And now his climactic eighties moments are at hand.
Except, not yet—first there’s some personal business. This occurs out of view of most of the world. Indeed, he is using his eighties might to do something very un-eighties. He buys his father’s old company, the Herald and Weekly Times, which, with his own holdings, gives him almost 60 percent of the newspaper market in Australia.
The deal is significant not just because of its impact on Australia (and its price: $1.6 billion) but because it makes no sense from the point of view of the new global media company he’s created in the United States. Or it only makes sense if one is to conceive of the company not at all as a coherent vision, a calculated strategy, but as a hodgepodge of Murdoch’s own interests, hankerings, experiments, bets—and personal, idiosyncratic acts of dominance. It makes no more sense, at this point in its development, for News Corp. to monopolize the newspaper business in Australia than it would for Time, Inc., to monopolize it.
From the strict eighties point of view of brutal corporate rationalization—wherein a company should be a cold and efficient instrument for maximizing value—the renewed interest in Australia seems preposterous. But from that other eighties construct, the charismatic CEO—wherein certain rare executives are believed to be so prescient and all-knowing that they can, like a big star who can carry a dog of a movie, defy logic—is what you’re betting on.
The second climactic moment of the Murdoch eighties is Wapping—the newly built headquarters and printing facility for his U.K. newspaper operation in east London. Grasping historical imperative and the zeitgeist, he makes common cause with Reagan and Thatcher (Murdoch might arguably join them as part of the eighties values triumvirate) and in 1987 breaks the British print unions after a strike that lasts more than a year.
The success of his move is not just in the breaking but in the historical revisionism. At the time, having erected a prison-like, totalitarian-seeming printing complex on the bank of the Thames and then secretly moving his strikebreakers in and keeping his unionized workers out, he creates one of the ugliest, potentially most explosive standoffs between labor and management in industrial history. Murdoch is anathema to all right-thinking liberal people. He is the thug, the brute, the boot.
At twenty years’ remove, however, there will be only one story line: The union printers are thieves and nihilists who hold newspapers hostage and have brought the business to the point of bankruptcy (they are also censors who will regularly stop the presses over articles they don’t like), and Murdoch is the bloke who finally says, Enough! What’s more, he is the clever bloke, creating at Wapping one of the most brilliant subterfuges, one of the grandest deceptions—he manages to convince the unions that he is starting an entirely new paper there—since D-Day. He’s even credited with some altruism: It is his move against the unions that empowers his competitors too, indeed even provides the wherewithal for the Independent to launch and compete directly against Murdoch’s Times.
It doesn’t stop. He owns a minority position in William Collins & Sons, a leading British book publisher, and so acquires the U.S. publisher Harper & Row ($300 million), and shortly thereafter turns around and scarfs up the rest of Collins, which he has previously promised not to touch. And suddenly News Corp. owns one of the world’s biggest book publishers—a business or pastime (reading books) he has almost no interest in at all.
He grabs 20 percent of Pearson PLC, which owns the Financial Times. His notion is either to buy Pearson outright or, failing that, get it to give him the concession to publish the Financial Times in the United States. (This doesn’t happen.)
He hits number eight in 1987 on Forbes magazine’s list of the four hundred richest Americans, with an estimated net worth of $2.1 billion.
Oh, and there is the South China Morning Post. For $300 million he converts a minority stake into a controlling interest because Dow Jones, with 19 percent, decides it doesn’t want to be in business with Murdoch and agrees to sell him its shares. (Doing this deal is the first time Peter Kann meets Rupert Murdoch.)
And there’s the greatest cash suck News Corp. has ever faced: the launch of the four-channel Sky satellite service in Britain. While he wins his battle to launch before his better-funded competitor BSB, the problem is that it’s a business without customers—and, practically speaking, without a business plan. Indeed, he’s launched into the void before anybody has satellite dishes to support his programming.
Then, straining all credulity, he makes his costliest purchase so far. For $3 billion, he buys Triangle Publishing, which owns TV Guide.
