War at the Wall Street Journal

by Sarah Ellison

  "Let's talk tomorrow ... the idea would be to have a midday conference ... We're all very much of one mind," Murdoch said. And then he remembered Thomson's instructions—an air of finality. "Except that it is done ... Sorry to worry you with it."

  Two to go.

  "Lou? Rupert Murdoch here. Sorry to bother you. Just a call to tell you that Marcus Brauchli has resigned, all in a very friendly way. The idea is to get Robert Thomson to supervise until we can find another candidate to present ... It's all very friendly and he said we've behaved scrupulously ... He'll stay as a consultant for six months ... in setting up an Asian business channel."

  But this call was longer than the rest. Lou Boccardi was Brauchli's pick for the Special Committee. "What did Marcus say?" Boccardi asked. Murdoch replied: "He's going to say he'd be more comfortable, everybody'd be more comfortable that the new regime have a new editor ... I have no doubt that the New York Times will make trouble with it for a day or two, but I'm not too bothered by it."

  Click.

  Finally, the task was completed, though the last member, Nicholas Negroponte, hadn't been called yet. Negroponte had been Murdoch's choice for the committee and was not a Brauchli loyalist. The Journal had scrutinized Negroponte's charity, One Laptop per Child, in a front-page story by investigative reporter Steve Stecklow not long before for struggling to distribute its promised laptops to the world's neediest children. Negroponte had privately expressed concern to Brauchli about the story. Brauchli glibly responded, "Oh, that's the first of a five-part series."

  "On me?" Negroponte asked, incredulous.

  "No, on each member of the committee," Brauchli deadpanned.

  Murdoch did not expect Negroponte to object to the Brauchli resignation.

  After all the calls, Murdoch announced, visibly relieved, "There's always a bit of nervous tension around things like that."

  A moment later he picked up the phone to report back to Thomson. "I've spoken to everybody," he said. "We got them on their cellphones." Les Hinton was in the background, hovering to make sure Rupert's work was done. "Hi, Les. Everything's fine."

  What was the reaction? Hinton asked. "Surprise, shock, horror," Murdoch quipped. "No, no horror. And we're all OK for a midday call tomorrow ... I've said Marcus would be on the phone and all of us, too." But what had he told them? "I said it's been very friendly. Scrupulous. And I made a statement praising him."

  Next came an uneventful call to Paul Gigot, the powerful and established editorial page editor of the Journal, who had not been deeply involved in the independence agreement. Like his colleagues on "the page," he believed in the rights of the owner. He wasn't immediately thrilled about the Murdoch takeover, but he wouldn't brook any protest or hand-wringing over it from his staff. If an employee didn't appreciate being owned by Rupert Murdoch, that employee was free to quit. Free markets, free people, as the slogan of the newspaper's editorial page had it. Gigot was serious, well known, and widely respected. Still, Murdoch couldn't pronounce his name correctly. Instead of "Jhee-go," Murdoch reversed the soft and hard g's, pronouncing Gigot's last name as "Gee-jo."

  After the call to Gigot, Murdoch finally called Negroponte. He hung up, that task completed. "They may as well earn their fifty grand," he said, referring to the $100,000 a year that the members of the committee were paid.

  The press conference for the evening's Atlantic Council honorees was starting downstairs, and Murdoch was running late. "But what's it going to be? Blair going on about the world?" Murdoch laughed, relaxed and allowing himself to be candid, without false praise or modesty. Tony Blair and Murdoch were both getting awards that night. Blair would receive the Distinguished International Leader Award and Murdoch the Distinguished Business Award.

  "Ah, they can wait," Murdoch said. Murdoch retied his tie, straightened his flyaway comb-over, which had begun to stand straight up, and made his way downstairs to greet Blair in the Ritz-Carlton's "green room" before the press conference. Unexpected but old allies, they shook hands warmly, patting each other's shoulders. Fred Kempe, head of the Atlantic Council and a former Journal editor, moved between them excitedly, trying to make them feel comfortable and welcome. He went over the format, prepping the two men and saying he hoped to discuss their respective speeches. "Rupert, you have some pretty strong words for Europe. I mean, 'Europe no longer has either the political will or social culture to support military engagements.' That's strong. I expect we'll get a lot of questions about that." But Murdoch's mind was elsewhere.

