War at the Wall Street Journal

by Sarah Ellison

  Still, the 180-degree change in Web philosophy showed Murdoch's keen ability to alter his argument when it suited him. The problem with this shift: what was Murdoch's content worth? The question cast doubt on all that he had built. If the Journal, the paper he had found dry and timid and gray, was the only newspaper he owned that people were willing to pay for online, what did that say about the wisdom of his business strategy of pumped-up headlines and color photos? Would people pay for Murdoch's brand of breathless news? The company's early research seemed bleak. Apart from the Journal, Murdoch's papers weren't unique enough for people to want to pay for them online.

  As he struggled for a business model he seemed increasingly erratic in his public statements. He backed up his commentator Glenn Beck's assertion that President Obama was a racist: "He did make a very racist comment about blacks and whites and so on," Murdoch said. When asked why there was not more civility in public discourse, Murdoch blamed politicians like New York governor David Paterson, whom he called "a very nice, honest man, who's blind, and can't read Braille, and doesn't really know what's going on."

  Two years after Rupert Murdoch had officially made the Journal part of his empire, the paper bore his stamp. One of the great icons of American journalism had been transformed. The famous front page had become more common. The process had begun years before, but now, each morning, Page One carried the big news of the day. Stories were shorter. The Wall Street Journal sent reporters out to cover local natural disasters, mass shootings, and minor political scandals. Features that had gestated for months and had been precisely edited for song and nuance were gone. There were fewer investigations. The signature Journal "tick-tocks" lacked the old rigor. Joe Nocera, business columnist at the New York Times who had pilloried the old Dow Jones management, titled a piece in August "Wall Street Journal, R.I.P." He noted how little business coverage was in the front section and how much less distinctive the paper had become. "Most painful for me," he continued, "are the memories I have of the rollicking Wall Street Journal narrative that was such a staple—a behind-the-scenes story about some shenanigans inside a company that only The Journal would ferret out and tell. Nobody else in journalism wrote those stories on a regular basis, and now that The Journal has largely stopped writing them I fear they are going to disappear, like an ancient dialect that dies out."

  Many other outside readers, including some of the leading voices in journalism, praised the paper or professed not to see any changes. Eugene Roberts, the legendary former executive editor of the Philadelphia Inquirer, admitted, after originally being skeptical of Murdoch, "I've been impressed with what I've seen so far." The Washington Post's Walter Pincus said the Journal was better under Murdoch. Harold Evans, the former Times of London editor famously ousted by Murdoch, said, "The Journal is a much improved newspaper."

  And eventually, there was the question of balance. At the Journal, Robert Thomson intoned that Journal reporters had the "objective of objectivity." He attacked the New York Times as a liberal outlet that made no effort to be balanced. "At the New York Times, you have news with a skew. Or a skew with news," he said. The comment seemed eerily similar to Fox News's "fair and balanced" stance versus the "liberal" CNN.

  By the fall of 2009, it no longer took a careful and obsessive reader to notice changes. "Taliban Now Winning" a front-page story in August screamed. Reporters at the paper were aghast, though they noted that the story itself was more nuanced and in many ways contradicted the banner headline. "State Death Taxes Now the Latest Worry" announced another in August on the front of the paper's "Marketplace" section. The loaded "death tax" phrase was used six times in the story to describe estate taxes. The headlines grew cruder and more insistent. "Politicians Butt In at Bailed-Out GM" blared a story in October.

  When President Barack Obama announced his decision to drop plans to deploy a ballistic-missile defense shield in Central Europe, the Journal initially headlined the story "Allies Roiled by U.S. Missile U-turn." The headline took a momentary cause célèbre of Obama's Republican critics and turned it into the story of the day. Obama's decision was attacked, the story said, "by Republicans in Congress and Bush-era defense officials" and drew "immediate cheers in Moscow and criticism elsewhere." But the story didn't back up the headline. It merely demonstrated that Republicans, not U.S. allies, criticized the decision, and in an unusual step, the paper corrected its headline to read more accurately, but less sexily, that "Allies React to Missile U-turn." The same day, the paper's other front-page headline read "Bankers Face Sweeping Curbs on Pay." The story was a much less exciting account of the Federal Reserve mulling pay guidelines. But, as media critics noted, the grab-you-by-the-throat headlines were classic Murdoch.