And he is thereby, at the close of the 1980s, $7.6 billion in debt—and shortly to be on the brink of ruin.
But pay no attention to that.
Dow Jones in the late eighties, with its three-section Wall Street Journal, the world’s dominant business information brand, misses the main point of its own success: The Wall Street Journal, for better or worse, construes its role as that of observer, its job as journalism, rather than seeing its business as business. That, because business has become so complex, so competitive, so fetishized, really—and because the amounts of money in business have become so much greater—information about business has become so much more sought-after and valuable. While the Wall Street Journal understands that the business world has undergone a profound change in character and function, it doesn’t understand that it should, accordingly, undergo such a change too. Its resistance may well be honorable—if you change your function, you change your meaning. It wants to stay a newspaper, that leisurely, narrative, fussy, everyman thing.
Meanwhile, other, lesser providers of business information—not least of all Michael Bloomberg’s new company and Reuters—are servicing the business information customer with much more specific, efficient, accessible data for which they can charge a hell of a lot more.
Murdoch, who, like the people at Dow Jones, enters the eighties as principally a publisher, a man who understands the publishing business, exits it as a practitioner, a connoisseur, a lover of business itself—committed to going wherever the transforming nature of business per se, and the media business in particular, takes him.
The people at Dow Jones enter and exit the eighties as newspaper people.
MAY 2007
Late in the day on May 1, after CNBC’s disclosure of Rupert Murdoch’s bid for the Wall Street Journal, Michael Elefante publicly releases the results of the poll he’s been trying to conduct since the April 24 family meeting. By his tally—and he’s careful to describe the equivocal nature of the count—family members representing slightly more than 50 percent of the vote seem to be opposed to Murdoch’s offer. The message here, of course, is not about the majority being against the deal, but rather that the historic, vaunted, implacable opposition of the family is so weak. It is a sign of such clear uncertainty, ambivalence, and, apparently, consideration of the offer that by the end of the market day, Dow Jones, which has been trading in the thirties for the past three years, closes at $58.
At their hastily convened board meeting the next day, the new financial reality is explained in terms that nobody on the board had quite ever appreciated or considered. The nature of trading practices that began in the 1980s, which the Wall Street Journal wrote so vividly about, has now consumed the company. That is, between David Faber’s first report of the offer at noon and the close of the market, Dow Jones has had a profound turnover in its shareholder base. Its long-term, stalwart, and, to a degree, understanding holders of its common stock have been replaced by arbitrageurs—including Warren Buffett—who have bought the stock at well north of its natural price and who will only be satisfied if there’s a deal (Murdoch’s or anyone else’s) struck for $60 or higher. In other words, Dow Jones is now formally in business with partners who will do everything possible to make it sell—and who will be impossible to live with if it doesn’t sell.
And then, on May 5, another 1980s-style shoe drops.
Four days after news of the Murdoch o
ffer for Dow Jones goes public—and likely spurred on by this announcement—Canada’s Thomson Corporation, one of the world’s largest publishers of business information, and Reuters, the news service and business data supplier, announce their plan to merge, presaging all sorts of vast dislocations in the market.
This could seem just like Murdochian dumb luck. Here he is trying to buy a company and, voilà, its two most logical saviors—his most logical competitors for Dow Jones—decide to merge, meaning they won’t be able to bid for Dow Jones. What’s more, Dow Jones, already dwarfed as a supplier of financial information, is suddenly even more circumscribed, reduced, limited.
Even Murdoch thinks he’s been strangely and inexplicably smiled on by this development. But other than that, the announcement is so fortuitously timed for him, it seems rather predestined—just one more piece of historical inevitability that Dow Jones has been in denial about for years.
Oh, shit, is what Michael Elefante thought when he got the call on March 29 about Murdoch’s expected $60 bid for Dow Jones.
Oh, shit, is what he thinks again when, five weeks later, he hears about Thomson and Reuters.
