Of the three daily New York papers in 1976, the Post, which, for two generations has been the sentimental favorite of working-class Jews, is the marginal one, not least of all because there aren’t any working-class Jews anymore. The first death-of-the-newspaper moment is just about coming to an end (it got into full swing with the great New York newspaper strikes of 1962–63 and 1966, which resulted in the closing of four of the city’s seven dailies). Across the country, afternoon papers—the Post in the seventies is an afternoon paper—have closed or merged with morning papers. Most urban markets are moving toward the consolidation into single-owner markets.
The New York Times has the quality, Manhattan-centric market; the Daily News has the working-class outer-borough market. Unless one of those two wants to acquire the Post, there is not going to be any other logical buyer. Murdoch, in some sense, is an old-fashioned newspaper buyer: a man who believes that showmanship—being a better carnival barker—can save the day. He is, furthermore, another classic sort of newspaper buyer: a rich man who wants a platform (forgetting the fact that he isn’t all that rich at the moment). In 1974, those two characteristics make him a market of one.
While Dolly Schiff probably has the wherewithal to maintain the Post’s cash needs, she is deeply relieved—and somewhat incredulous—to find an interested, charming (she is famously susceptible to charming men), promising buyer. Actually, many other people in New York, in its journalism and media community, in its political circles, are relieved too—the anemic Post is about to be rejuvenated.
Overnight, Murdoch is a pet of the city. There’s little goodwill he isn’t accorded. On the night he makes the deal for the Post, he and his small team, along with the lawyers from Squadron, Ellenoff and Stan Shuman and his people at Allen and Company, take a limo from the “21” Club, where the deal is signed, and go on to further celebrations at Elaine’s, the restaurant-bar at the center of the journalist-media-political chattering class that is entirely ready to embrace Murdoch. “You did it! You fucking did it!” Elaine’s proprietor, Elaine Kaufman, shouts at Murdoch as he comes through the door.
Murdoch, in one move, has achieved insider status in the city. This is what people like Murdoch—if not Murdoch himself—aspire to. It’s power, affirmation, and a great social life. You become part of a rarefied and constantly self-congratulating class. This is irresistible for most every ambitious person—perhaps even more so for a foreigner, an outsider.
One night at Elaine’s is apparently enough.
He proceeds to chuck it all with his hostile pursuit of New York magazine.
He does this even before he’s the formal owner of the Post. The Post is his on December 30, 1976. One day later, news of his attempt to take over New York magazine hits the New York Times. As he’s being congratulated for his takeover of the Post, he’s effectively waging a stealth campaign—quite like the stealth campaign he’ll be waging in thirty years for the Journal—against the people who are congratulating him.
As much as the Journal represents, second only to the New York Times, the official establishment voice, New York magazine in 1976 represents the official voice of, well, an evening at Elaine’s.
Born in 1968 out of the Herald Tribune (it began as the paper’s rotogravure magazine supplement), it is, in a sense, the inheritor of the city’s great newspapers—the Journal American, the World-Telegram, and the Sun, which all closed during the strikes of the 1960s. New York magazine, which in the 1980s will come to articulate and be the poster child for the new money culture in New York, began as a reinvention, or last gasp, of New York’s newspaper culture. Which was precisely what has caught Murdoch’s eye: its tough-guy flamboyance, its newsprint bona fides and romance. (The facts that the tough-guy newsmen will turn against Murdoch and that under Murdoch New York will become the great yuppie magazine are another story—a further irony of time and circumstance.)
Murdoch’s takeover of New York—his sense of the opportunity, his stalking of the magazine, his flipping of its investors—is among those events that make Murdoch Murdoch. Or it’s the story out of which other people make Murdoch Murdoch.
The facts, the actual chain of events, of who said what to whom, become part of an imbroglio nearly ideological in its density, conspiratorial in its motivations. It’s a Rashomon moment that will recur with so many of the Murdoch deals—everybody has his own version of how Murdoch manages to do what he shouldn’t, logically, be able to do.
The writer Susan Braudy will later recount in meticulous detail her weekend in East Hampton at the Felker house with her then-boyfriend, New York magazine writer Aaron Latham, and their trip through the hedges to have dinner at Rupert and Anna’s, served, charmingly, by Elisabeth and Lachlan, at which Felker reveals his frustrations with his board—and Murdoch discusses only the price of paper. This same conversation, or at least one similar enough, is said to take place with different secondary participants in a taxicab or at a Yankees game or at Murdoch’s house in upstate New York.