  "I might get a local question because Obama said something about me today," he offered, almost proudly.

  "What did he say?" asked Blair.

  Obama, campaigning among a few dozen voters that day in Blue Bell, Pennsylvania, had answered a question about media consolidation and freedom of the press by saying that voters have a right to be concerned when "Rupert Murdoch has his eyes on a lot of different media outlets."

  "Oh, it was just about media consolidation, et cetera, et cetera." Murdoch shrugged dismissively. And then for his punch line: "I thought about asking him if he knew about the existence of the Internet."

  Blair guffawed, his shoulders thrown back, reveling in the audacity of his old supporter. "So that's your idea of letting him down gently, eh? Really whack him!" Blair had been the object of Murdoch's attention before; he knew the power the man could wield. While Blair was still chuckling, the three men walked out of the room to greet the press.

  Just as he had been doing the morning of his forced resignation two weeks previously, Marcus Brauchli listened that morning of the Atlantic Council dinner as the top editors at the paper discussed the day's stories. He realized he would never be there again. This part of his life was ending. After he left the paper, he would not be able to even read the Journal for weeks; it was too painful. As time passed, he saw how much his identity had been intertwined with the paper's. He had built his life around his assignments, and a reasonable chunk of his wardrobe was emblazoned with Dow Jones logos. He had called his father in Denver, a lawyer and columnist for the left-wing magazine CounterPunch, for advice as he negotiated his departure. He had no choice but to leave—the question was how he would make his exit. If neither side spoke out against the other and Marcus resigned quietly, he would walk away with upward of $6.4 million. Brauchli was due $3 million regardless of how he left Dow Jones—that sum was his regular severance as an executive of the company, plus the stock options that he had accumulated and negotiated for when he took the managing editor job. The additional $3.4 million came from his lawyer's negotiations with News Corp. The amount was a pittance for Murdoch, but enough to make Brauchli abdicate his position. He accepted Murdoch's offer to stay on as a "consultant" to the company for six months. He knew he would be attacked by fellow journalists for taking money rather than fighting Murdoch. Brauchli reasoned that to stay and fight would damage the Journal's brand. He honestly hadn't felt that Murdoch meddled in coverage. If he went to the Special Committee, what would he say? That he wanted to keep his job? He didn't feel he had a concrete complaint. No one had told him to run or not run a story. Besides, he hadn't seen an editor who had successfully gone to war with his paper's owner and won.

  On his last day, Brauchli kept up appearances, as Thomson and Murdoch had perceived. Brauchli was determined to depart with dignity. He would hold his head up but he wouldn't fight, despite his critics' urging. Although most companies whisked departing executives out quickly, Brauchli played his part up to the moment of his departure, even keeping a meeting with editors Alan Murray and Almar Latour to talk about the redesign of WSJ.com, the Journal's Web site. That morning, he and Thomson exchanged quips and the usual banter, all the while knowing that Brauchli had just a few more hours at the top. Brauchli interviewed a job candidate and headed to the airport to catch a shuttle to Washington, DC.

  He arrived at the Ritz, checked in, and carried his bags up to his room. He changed into his tuxedo and walked downstairs for the reception, feeling awkward to be d
ressed up so early. No one else was in black-tie attire at that early hour, aside from Fred Kempe's wife, who was, in effect, the hostess of the evening. He milled around awkwardly for a moment, and then almost immediately a huge crowd swelled out of the doors where Murdoch's press conference had just concluded. Rupert eyed Brauchli and walked over. "Oh, are you planning to stay over?" Murdoch asked. Yes, Brauchli replied. "Well, you should come home with us on the plane tonight instead." As the exchange concluded, a photographer snapped a picture of them together, grinning into the camera, the victor and the vanquished. Of course it had been no match at all.

