel.
The National Geographic Channel beganan cranking out a slate of relatively low- cost t reality shows. For the first time, the channel l scored several pop culture hits, includingg Wicked Tuna, in which teams of salty New w Englanders chase down Atlantic tuna; and d Doomsday Preppers, about gun-toting survival- ists preparing for Armageddon. Ratings grew, w, and so, too, did the net operating profit at thehe National Geographic Channel, which, accordording to Lyle, jumped from $72 million in fiscall year 2011 to $133 million in 2014.
On several occasions, the society’s standards and practices department attempted ed to alter or kill a series in development. Lylee says that in the spring of 2012, on the eve of thehe premiere of Wicked Tuna, the NGS tried to shut t down the show over concerns about overfishing. shing. Emergency meetings were held. The showw proceeded on the condition that the channel create public service announcements highlighting the vulnerability of tuna populations.
Lyle says another fight broke out in 2013 over Killing Kennedy, a movie based on the book by Martin Dugard and Fox News anchor Bill O’reilly. There was nothing overtly partisan about the TV adaptation, which starred Rob Lowe as Joh John F. Kennedy. Even so, Lyle says, a certain faction already con concerned that the channel was becoming Foxified objected to t the show because of the O’reilly connection. The issues got has hashed out, and Killing Kennedy aired, generating significant rati ratings. The TV executives bristled at the interference. “Without the revenue from the channel,” Lyle says, “they wouldn’t have bee been able to pay the power bill to keep the lights on.”
As the years passed, Fox’s desire to control the Natgeo brand grew more urgent. According to Stephen Giannetti, a former executive at the network, representatives from Fox routinely inquired about buying out the society’s 30 percent stake in the network. “It was a conversation every year,” he says. For a long time, the NGS resisted.
Following his appointment as the society’s CEO in January 2014, Knell found himself staring into what was arguably a
more hostile environment than the Antarctic wastes, “death zone” on Everest, or anywhere else the NGS routinely dispatched photographers—namely, the modern media marketplace. The forecast didn’t look good. And the more Knell dug into the NGS business model, the more concerned he grew. How, he wondered, would an independent nonprofit keep up in an age of shifting distribution channels, migrating ad dollars, and diminishing returns for legacy media brands?
Knell believed that to survive, the various factions within National Geographic needed to unite. The place to start was TV. In the summer of 2014, Lyle stepped down as network chief. Afterward, National Geographic announced that an internal candidate, Monroe, was taking over. A marketing executive, she’d arrived at the network a couple of years earlier from HBO, where she’d spent more than a decade creating campaigns for hit shows such as Sex and the City and The Sopranos.
A new programming vision began to take shape. The shifting strategy was informed, in part, by the commercial success of Cosmos: A Spacetime Odyssey. The 13-part documentary series, which aired in 2014 and starred astrophysicist Neil degrasse Tyson, was produced by Family Guy creator Seth Macfarlane and ran across several networks owned by Fox, including Natgeo. Cosmos applied rich, Hollywood production values to a wonky, scientific subject. Viewers and advertisers loved it.
In January 2015, Monroe got a call from Peter Rice, chairman and CEO at Fox Networks Group. “He said, ‘What if we blew up what we are doing?’ ” Monroe recalls. “‘You worked at HBO for a long time. What does the HBO version of National Geographic look like?’ ” In April of that year, Monroe presented an upscale version to the network’s board. James Murdoch sat in on the meeting. “It was universally embraced,” she says.
In May, Murdoch attended the off-site retreat in Washington where, for the first time, he met with the society’s trustees. Whatever reservations the National Geographic Society harbored in the past about selling more of its assets to Fox quickly dissolved. Four months later, Fox and the NGS announced the sale. A round of layoffs at the society soon followed. Knell says that if the NGS hadn’t made the deal with Fox, things would only have gotten worse. He sees better times ahead. “21st Century Fox is a visionary company,” he says. “We were able to minimize some of our risk, and Fox got a brand theyy can really expand and back.”
In March, inside a private dining room oom at New York’s Park Hyatt hotel, Monroe unveiledled the programming strategy to a crowd of media buyers. The channel’s development slate is brimming with boldface names. Alex Gibney is producing a miniseries ies about the global water crisis. Brett Morgen is making g a biopic of Jane Goodall. Scott Rudin is developing a series about the events leading up to the nuclear meltdown in Chernobyl. And Darren Aronofsky is creating a series called One Strange Rock.
Each will be backed by hefty marketing and production budgets. Under the previous regime, the networketwork spent about $300 million a year on roughly 450 hours of programming. Monroe will now expend pend $400 million on 150 hours. “Our strategy before was more of a volume play,” she says. “It was a lot of low- cost ost hours. Quantity over quality. We’re inverting g that.”
Nationalnal Geographic’s ambitions are likely to put thehe network on a collision course not only with th Discovery, but also with HBO, Netflix, and nd Amazon. “The audience doesn’t necessarily ily go where the dollars are spent,” Lyle says.. “The part you don’t know is whether your ratings will increase pro- portionally.”.” The society is happy with the network’s twork’s direction now, he says, but what hat will programming look like in five years s should the strategy fail?
With overall cable ratings declining in the U.S., media conglomerates are looking overseas to find new audiences. Natgeo wants its strategy to appeal to audiences from Central America erica to Europe to Asia: “Big shows in ourr genres—science and adventure—should translate around the world,” Monroe says says. “The hope is that these becom become bi big, globall franchises for us.”
The digital, print, and TV teams are now all under the same roof and, in theory, working toward the same goals. “There were people in certain quarters who were holding their noses about what was happening on the television side,” says Declan Moore, CEO of National Geographic Partners. “It’s a lot easier for them to lean in if they see more thoughtful, informative programming.”
The strategy will get its first major test this fall. In November the network will air a miniseries called Mars, produced by Ron Howard, Michael Rosenberg, and Brian Grazer. The magazine will publish a package of stories about Mars. The book division will publish a Mars book. The Web team will go hog-wild with Mars content. Monroe jokes that National Geographic Expeditions will begin booking tours to the red planet.
Months after the deal was announced, James and Lachlan Murdoch och re remain actively engaged in Fox’s prized new asset. Every year theth magazine’s photographers congregate at the society’s headquartershea for an exhibition of their work. This year, the Murdoch brothers attended the seminar and ming mingled, admiring the shots of camel silhouettes and lightning- struck villages. In November the mag magazine published an issue devoted to climate cha change. Susan Goldberg, editor since 2015, says tha that afterward she received a congratulatory no note from Murdoch, saying he’d “gathered his f family around” to read through the import tant issue. She says he’s made only one e editorial suggestion to her. “James is an en environmentalist,” Goldberg says. “He said said, ‘I wish we could do more stories about why people don’t believe science.’” <BW>