War at the Wall Street Journal

by Sarah Ellison

  Engaging and charming one-on-one, Brauchli fell apart in front of crowds, cracking obscure jokes and making casual remarks that sometimes left permanent scars. Brauchli was a constant planner, often weighing how to get his way while giving his audience the perception that they had gotten what they wanted. His promotion strained this strategy. He had too many constituents to please all of a sudden, including Murdoch. He was determined to win over Murdoch and, at the same time, carefully counter him.

  In the past few months Brauchli had appeared pale and gaunt, constantly rushing to get somewhere else but never quite arriving. The editors who worked for him could barely get a moment alone to discuss a story—he was too preoccupied with the task of preserving his publication to run it. Most dangerous, though, was his lack of combat training; he had no notion of the tested and gradually perfected tactics that allowed Murdoch to plot a murder while smiling at the face of the chosen victim. Brauchli read up on his subject. Andrew Neil had written in his book Full Disclosure that Murdoch had courted and then shunned him when he was the editor of Murdoch's Sunday Times. Brauchli, like Neil, felt he would be the exception, the one to make it work with Murdoch.

  As the meeting began, the stressed-out Brauchli attempted to articulate his editorial philosophy, which he hoped would not be too distant from his new employer's vision of what the paper should be. "Every story on Page One has to compete for space and length," he said. This represented a break from the Journal's past. No longer would feature stories dominate the page. Williams, the Page One editor, explained this further: the front page would be more responsive to news. He had already sent out memos to the staff urging them to write shorter stories and be punchier in their writing. Bureau chiefs chafed at their glibness. Grueskin, formerly the head of the paper's Web site, urged more news breaks and online packages.

  But Brauchli had a credibility problem. This latest direction for the Journal was the polar opposite of what he and Crovitz had championed the entire previous year.

  Now, in 2008, as he pushed a message in the meeting that the Journal would cover more politics and general news, he wasn't admitting even to himself that the previous redesign of the paper promoted exactly the type of story his new boss despised. Murdoch wanted straight news stories, and Brauchli found himself in the difficult position of backtracking. His new message undermined the old one. This is what his life had become, a series of misfired communications and bureaucratic gatherings. The non-New York bureau chiefs listened via conference call as Brauchli led the meeting. The people in the room could sometimes hear them snickering.

  Toward the end of the meeting, Brauchli checked his BlackBerry and saw that he had a message from Thomson. He told the group he had to excuse himself and go to another meeting. Brauchli returned the call. "We have to go and talk to Les," Thomson said, referring to Leslie Hinton.

  The two men walked to Hinton's office; he had just returned from a trip to China.

  "Ni hao," Brauchli said, Mandarin for "hello." Hinton didn't smile.

  "There's no easy way to put this but we want you to step down as managing editor. We don't think things are working out. We'd like to make a change." Neither Hinton nor Thomson went into detail or explained why. Brauchli knew they were merely handing down a verdict arrived at by their boss.

  Murdoch's influence often began with installing a like-minded editor. As a student of history, Brauchli shouldn't have been surprised. Plus, so many of his colleagues were already missing: the eleventh-floor executive ranks had been decimated. Stuart Karle, the beloved newsroom lawyer who had edited the Columbia Daily Spectator when Brauchli was a reporter, recently had been fired. Brauchli had imagined this grim scenario a hundred times, even going so far as to liken himself to a soldier in Iraq who sees officers shot and wonders if the next bullet is for him.

  Suddenly, he heard himself say, "I think it would be impossible for me to remain as editor if I don't have the support of the owner." His twenty-four years of climbing ended abruptly with that sentence. "I'll do whatever I feel is in the best interests of the Journal as an institution, including stepping down if necessary. But I think you're making a mistake."

  Thomson chimed in. "Don't worry. We can take care of you financially."

  "We'll figure it out," Brauchli replied, and then decided to get a lawyer. He soon hired Robert Barnett, the always cheerful, $975-an-hour Washington power broker who represented both of the Clintons, Bob Woodward, Lynne Cheney, Alan Greenspan, and Queen Noor of Jordan on their book deals. Barnett went to work; Brauchli went ahead with plans for a trip to Asia and the Journal's California bureaus while Barnett handled the details of his "resignation."