  Murdoch headed through the growing crowd to make his way up to the penthouse to change into his tux. He wore a modern black tie, not a bow tie, a change for a traditionalist like Murdoch, one of many since marrying Wendi. When he returned to the VIP cocktail hour downstairs, he was, as usual, stopped at almost every turn. Murdoch did not seek out people at a cocktail party. He didn't have to. Everyone came to him. Even in a crowd such as this—Colin Powell, Henry Kissinger, Sir Howard Stringer, José Maria Aznar—Murdoch stood out.

  In previous years, the Atlantic Council's fete had drawn a few hundred attendees, but Murdoch's presence boosted the guest list. The settings had been carefully done, with white orchid centerpieces arranged atop shimmering deep blue tablecloths. Murdoch sat between Kissinger, who would present him with his award after dinner, and Jimmy Lee, his banker friend. When Murdoch asked Jimmy if JPMorgan could be a host sponsor to the event, Jimmy agreed under the condition that Murdoch underwrite Jimmy's awards ceremony later that year, at the New York Public Library.

  The guests started their meal with roasted lady apple, stuffed with blue cheese mousse, on a bed of mache lettuce, pickled red onions, dried cherries, and Brie wrapped in phyllo pastry. Murdoch picked at his meal with the Ritz-Carlton—branded silver, while Jimmy Lee, in a low voice, gave him the rundown on the deal they had agreed to with Sam Zell. There was always another deal. The two were also strategizing about a possible Yahoo! tie-up. The Vidalia-onion-crusted filet arrived next, suitably rustic with pattypan squash and baby turnips. The guests' chatter grew louder as they downed their glasses of 2006 Simi Chardonnay and Steele Pinot Noir.

  When Kissinger introduced Murdoch, Brauchli's BlackBerry buzzed with a call from Bill Grueskin, his deputy. He ignored it. A moment later, just as Murdoch stood to take the stage, Grueskin sent Brauchli an e-mail, and he looked at his small screen. It was a story from Time.com: "Wall Street Journal M.E. to Resign."

  Wall Street Journal M.E. That was him. The real action of the evening was happening on the small screen in front of him and not on the stage where his boss was speaking. Nine hundred other people were listening to Murdoch thank Kissinger for his kind introduction. "Your words remind me of the definition of a diplomat: a man who always remembers his wife's birthday—but never remembers her age..." For Brauchli, the joke and the polite laughter were taking place in another world, one he seemed to be departing with such mixed feelings. Murdoch, not yet aware of the headline, seemed unconcerned with the havoc he was wreaking in Brauchli's career. He later explained to Brauchli that it had to happen this way, but it was a problem of physics. "Two people can't occupy the same job at the same time."

  Murdoch didn't seem to notice the furious BlackBerry activity between the two tables of Journal editors at the dinner. They were hungrily anxious for news of their own future. Murdoch continued: "Today, we can be tempted to bask in our achievements—and wax nostalgic about all we have been through. But this is no time for nostalgia..."

  Seated next to Brauchli was John Bussey, the intense and hard-charging Washington bureau chief of the Journal. As foreign editor, he had been Brauchli's boss for years when Brauchli was chief of the China bureau. He had made Brauchli's life miserable. It was with not a small amount of pleasure that Brauchli leapfrogged Bussey to become the managing editor of the Journal. His first instinct was to return the pain Bussey had inflicted on him. In his first (and only) major reorganization of the editing ranks, Brauchli offered Bussey a pay cut. But shortly after, he reversed himself and offered Bussey the high-profile Washington bureau chief job. Brauchli wanted to place a strong Journal person in the position, to establish "the facts on the ground," knowing that the DC bureau was about to be an object of obsession for Murdoch.

  Ironic, then, that it was Bussey who turned his BlackBerry screen to Brauchli with raised eyebrows and questioning shoulders. "Is this true?"

  "Wall Street Journal M.E. to Resign."

  Brauchli responded only with a sheepish, evasive smile. He couldn't say anything. So he sat among his colleagues, some of whom ran in and out of the ballroom to call back to the newsroom for details of his departure, while Murdoch lectured. Bussey, a company man above all else, set aside the past differences and e-mailed the top editors in New York to tell them to stop e-mailing Brauchli, who had turned off his cell phone. The moment the last speaker left the stage, Brauchli darted out of the ballroom, eager, now that the word was out, to get away.