What is clear is that on one side there is Felker and his writers and, on the other, a set of board members who have grown weary of Felker for the most predictable reasons: He spends too much money and gets all the attention.
It’s a difficult bunch. Each board member is, in his fashion, a serious prima donna. Among them are the chairman, Alan Patricof, a small-time investor who, with his flip of the company, will turn himself into one of the city’s best-known media financiers; Carter Burden, the heir to Cornelius W. Vanderbilt and one of the most significant social figures in the city (he and his wife, Amanda Burden, the stepdaughter of CBS founder Bill Paley, were a New York “it” couple of the 1960s—Amanda Burden went on to marry Warner Communications chief, and Murdoch nemesis, Steve Ross); Bartle Bull, another WASP society figure; and the board’s counsel, Ted Kheel, the most prominent labor negotiator in the city.
The striking thing is not the disputatiousness, irascibility, and egocentricity of the New York magazine board—although, even for a media company board, it is rather extreme—but that Murdoch is able to corral and manage them. One of the reasons Murdoch’s ultimate acquisition of the company comes as such a shock to Felker is Felker’s perfectly reasonable judgment that nobody could deal with this colossally dysfunctional group. There is nothing in Murdoch’s background to explain why he should have the political and social skills to deal with some of the most serious egomaniacs in New York. Indeed, New York magazine is, in so many ways, a New York thing, as distinguished from a business thing. He would seem to have as reasonable a chance of prevailing in this world as an automaker from, say, Seoul would have arriving in Detroit.
And it is not just the run-amok personalities for which he has to muster some canny appreciation; not at all intuitively, he has to appreciate the magazine itself. To understand what this particular property can buy him.
Because New York magazine, for all the attention it gets, is still just a bit of local color. It has a relatively small circulation. The company is losing money. Oh, yes, and with New York comes the Village Voice, that left-wing insane asylum Felker acquired two years before and which, perhaps among all the publications in the world, is the least congenial to Murdoch.
So what does he see?
He sees a deal. If the idea is merely to buy things that you can afford, the turmoil at the company gives him that opportunity and a discount.
But after that comes the more complicated and astute perception. Whereas more cautious businessmen would reason that it’s not a great idea to enter a business by engendering profound ill will in the industry in which you hope to succeed—that, in fact, goodwill is a primary currency—Murdoch has the fairly new sense that making a splash is the all-important thing.
Just getting the deal done makes you something. It comes down to, as it so often has for Murdoch, a strong-arm percentage play.
Felker’s deal with Carter Burden, a significant shareholder in the Village Voice, provided that after the acquisition of the Voice, Burden got 2
4 percent of the New York magazine company—but if he wanted to sell, he was obliged to offer it first to Felker. He could not just put it on the open market. This meant that Felker, with his 10 percent—together with the 24 percent that Burden couldn’t sell to anyone before offering it to Felker, along with his other allies—was pretty much guaranteed continuing control. There was one loophole (at least in Murdoch’s telling and as his justification): If the company lost money for four consecutive quarters, Burden would be free to offer his shares on the open market.
Murdoch represents something of a pure experiment. How do people react when an outsider arrives? Felker himself, when he took over the Village Voice two years ago, did it with some of the same tactics as Murdoch will use at New York (the owners of the Voice sued Felker for the same reasons that Felker will eventually sue Murdoch), but, of course, Felker was less an outsider than Murdoch.
“We are faced with a sudden transfer of control…to a foreign publishing conglomerate controlled by a man whose journalistic approach appears alien to us and whose commitment to our city is untested,” declare “the editors, writers, artists, and photographers” of New York magazine in a letter to the board of directors.
What kind of person is willing to be such an outsider, to tolerate being so reviled? What kind of temperament and constitution are required? This is not obvious or intuitive.
The pathology can be missed only by those who are simply too stunned by the accomplishment. In weeks, he’s achieved a level of business recognition that would ordinarily take years—note that, in the editors and writers’ statement, he is now a “foreign publishing conglomerate”—at the expense of his own reputation.