  That night, Brauchli and Thomson went out for a drink at Moran's Irish bar, one of the regular newsroom post-deadline watering holes nearby. "This makes no sense," Brauchli said. He had been making changes to the paper, doing much of what Murdoch wanted, he thought. Thomson knew his boss too well: "The precipitating fact is the change in ownership. It's obvious."

  Brauchli had been telling people in the preceding weeks that ed itorships weren't like rent-controlled apartments. "There are no squatters' rights," he would joke. He had been cast out of the job he had worked to obtain for a quarter of a century. His only option now that he had agreed to go was to negotiate how much his silence would be worth to News Corp. He would say that it was his choice to leave, but he had some leverage.

  The plane had landed, and now, speeding along the highway in a black Suburban to downtown Washington, Murdoch and Ginsberg never turned from their cell phones. At some point Ginsberg noticed an e-mail from Marcus Brauchli about a planned breakfast. "That's weird," Ginsberg said, almost to himself. "I just got an e-mail from our friend M.B.," he told Murdoch, who was up in the front seat next to the driver.

  Murdoch paused, looking puzzled. These initials meant nothing to him. For a moment, he seemed to have no memory of the man whom he had considered it necessary, at some earlier moment, to fire. "Who is that?" Murdoch asked.

  Pushing himself forward from the back seat of the SUV past a faulty middle seat that was stuck and folded in half, Ginsberg started a whispered consultation with Murdoch, who was on the phone again after Ginsberg's last syllable.

  It was 11:29 and Murdoch's attention had suddenly shifted. "Sam? Congratulations," he said in a suddenly cheery tone. Sam Zell, real estate magnate and fellow billionaire, had purchased the Tribune Company, publisher of the Los Angeles Times and the Chicago Tribune and the owner of television stations and smaller papers. The tortured auction of Tribune was further confirmation of the newspaper industry's slide. Using very little of his own money, Zell financed the acquisition with debt that he was now struggling to pay off. To recoup a few hundred million, he had decided to sell the Long Island newspaper Newsday, a paper neither Murdoch nor Zell cared much about. Murdoch's interest in Newsday was only as a property that might prop up one of its competitors, his beloved New York Post. Combining the printing and distribution of the two papers would save him the $50 million a year he lost at the Post. It was a beautiful deal for him and his friend Jimmy Lee at JPMorgan, who had been integral to both the buyout financing of Zell's Tribune acquisition and a primary Murdoch adviser on the Dow Jones transaction. In the Newsday purchase, Lee had paired two of his best clients. (Murdoch never won the prize. Newsday went to the Dolan family, who controlled the cable company Cablevision. The Tribune purchase turned into a disaster for Zell. The company filed for bankruptcy in December 2008.)

  At eleven thirty the car was halfway to the hotel and Murdoch picked up his phone again. It was Les Hinton. Hinton remembered fetching Murdoch sandwiches back in Adelaide when the two were working at Murdoch's first paper, the Adelaide News. Now there was this day's work to organize around a slight unpleasantness.

  Murdoch's pledge not to interfere with the "editorial independence" of the Journal was being tested. Though many within News Corp. had found it mildly insulting to have to sign an agreement that implicitly said Murdoch was unfit to
run a respectable paper, Murdoch was willing to weather such slights. They were minor, temporal; they always faded. Murdoch thought the separation between a newsroom and its owner was another false conceit of American newspapers, particularly those of the East Coast establishment variety. But if they helped him get what he wanted, he was willing to sign on to an artificial set of rules he would inevitably circumvent.

  In this case, Murdoch had agreed to a five-person "Special Committee" designed to protect the Journal from editorial interference by the owner. The five members would each be paid $100,000 to go to four meetings a year. They would be on call for the managing editor and editorial page editor of the Journal in case either felt Murdoch was stepping across the line and inappropriately influencing the paper's coverage. The paper had previously been left to flourish without prying from the family. On any given day, the Bancrofts didn't know what was set to appear in the following day's Journal, nor did Dow Jones's business executives. The journalists were isolated and allowed to carry out their work uninterrupted, mostly happy to ignore the quickly eroding business prospects of Dow Jones.

