FOR MURDOCH, INTERNATIONAL INFLUENCE OUTWEIGHS WEALTH.

Byline: Geraldine Fabrikant The New York Times

It was vintage Rupert Murdoch. On Thursday evening, July 18, Murdoch, the Australian-born chairman of the News Corp., and the American entrepreneur Ronald Perelman lingered after dinner on the outdoor deck of the investment banker Herbert Allen's home in Sun Valley, Idaho.

Perelman had wanted to sell his company, New World Communications with its 10 television stations, to Murdoch for months, but the two had haggled over price. Now Perelman was playing hardball, threatening a deal to shut out the News Corp. ``He had me over a barrel,'' Murdoch conceded.

And so, dismissing concerns of some of his own executives, on the following Sunday night, Murdoch, back at his ranch in Carmel, called Perelman on Long Island. By Monday, they had a deal.

Critics said Murdoch would be paying a steep price, $3.4 billion, for stations that already carried his Fox Network. But the deal would make Murdoch the biggest owner of television stations in terms of viewership, reaching 40 percent of the United States, and a true contender with the major networks.

And so, as he often has, Murdoch - known as an opportunist willing to act quickly, ignore naysayers and spend heavily to enhance his strategy - paid a premium of roughly $300 million, analysts said, well aware that it would hurt his stock.

Nor was it Murdoch's only purchase that week. It was also announced that a consortium of companies including the News Corp. had won a $1.3 billion bidding war for Metro Goldwyn Mayer Inc.

The summer shopping spree capped 12 months of aggressive investing in which Murdoch had already bet $1.8 billion on new businesses, including a United States satellite-television business and a rival news service to Turner Broadcasting System's Cable News Network.

Certainly no one underestimates the graying 65-year-old billionaire, who created the Fox Network against all odds that the public wanted another broadcast service and - nearly bankrupting the News Corp. six years ago - began a satellite-TV service in Britain. But despite the razzle-dazzle of his deal, some on Wall Street are worried. ``No one knows what the returns of all these new investments will be,'' Jessica Reif, who follows the News Corp. for Merrill Lynch & Co., said.

Nevertheless - and coldly confident - Murdoch is at it again: reshaping his flagship company beyond its well-worn core publishing businesses, often making big bets in little-understood markets. The goal: to own every major form of programming - news, sports, films and children's shows - and beam them via satellite or TV stations to homes in the United States, Europe, Asia and South America.

``We want to put our programming everywhere and distribute everybody's product around the world,'' Murdoch said in a recent interview, as he sat slouched in a white armchair at his New York headquarters, his eyes darting to seven televisions. The office has none of the oversize bowls of fruit or shiny plaques favored by other media moguls. But the man whose family holds 30 percent of the News Corp. dominates his space, as well as the conversation, by brooking few interruptions, dismissing questions and speaking so softly he can be difficult to hear.

``We've got to move to entrench ourselves the best we can, as fast as we can,'' he said.

Today, in many ways, Murdoch is well positioned to do so.

The News Corp. has slashed debt from $12 billion to $5.2 billion and boosted its cash flow to comfortably meet interest payments. The company has converted short-term debt to long-term obligations - due beyond 2000 - alleviating pressure for quick payoffs.

Murdoch's style is well suited to an era of rapidly changing technologies and multinational alliances. Because he controls 30 percent of the News Corp., he can move quickly and - like the shark his critics sometimes call him - dip into deep pockets and grab opportunities.

``Rupert is not so much about money as he is about power,'' one investment banker who knows him well said. ``A lot of people doing deals are very focused on cash flows, returns on investment and how much they can put into their own pockets. Rupert thinks more about how the deal will expand his position around the world.''

Indeed, Murdoch seems relatively unfettered by concerns about public opinion, or the News Corp.'s stock price.

``Rupert worried about the effect of New World on his stock, but he believes that as the largest stockholder of News Corp., if he is willing to wait, others should be, too,'' a second investment banker familiar with his style said.

And more than most rivals, Murdoch also has what some see as an icy willingness to use his media operations as handmaidens to his business ends. For instance, he elicited widespread unease when his TV Guide promoted a troubled TV show on his Fox Network and when he took the BBC off his Asian satellite to satisfy the Chinese.

Regardless of criticism, Murdoch's global strategy has set the agenda for competitors. ``Rupert wants to rule the world, and he seems to be doing it,'' Viacom's chairman, Sumner Redstone, has said. Redstone apparently used Murdoch as a model when he flew to Germany recently to negotiate a film distribution deal.

But Wall Street is not amused.

The News Corp.'s financial performance, hampered by newsprint costs, weak performance at the Fox Network and operating losses at its Asian satellite business, has been disappointing this year. Reif of Merrill Lynch expects a 6 percent drop in cash flow to $1.33 billion for fiscal 1996, which ended June 30, despite a 8.5 percent jump in sales to $9.7 billion.

Several analysts agreed that next year, buoyed by 20th Century Fox's ``Independence Day,'' the News Corp.'s cash flow could rise 20 percent. Beyond that, weighing the impact of new start-ups is a forecasting nightmare. One result: The stock has hovered at about $22 a share for the past year. Wall Street is ``suspicious of how much Rupert will spend and how he accounts for it,'' John Tinker, who follows media for Montgomery Securities, said. ``There is no doubt he'll get it right. The question is when.''

Indeed, opaque accounting for the Australian-based global company makes analysis tough. For example, Australian policy lets companies wait a year before writing off some costs of new businesses and ``delays the impact on the income statement by a significant amount,'' Reif said.

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Photo

Photo: Rupert Murdoch's News Corp. reaches 40 percent of te levision viewership, and has become a true contender with the major networks.

The New York Times