  As Obama staked the first year of his presidency on passing health care reform and the media focused on the debate in all its permutations, Wall Street Journal readers read stories about the flaws of the health care systems in other countries. One outlined how in Britain, dogs had more choice of doctors than people. Another told of a woman in France who gave birth in a fire truck because the hospital near her house had been shut down due to the country's high health care costs. The story noted, "France's woes provide grist to critics of Mr. Obama and the Democrats' vision of a new public health plan to compete with private health insurers. Republicans argue that tens of millions of Americans would leave their employer-provided coverage for the cheaper, public option, bankrupting the federal government."

  Readers couldn't see or know that editors were frequently altering stories in subtle ways. Reporters at the paper noticed that quotes criticizing Republicans or praising Obama were cut. Small editing decisions changed the news—as the Journal reported it—every day. Reporters began to sense that top editors were ordering stories to fit a political agenda. "As News Corp. has consolidated its control of the paper they have increasingly come to demand enterprise journalism that serves the interest and viewpoints of the News Corp. management," Glenn Simpson said. "The upper ranks are now dominated by conservative and partisan editors who aren't shy about making their views known."

  When Ted Kennedy died, the Journal led its obituary with conservative talk-radio host Rush Limbaugh, who derided the "slobbering media coverage" of Mr. Kennedy's death that ignored his past "bad behavior." Mr. Kennedy had been someone who "uses the government to take money from people who work and gives it to people who don't work," Limbaugh said.

  Sometimes individual decisions seemed small and utterly justifiable. After all, news stories were always edited quickly, and there were numerous ways to write about any news event. But when every decision seemed to move in one direction, the reporters took note. Thomson ordered a story on how litigation adds to health care costs. The editor on the piece said it had to be edited within "an inch of its life" to ensure that it wasn't politically biased. Thomson repeatedly objected to another story on how business tax breaks were costing the government more than Congress realized. The story never ran. Tax proposals from Obama were described in a news article as an "assault on business," but the phrase was eventually removed for late editions of the paper after one of the reporters raised objections to the language. Thomson objected to a story on Fannie Mae's and Freddie Mac's roles in the housing crisis as "too anti-Republican." In a news meeting, he once offhandedly commented that the housing crisis was "all the fault of incompetent borrowers." Political reporters often heard requests for more stories on Republicans. Education reporters were told by their editors to write their stories as if "the most conservative reader in the world" were reading over their shoulder.

  Thomson dismissed criticisms of political bias, saying that people determined to see a right-wing slant in a Murdoch paper would see it, regardless of the facts. He felt his Journal was being praised everywhere except for a strange group of "Columbia Journalism School" types who felt News Corp. had cheapened the Journal's brand. He said this group, not his colleagues, were the ones bordering on amoral behavior. Not paying attention to a paper's financial hea
lth was the greatest crime.

  In the fall of 2009, Gerard Baker, Thompson's number two, had joined Thomson in the task of policing the newsroom for left-leaning ideological bias. Baker maintained that he was tough on both Democrats and Republicans, and strove only to provide balance and rigor in the Journal's stories. He said his editing leaned against the prevailing left-of-center bias prevalent in most newsrooms. The former columnist for the Times of London openly mocked Barack Obama and what he saw as the turgid style of American journalists. After several months, he and Thomson had identified reporters in the Journal newsroom they felt were too far to the left. Slowly, the old bureau chiefs were replaced with new ones whom the two men trusted. The old news meetings changed, and the stories on Page One were discussed last, not first. Editors selected front-page photos. At one such meeting, in the long conference room on the sixth floor opposite the hub television screens, Baker groaned when told of a photo of Barack Obama touring Beijing's Forbidden City: "Not Obama again."