  "My own feeling is that I'll tell the Special Committee," Murdoch said. Meanwhile, Ginsberg, in the back of the car, was working his own angle, on the phone with Robert Thomson: "It's going to break tomorrow. It's really going to be bad if it breaks somewhere else," other than the Journal. Murdoch and Ginsberg were chatting, not to each other, but each working toward the same goal.

  They rode for a few minutes in silence, until Ginsberg's cell buzzed with a text message from Journal editor Nik Deogun telling him the paper had caught wind of the situation and was soon going to put a story out on the wire. Grimacing at this inconvenience, Ginsberg called Thomson to discuss it. "Tell him to hold it and we'll give it to him exclusively," Ginsberg said, referring to Martin Peers, the Journal editor overseeing the story. "Tell them to hold it until we have a signed deal."

  The black Suburban pulled into the driveway of the Ritz-Carlton and Murdoch stepped out of the car. He walked into the lobby and leaned against the front desk. "Rupert Murdoch; I'm checking in," he said. The pretty woman behind the desk smiled knowingly at this celebrity, quickly producing his swipe card for the elevator. The bellboy was starstruck. "Thank you very much, Mr. Murdoch, and it's a pleasure to meet you," he said eagerly.

  Murdoch walked into his eleventh-floor Ritz-Carlton suite, booked for the night though he would stay for only a few hours that afternoon, and threw his coat down. Ginsberg and Bill McGurn followed, setting their bags down in the foyer. "It's huge," Murdoch commented as he lumbered toward the bedroom as if he were unaccustomed to such luxury.

  Immediately, Ginsberg was on his cell phone again, dialing Robert Thomson, attempting damage control. The paper that Murdoch owned seemed intent on showing the world that it still had some spine. It wouldn't be scooped on its own news again. Standing by the window in the suite's marble foyer, Ginsberg put his cell phone on speaker as Murdoch approached. "Tell him to hold it and we'll give it to him exclusively," Ginsberg said to Thomson.

  "Tell them to hold it until we have a signed deal," said Murdoch, wearily. This would be an annoyance for him, for this news to break before he had alerted the appropriate people. The contract that they had been haggling over with Brauchli's lawyer, Bob Barnett, for two weeks would be signed in a matter of hours, and then Murdoch wanted to personally call the members of the Special Committee to preempt any potential revolt in their ranks. "Can't we just say that this thing's been written and he's going to sign it?" Murdoch yelled, clearly accustomed to revising reality so the facts served his needs. But he had bent this one as far as he could. They had to wait for Brauchli to arrive in Washington and sign the contract.

  "Marcus doesn't get off the train for another damn two hours?" Murdoch asked, incredulous. Ginsberg shook his head.

  "I'm going to call him right now and say I'll call you at five and we can go over the story then," Ginsberg said. Murdoch, frustrated by these strictures, this tight timetable, was irritated the story couldn't be contained.

  "They don't answer to News Corp.," Thomson's voice, tinny from the cell phone reception, told Ginsberg. "We can't tell them not to run a story."

  Thomson, aware that his boss was losing patience, stressed to Ginsberg that Murdoch had to make the calls to the Special Committee before anything was announced. "He absolutely must call the Special Committee."

  "And what do I do about the Journal?" asked Ginsberg.

  "Just say, 'Give me a window and I'll give you the story.'"

  "What publisher doesn't make the decision what to publish?" Murdoch said over the sound of the cell phone conversation. He stalked through the living room and past the marble fireplace to the bedroom.

  Ginsberg called Martin Peers and promised he would give him the story later, when he could. "I'll make sure you don't get scooped," he said.

  Murdoch returned to the living room and paced in a small circle, looking over the comments he would make at lunch. He held a single page of lined notebook paper in his hand, covered with his handwritten scrawl.