Felker’s fatal mistake is thinking that Murdoch might be his saving grace. He proposes that Murdoch take a stake in New York. Murdoch, despite his friendship, sees the opportunity. He fairly judges that if Felker is offering him a piece of the company, he would offer it to others too, meaning a transaction will likely occur and that the company is in play.
The only real issue, from this view, is 51 percent. Carter Burden and his ally, Bartle Bull, together own 34 percent. Alan Patricof owns 10 percent. The investment banker A. Robert Towbin has about 10 percent. Felker has 10 percent, and so does Milton Glaser, a Felker pal and the magazine’s art director. The rest is held by small, public shareholders.
Murdoch’s approach is around the back. He’s talking to anybody he can talk to—sucking up information, counting votes. It’s politics. It’s junior high, and you’re trying to figure out, through the friends of the girl you have a crush on, what’s her level of interest in you.
This may not be anything more than an incredible appetite for gossip. This is what gets him going. He’s a kibbitzer. The right shading of who wants what, the sense of dispute, of grievance, the opening—having that information moves him. (Murdoch sometimes seems startled by his own success, even embarrassed slightly by, in the recounting, the way the pieces have fallen together. “Luck. There’s just been a lot of luck,” he’ll say. All these side conversations, these countless emissaries, this nonstop phoning, this incredible focus on the game mean he has the wherewithal to create more lucky opportunities than most.)
Patricof becomes the key ally. Patricof himself has used New York magazine as a way to trade up, or bootstrap himself, into a position of some significance. Beginning with a minor financial interest, he’s managed to get his 10 percent of the company. He’s been vying with Felker for dominance too. Indeed, Felker has been trying to push him out of the chairman’s slot on the board. Felker wants that job for himself. What’s more, the stock, which has traded as high as $10 a share, is down to $3.25. Patricof is looking to get rid of Felker or get out himself—at a big number.
Burden, however, holds the power. And he has a short attention span as well as a dilettante’s sense of direction. He won a seat on the city council, but this is starting to bore him. His investment in the Village Voice was about wanting to be a crusading publisher. He sold out to Felker and New York magazine because being a crusading publisher turned out to involve much too much aggravation. Now here he is, the largest shareholder in New York magazine, a position that should be pleasantly diverting but instead is aggravating him. If he could wash his hands of all this, he would. True, he could just sell out to Felker. But, honestly, he has come to loathe the man.
On the other hand, he doesn’t like Murdoch either. Or doesn’t think he likes him. Who is he? An Australian. Everything about him is dubious. But Burden’s lawyer, Peter Tufo, has been talking to Murdoch. Tufo seems to think he’ll pay as much as $8 a share. Get them out of this whole thing. Solve the whole Felker problem.
For Burden, the key point is not to have to think too much about it. So, sure, he’ll sell to Murdoch. Fuck Felker. Theoretically, he has to offer his shares to Felker first, but now he’s being told, on some finer reading of their agreement, he doesn’t have to. So, fine. But don’t bother me anymore.
This is the state of play when Murdoch shows his hand to Felker: He’s picked up the votes.
Felker mounts a brief rally—in the press as much as in the boardroom. He gets his friend Kay Graham to say she’ll rescue him. This is a little bit of a guilt thing, because, after all, she introduced Murdoch to Felker. She let Murdoch in. This will all come round—so many of the players are fixed. Murdoch, understanding the Fairfaxes and Packers, knows this. Thirty years later, Dow Jones will petition the Washington Post to rescue it. (Graham’s lawyer, Martin Lipton, who dives into the New York magazine mess with the Washington Post’s late bid, will over the years come to know Murdoch well and do work for him, and, as it happens, be retained by the Bancroft family in the face of Murdoch’s bid.)
Carter Burden is in Sun Valley skiing and in no mood to take Graham’s or Felker’s calls. But, just to make sure, Murdoch charters a plane on New Year’s Eve 1976, flies to Sun Valley, and puts a check for $2 million into Burden’s hand. It’s done, except for the shouting.
The next two weeks will begin to define Murdoch in New York and in the media world. He’s the outsider. He’s the big guy picking on the little guy. He’s the thief. He’s the guy who forecloses on widows and orphans.
The backlash is fierce. But there is a level of the din that he just doesn’t hear. Partly, it’s that he’s used to it (and he will become ever more used to it). These kind of ad hominem attacks are what naturally accompany anybody who’s in the press. Your competitors, in the business of creating controversy, attack you. Also, he doesn’t really have to be concerned with what people think of him. If it works, it works; if it doesn’t, it doesn’t, and he can just pick up and leave. He understands that he doesn’t really belong here. Any move he makes is bound to disturb. So what the hell.