  In the 2009 off-year congressional elections, Baker began to show inordinate interest in a minor race in a conservative district in upstate New York. The Republican establishment figure, Dede Scozzafava, faced a challenge from Doug Hoffman, an upstart from the right wing of her party. Political commentators saw it as a symbol of the damaging civil war within the party, but right-wing pundits, often appearing on Fox News, heralded the challenger as the standard-bearer of the ideological purification of the party. When the Journal ran an early front-page story on the race, Thomson and Baker were incensed that a draft of the story contained, as he saw it, too many quotations from Democrats. The quotes were cut. Come the election, the Democrat won, upending the hopes of the insurgent wing of the GOP. Afterward, Baker told people in the newsroom not to draw too many lessons from the election, adding that the Republicans would likely retake the seat the following year. (He cautioned against reading too much into all the surprise wins, including Republican victories in Virginia and New Jersey.)

  At the height of the health care reform debate in the fall, a Washington area think tank, the Lewin Group, conducted a study suggesting that the Democratic health care proposals would lead to a catastrophic influx of new patients on the government-funded health plan, crippling the federal budget. The study estimated that a hundred million people would flow into a government-funded health plan if a public health care option were passed. Baker ordered up a story.

  The health reporter pursuing the piece quickly ascertained that the Lewin Group was not a nonpartisan think tank but was owned by UnitedHealthcare, the health insurance giant—clearly not an unbiased source of information. It turned out that even this front group for an insurance company was going to have to back off its outlandish number, bringing its estimate down to thirty million, a figure more in line with that of the Congressional Budget Office.

  The Journal's health care group prepared a story. At 5:30 p.m. on a Sunday, Baker got a look at it. No longer did the story highlight a sensational figure that might damage President Obama's chances to pass a health care bill. He ordered the story held. Baker shrugged that the Journal's readers wouldn't be interested in a story from such a compromised outfit.

  Editors protested. The story editor argued that Journal readers would be very interested in precisely such stories that pulled back the spin and counter-spin of the debates governing politics and industry. Baker prevailed.

  While the Journal was being transformed, Marcus Brauchli was remaking a newspaper of his own as executive editor of the Washington Post. Rich Zannino joined a private equity firm. The Bancrofts felt exceedingly lucky to have exhibited such impeccable timing. The family was ever divided on the direction of the paper. But on their financial well-being, the Bancrofts were of one mind. "Thank God we sold when we did," said Christopher Bancroft, in a sentiment echoed by others in his family. Many of them received cash from Murdoch, and sidestepped the market's gyrations in the months following the deal.

  Lisa Steele sent Rich Zannino a Christmas card, thanking him for saving her family "from ruin." Elisabeth Goth divorced Robert Chelberg and started riding competitively again, winning two Reserve World Championships in 2009. She thought the paper looked better than ever. The Hills, alas, were still dissatisfied. Leslie Hill continued to feel uneasy about the sale. She couldn't get over her distaste for Murdoch. Her mother, Jane MacElree, worried about the paper's new look. "I certainly don't think it's changed for the better," she said.

  Rupert Murdoch, of course, begged to differ. "We produced a better paper," he said. "I'm sorry but it's as simple as that."

  Acknowledgments

  I could not have written this book without the Wall Street Journal.

  Not only would I have been deprived of a main character and a narrative thread, but I would have been without the professional home that taught me everything I know about recognizing a good story and then telling it. I joined the paper at twenty-four as a news assistant in Paris. It was, as my friend Matthew Rose had promised, like being paid to go to journalism school.

  Writing about the people and place where I learned so much—and where I had personal relationships with many of the book's subjects—was particularly challenging. I endeavored to treat this story as I'd been trained to do, with rigorous objectivity, intellectual honesty, and fairness. The readers' interests were paramount, and I hope they feel well represented.

  Peter Kann created an atmosphere where inspiring journalism flourished. His wife, Karen House, was personally generous to me when she ran the paper's international editions. Fred Kempe, Tom Kamm, and Greg Steinmetz gave me my earliest opportunities at the paper, and I will always remember their patience and generosity.

  Barney Calame and Stuart Karle taught me the rigorous and unwavering ethical standards that defined the Journal.