  After lunch, Murdoch returned to the Ritz-Carlton suite, loosened his tie, and dropped onto the plush chair by the phone in the corner. Brauchli had not yet arrived in Washington. It was two fifteen, and Ginsberg dialed Thomson. "[Brauchli] could have been down there six hours ago," Thomson said, his voice frustrated and weary. Just that morning, instead of leaving early for DC, Brauchli had stayed in New York to keep up appearances. "We attended a meeting for WSJ .com and attempted a witty repartee to give the appearance of nothing happening," Thomson continued.

  No one commented. Brauchli was out, essentially fired. Not in so many words, of course. No top executives were fired in modern corporations. Murdoch had another way of saying thanks for the memories. "OK," Murdoch said, pausing again. "But I don't see the purpose it serves" to go to the meetings, to pretend all was well.

  Thomson sighed. "I don't either. Unless it is being seen as a trouper to the end, for whatever psychological purpose that would serve." Thomson continued, intent on the reason for the call, the instructions for Murdoch to complete the task. "What's implicit is an air of finality. That the discussion is over and as a courtesy, we are informing you. What Marcus has slightly in his head is that it isn't final until the Special Committee meets. They are under the impression that someone from News Corp., Mark [Jackson, Dow Jones's general counsel], is making the calls. What they don't know is Rupert is making the calls." If Murdoch made the calls, it would carry more weight. It would be harder for them to object. It would give Murdoch the outcome he wanted.

  In the meantime, Rupert made other calls to Long Island congressmen, to smooth his way through acquiring Tribune Company's Newsday. Like a Great White, he had to keep moving to survive. After those calls, he dialed Jimmy Lee. "Did you have the conversation with the Journal about our subject of common interest?" Murdoch asked, wondering if word of his interest in Newsday had been leaked to his media outlet. "No, not yet," said Lee. "But it's OK. It's all been sent over and I talked to Sam [Zell]." He spoke quickly, bringing a smile to Murdoch's face, like a father indulging his precocious child.

  At 4:27, the phone in the hotel suite rang again. The contract with Brauchli had been signed. Murdoch went immediately over to the phone on the desk at the window. He dialed the numbers of the members of the Special Committee. "I can't get anyone," he drawled softly after a round of unsuccessful calls.

  Ginsberg, across the room on the couch, offered the cell numbers of the Special Committee members. Most worked, connecting Murdoch to a group of people he reassured with rare unctuousness, working off a script prepared for him by his general counsel Lon Jacobs.

  He first tried Lou Boccardi, a respected journalist and a former CEO of the Associated Press. "Lou, this is Rupert Murdoch," he said. "Fairly urgent I speak to you. I'm temporarily reachable at 202-835-0500, room 1112. If you don't reach me, I'll try you back. It's fairly urgent I speak to you."

  "Is Dean Phill
ips [Susan Phillips, dean of the George Washington University business school] there? Hi. Sorry to bother you. I'm calling the members of the committee as a courtesy to let you know the managing editor, Marcus Brauchli, has resigned." Pause. "He's been very careful to say we've behaved scrupulously but he feels it's time to move on." The plan would be to have a call at midday the next day.

  "It's all very civil and friendly. I just thought I would tell you instead of you reading it. OK." Murdoch laughed. "I just thought we'd have a chat tomorrow and have him on the line."

  Phillips thanked him for calling. "Not at all," he replied. "He's a very nice fellow. It's all been done in a very civilized way. Thanks so much. Not at all. Bye."

  One down, four to go.

  Murdoch repeated the same script with Jack Fuller, a Chicago Tribune Pulitzer Prize winner who went on to become the president of all of Tribune's newspaper operations. The call was quick and painless.

  "Well, I got two," Murdoch said after hanging up.

  Next, Murdoch updated Thomson on the calls to Phillips and Fuller. "We're going to send messages to their BlackBerrys to call here," Murdoch said.

  Retrieving more cell numbers, Ginsberg called them out.

  Murdoch placed a call to Tom Bray, the chairman of the committee and a former Detroit News editorial page editor who had written for the Journal's own editorial page. "Tom, sorry to bother you. This is to tell you the sad news [at this, Ginsberg chuckled] that Marcus Brauchli has resigned. It's all very civilized and friendly ... No, we don't have a replacement. But the idea is for Robert Thomson to go through the staff for someone for you to nominate.