EIGHT It’s a Tabloid World
MAY 11, 2007
Murdoch is restless—annoyed by the Bancrofts’ lack of response to his offer.
While he knows what they must think of him, he still can’t believe that they really think this—they must just be listening to other people who don’t know him.
He decides to write directly to the family. He means his letter to be from one newspaper family to another. He talks about his father being a wonderful guy and mentions Gallipoli (which may be puzzling to members of the Bancroft family not up on their World War I secondary-battle history). He talks about his own children and how News Corp. is a family company. And that he thinks that interfering with the Journal and its long history of editorial independence would be bad for business. He mentions that he’d be amenable to an editorial board structure similar to what was put in place at the Times of London and Sunday Times newspapers when he bought them in 1981.
The Bancrofts receive his letter as though it’s a communication from a far-off planet: While it is perhaps meaningful, there’s no sense that a timely response might be in order.
It’s confounding for him being out here in what feels like limbo. He isn’t often ignored.
MAY 18, 2007
By all rights, the bottom should have fallen out of the deal. Or, if the issue actually was the standards and practices of journalism and the Bancroft family’s commitment to protecting the same—and if a bald demonstration of Murdoch’s idea of standards and practices was needed to remind everybody about what exactly was at stake—the deal should have died on the spot.
That morning, “Page Six,” the New York Post’s gossip franchise run by Richard Johnson, publishes an item about itself. Scooping everybody else, “Page Six” confesses to a long list of extraordinary ethical derelictions and abuses of power of which it will shortly be accused in a lawsuit by a disgruntled former employee.
One disgruntled former employee is piggybacking on the charges of another disgruntled former employee, and both stories provide a window into the Murdochian tabloid world. In 2004, Ian Spiegelman, a “Page Six” legman of long standing, used the page to wage a vendetta (his e-mail threatened violence as well as bad press) against a demimonde flack over a woman. In 2006, Jared Paul Stern, another legman on the page—both Spiegelman and Stern had rather styled themselves in the tradition of the most cynical and noir gossip columnists of the forties—was accused by supermarket billionaire and Bill Clinton friend and partner Ron Burkle of conducting a shakedown. Burkle, who was secretly video-taping the meeting, had Stern name him a price for arranging favorable coverage and for smoothing the unfavorable.
Stern, who was fired shortly after Burkle made the claims, is now threatening to sue News Corp., in the process revealing that Johnson himself took at least one bribe, which “Page Six” now admits to (terming it a “Christmas gift”). In addition, Stern is set to claim in his suit that the editor of the Post, Col Allan—the thirty-four-year News Corp. veteran and Murdoch family favorite—was regularly provided with liquor and sex at a New York strip club. While “Page Six” does not deny that he frequented the club, it advises nevertheless that Allan’s behavior was “above reproach.” The litany of other claims that have been acknowledged with great umbrage and fulmination but not explicitly denied (save for boilerplate protestations about “smears and lies”) include all manner of other extortions, pay-for-coverage schemes, and, in one instance, the allegation that the price of Lachlan Murdoch’s house in Australia, when purchased by the actor Russell Crowe, included a guarantee protecting Crowe from bad press in the Post.
Prepublication, these revelations caused vast panic on the eighth floor at News Corp. Genie Gavenchak, the company’s compliance lawyer, found that Allan did in fact, despite denials, use his credit card at the strip club in question—so they knew the jig was up, and the story would surely come out. It was Gary Ginsberg’s idea that “Page Six” ought to gossip about itself, and, in fact, Ginsberg negotiated the “confession” with Allan.
Allan believes he’s about to be fired and, certainly, Murdoch is furious with him and deeply worried about how the Bancrofts will react. Murdoch, nevertheless, used to suffering the bad behavior of hacks, lets it ride.