The Murdoch takeover of New York magazine is the big first event in one of New York’s pivotal and fateful years: 1977 (Son of Sam, the blackout and subsequent riots, and the city’s brush with bankruptcy). Time magazine puts him on the cover as King Kong striding over the rooftops of Manhattan. Newsweek declares, “Press Lord on the Attack.” Simply, Murdoch is made—in those several weeks of heated and rancorous attention, he is created in America.
As a parting shot, Jann Wenner’s Rolling Stone magazine—a key competitor of the Village Voice—runs an account of the New York magazine takeover by New York magazine writer Gail Sheehy. Sheehy, who will later marry Felker, sets in stone the version of Murdoch as the enemy of decent journalists everywhere, the practitioner of businesses practices so underhand and vile that no decent people could ever have a chance against him.
SEVEN The Eighties—Business Guys
MAY 1, 2007
The cultivated courtliness, or lack of coolness, at Dow Jones that has kept it outside the media gossip world is about to be seriously upset by the e-mail Gary Ginsberg receives at 10:46 A.M.
“I know,” reads the message from David Faber at CNBC.
Ginsberg is still recovering from the winter publicity firestorm when—not entirely unrelated
to the bid for the Wall Street Journal—News Corp. turned against one of its stars, the publisher and Murdoch confidant Judith Regan, who was preparing to publish a theoretical “confession” by O. J. Simpson, and then to follow up with a Fox television interview. This was an entirely Murdochian event, but, faced with a sudden media backlash over the tastefulness of paying Simpson for his confession—and with a bid for the respectable Wall Street Journal on his mind—Murdoch uncharacteristically punted on the Regan project. Equally uncharacteristically, when Regan—the type of tabloid character whom Murdoch has always indulged—acted out in response, he fired her. Ginsberg’s immediate thought when he gets the e-mail from Faber is that for the second time in six months, he’ll be managing the biggest media story going.
A baby-faced forty-four-year-old with a perpetually rumpled open-neck dress shirt, Ginsberg hotly disputes his frequent designation as “Murdoch’s PR guy.” That implies he’s a functionary who, after the company acts, processes the information about its actions—sending out the press release. Ginsberg is sensitive on this point, not least of all because whatever he does he gets paid a healthy seven-figure salary to do it, so it’d better be more than handing out press releases. And you certainly don’t want to be perceived as the PR guy to somebody who’s perceived to be the Devil (you might be on the side of the Devil—but not as his PR guy).
Before coming to work for Murdoch, Ginsberg was planning a historic and public career as an intimate of his schoolmate at Brown University, John F. Kennedy Jr. In addition to starting a magazine, George, which wishfully conflated politics and entertainment, the friends were planning their political future. Ginsberg, a lawyer, worked in the Clinton White House for a stint. He was also briefly an on-air personality at MSNBC. It was idle fantasy—and something more—imagining himself with JFK Jr. in the White House.
Since joining News Corp. in 1999, six months before JFK Jr.’s death, he has had a new sort of corporate communications job. It isn’t just corporate communications. It’s something closer to what the communications director does in the White House. Or, considering that Murdoch is one of the most politically influential men in the world, Ginsberg’s job is a greater one. He is the point man for all of the information going out of the company, as well as all of the information coming into the company. Ginsberg has gone, in eight years at News Corp., from an unlikely figure—a liberal Ivy League yuppie and Kennedy-phile in a company that has contempt for Ivy League liberal yuppies and for the Kennedys—to a central one. His job is (although no one at News Corp. will ever say it like this) to protect Murdoch from himself. Or to protect News Corp. from its worst and basest impulses. When Ginsberg was first interviewed for the job, in the aftermath of the shit storm following Murdoch’s abrupt cancellation of Hong Kong’s last British governor Chris Patten’s book—because of negative comments Patten had made about various Chinese government officials with whom Murdoch was then trying to curry favor—the main question for Ginsberg was how they should have done it differently. Ginsberg said the obvious: They shouldn’t have canceled the book, since that just called attention to it.
The Man Who Owns the News: Inside the Secret World of Rupert Murdoch Page 17