  Nik Deogun hired me to come to New York and looked out for me on many occasions. He worked with me on my last assignment, to cover Rupert Murdoch's bid to buy the paper. That story gave me the immense privilege of working directly with Paul Steiger, who oversaw the paper's coverage of the deal. I am indebted to the team of editors and reporters who worked with me on that story: Mike Siconolfi, Rich Turner, Martin Peers, Susan Pulliam, Matthew Karnitschnig, Dennis Berman, and Susan Warren. Matt Murray and Margaret deStreel were gracious under tremendous deadline pressure.

  I am grateful to Marcus Brauchli for granting me leave to write this book and promising he would take me back no matter what I wrote, as long as it was true.

  Thanks to my former colleagues, including Geeta Anand, James Bandler, Lisa Bannon, Rebecca Blumenstein, Ellen Byron, Robert Christie, Michael Connolly, Gordon Crovitz, Kevin Delaney, Jesse Drucker, Jennifer Forsyth, Robert Frank, Alix Freedman, Alessandra Galloni, Bill Grueskin, Dan Hertzberg, Larry Ingrassia, Paul Ingrassia, Dave Kansas, Dan Kelly, Kate Kelly, Almar Latour, Peter Lattman, Merissa Marr, Mike Miller, Alan Murray, Emily Nelson, Bruce Orwall, David Sanford, Suzanne Sataline, Sam Schechner, Steve Stecklow, Brian Steinberg, Joseph Stern, Kim Strassel, Suzanne Vranica, Mike Williams, and Rich Zannino.

  My friend Julia Angwin, who juggled a newborn and a book project just a year before I did, was always ready with much-needed encouragement and advice.

  Special thanks to the Bancroft family and their advisers, too numerous to name here, who generously shared their time and the stories of their family.

  I am grateful to Rupert Murdoch and his family for agreeing to talk to me for this book. Thanks to Gary Ginsberg and Teri Everett for their help with my research; to Robert Thomson for his wit; and to Lon Jacobs, Jimmy Lee, John Nallen, Arthur Siskind, Andrew Steginsky, and many other current and former News Corp. employees and advisers who were helpful to me.

  Thanks to Neena Lall for her early transcriptions, Kate Ryder for her research assistance, and especially Nadia Mustafa for her meticulous fact checking. Meredith Angwin provided sage comments on an earlier version of this manuscript. Daniel Okrent, Norman Pearlstine, Ken Auletta, and James Stewart gave me early advice that
was extremely useful. Christopher Dickey and Michael Elliott helped me get to the Journal, and for that I am grateful.

  I couldn't have started, much less finished, this book without the wise counsel and encouraging words of my agent, David Halpern. Kathy Robbins and everyone at the Robbins Office, including Ian King and Rachelle Bergstein, were enormously supportive at every step. George Hodgman at Houghton Mifflin Harcourt was this book's champion. No author could ask for a more passionate or hilarious editor. Special thanks to Andrea Schulz for her encouragement and advice. Barbara Wood was a meticulous copyeditor. Thanks, too, to Larry Cooper and Loren Isenberg at Houghton Mifflin Harcourt for their attention to the manuscript.

  My friends have been a source of sanity: Jenny Carchman, Claudia Campo, Nell Casey, Caroline Cooper, Valerie Lincy, Christina Lowery, Betsy McPherson, Kendra Percy, and Nita Rao. Special thanks to Lexi Reese, Saira Rao, and Lisa Turvey, who were on speed dial.

  Thanks to my in-laws, Erica and Peter Eisinger, for enduring long discussions of book titles. Sarah Eisinger accompanied me on many soul-searching walks around the park.

  My warmest gratitude goes to my parents, James and Susan Ellison, whose unconditional love instilled in me the confidence and work ethic required for a book like this. My mother spent six weeks taking care of my newborn daughter so I could finish the manuscript. My amazing brother, J. P. Ellison, his wife, Lauren Case, and their children, Meredith and Henry, have provided constant love and savvy Web design. The Ellison and Miller aunts, uncles, and cousins were wonderful cheerleaders, especially my aunt Nancy Miller and cousins Carrie and Gretchen.

  To my daughter, Iva: Every author should have such a joyous interruption of the writing process. And, especially, to my husband, Jesse Eisinger, without whom I would never eat a proper meal, much less write a book. Any mention here couldn't possibly reflect my deepest love and thanks.