  That night, after the dinner, Brauchli took Murdoch up on his offer for a ride home. Brauchli boarded the private plane, which carried Murdoch, Ginsberg, speechwriter Bill McGurn, and longtime Murdoch investment banker Stan Shuman, who had navigated Murdoch's path in the United States, helping him buy the New York Post and other properties. Murdoch, propped up on cashmere pillows, bow tie loosened, watched Bill O'Reilly from the mammoth flat-screen TV that overlooked the conference table where all his guests sat. Murdoch dipped in and out of the conversation. No one spoke a word about Brauchli's resignation. The small talk revolved around China, Passover (Ginsberg had been observing the Jewish holiday and was avoiding leavened bread), and the progress of the short flight back to New York. When Murdoch occasionally lost interest, he turned toward the television and turned the volume up so he could hear a bit better. As O'Reilly bellowed from the screen, Murdoch's guests looked at one another, sometimes smirking at the bellicose television host. Murdoch, seemingly unaware, turned away from the show to comment on it: "Has a good rhythm, doesn't it?" he said, to polite nods. Peggy, the flight attendant, distributed bottles of water and brought out small plates of almonds for the guests. Murdoch had offered everyone a drink, but there were no takers.

  21. Thomson's Journal

  AFTER BRAUCHLI LEFT the paper, Thomson initially tried to tread lightly on the news floor of the Journal and keep up the appearance that he was searching far and wide for a replacement managing editor. Resentment in the newsroom toward Brauchli—who had left his post quietly with a chunk of money in his pocket—was palpable. In his first move as the "acting" managing editor of the paper, Thomson held a series of meetings with reporters and bureau chiefs to make himself the friendly face at the head of the newsroom, the calming influence who would offer clear communication from on high. It was a direct response to criticisms that Brauchli didn't communicate anything, even as the paper's expectations—of its writers, its editors, and its own readers—were transformed.

  In that spirit, Thomson gathered in the last week in April with the reporters from the paper's "Money & Investing" section, the squarest, most buttoned-up of all the paper's cliques, the group that became passionate about arcane Journal articles the reporters across the newsroom floor in the "Weekend" section used as stuffing in their Prada boots after a rainstorm. They were the core of the paper. At any other paper in the country they would have been relegated to a business-section ghetto. At the Journal, they were the hard-nosed experts. They were also an exceedingly nervous bunch.

  Perhaps for these reasons Thomson started with them. The reporters gathered in a conference room. The meeting started off with a bitter irony. Thomson discouraged the attendees from taking notes or making recordings. He was excruciatingly aware of the press the Journal received and didn't welcome unauthorized leaks. Nik Deogun, the group's chief, who had proved himself able in guiding Thomson through the Journal's minefields, introduced Thomson. He hadn't prepped Thomson entirely in Jo
urnal sensitivities, however. Thomson started off with a series of slights that would leave an imprint.

  "I think a journalistic culture based solely on one story or two stories in the paper today is skewed in the wrong direction," he began. "Journalism is a lot more complicated and a lot more diverse than that. And I think people have to be doing several things, several types of stories at the same time. And that's a challenge, but that's a challenge every journalist around the world at every news organization is facing." He was referring to the paper's "leders," the Page One feature stories Journal reporters spent weeks if not months reporting and writing before handing them off to the paper's legendary Page One staff. That group of editors existed in an unapproachable ivory tower in the corner of the newsroom, quiet and removed. Leders were the main measure by which reporters were judged. Failing to successfully produce them—and in relatively large quantities—could kill a career. Hitting one memorable one could have the opposite effect in that it would allow the lucky (and talented) reporter to coast, as some occasionally did, for months after the publication of a noteworthy effort. The vast majority of the staff fell somewhere in between the career-ending and career-making Page One existence. They also broke news on a regular basis, producing in-depth feature stories in their downtime while they were waiting to have their calls returned. Juggling both types of stories was not a new notion for the paper's reporters. That Thomson thought so was a sign of how little he had become acquainted with the newsroom over the past four months since the acquisition had officially closed and he had become the paper's publisher.