HIS NEWSROOMS
The newsroom at the Wall Street Journal, in the World Financial Center—put up on the landfill from the excavation when the World Trade Center was built in the 1970s—has seemed to Murdoch, on the few times he’s visited, rather more like the backroom of an insurance company than a news operation. It’s quiet, orderly, businesslike—or, you might say, strangled, repressed, dead. Murdoch didn’t think the place, so “depressing and without energy,” could be the newsroom. They obviously need, he will tell me later, “a change of culture, a change of scenery.”
Newsrooms in Murdoch’s world are id places, where reporters express instinctive impulses that, ideally, mirror the unexpressed impulses of their readers. Murdoch’s favorite reporter, his totemic reporter, over the fifty years of his newspaper career is Steve Dunleavy, who worked at News Corp.’s Sydney paper, the Daily Mirror. In the 1960s, he preceded Murdoch in heading to New York. Now, at sixty-nine, he can be found on many afternoons—and mornings—drunk at Langan’s, among the least appealing bars in Manhattan (think tourists in funny T-shirts), but where anybody who is anybody at the New York Post stubbornly congregates. Similarly, in Sydney, on any given evening you’ll find the cream of News Ltd.’s reporting staff at the Aurora, a twenty-four-hour last-stop bar filled with slot machines, fluorescent lighting, and the occasional white Aussie male salsa dancer. It’s the only remaining nongentrified spot in revivified Surry Hills, where Lachlan Murdoch has his chic offices.
Newspapers, to Murdoch, are an ungentrified idea. They are an immediate, often crude act. The energy you feel in a good newsroom comes from speed, good reflexes, and that highest Murdoch standard, a lack of pretense.
The Journal newsroom in New York and its annex in South Brunswick, New Jersey, are foreign and desultory places to Murdoch—unlike the truly horrifying places where his reporters have in years past worked (and found secretly exhilarating).
From Peter Chippindale and Chris Horrie’s classic account of Murdoch’s Sun, Stick It Up Your Punter!:
The horrible conditions in the rackety old Bouverie Street building only added to the air of adventure about the enterprise…. Inside, the building was cramped, dingy and smelly. The corridors and stairway were cluttered with leaky vats of acid and various other chemicals used in the process department to make plates for the presses. The ceilings were a tangle of ducting carrying electrical and drainage systems which had haphazardly evolved over the decades, defying any logical system of safety or planning. On one occasion an acid drain split overnight and the News of the World hacks arrived in the morning to find the typewriters on their desks red
uced to smoldering and partly dissolved lumps of metal. Facilities were rudimentary. The toilets were foul and swarmed with bluebottles in the summer. The canteen was filthy and infested with rats, giving the hacks another excuse to get out of the office into the Fleet Street pubs, where they could tap into the grapevine of what was happening at the other papers….
But the squalor did make Bouverie Street an exciting and unpretentious place to work, with the day always dominated by the subconscious anticipation of press time, when there would be a deep rumble from the basement as the presses began to roll.
Such traditions and theatricality are not so much the point for Murdoch (he’s hardly a sentimentalist—he ultimately moved the Sun and News of the World to antiseptic conditions in Wapping, and the New York Post from rat-infested digs above the trucking bays on South Street to News Corp.’s headquarters on Sixth Avenue) as the basics. Murdoch has a fixed notion of journalism—tinkering with it or dressing it up doesn’t, to him, make it significantly more than it is. He has, in fact, a visceral revulsion, or contempt, for the dresser-uppers. It’s artifice. It’s fake. It’s disreputable. And it always results in copy so much longer than it needs to be.
“There’s levels and levels of editing,” he will tell me incredulously after an early tour of the Wall Street Journal’s newsroom. “Every story gets edited about five times. Then it goes down to Princeton, where they put the paper to bed, there’s 150 people there and they say, ‘We do everything in a final edit to make sure everything is absolutely right and we check the sources and stuff.’ And I thought, ‘Oh my God, it’s a wonder anything ever gets in the paper or on time.’” (He will often tell this story with the number of edits varying from 5 to 8 to 8.7.)
The Man Who Owns the News: Inside the Secret World of Rupert Murdoch Page 21
