The Man Who Owns the News: Inside the Secret World of Rupert Murdoch

by Michael Wolff

  Buying the Wall Street Journal was surely an exercise of pure fantasy. To think he could take over a company absolutely controlled by a family that had repeatedly said it would never sell was fantasy. To think it was worth what he was paying for it was fantasy. And yet…now it’s his, and if his shareholders are puzzled and grumpy, so be it (he’ll ignore them as much as he ignores his other critics). He’s in it for the long haul—even at seventy-seven.

  Everybody around him continues to tell him that buying the Times is pretty much impossible. There will be regulatory problems. The Sulzberger family would never ever…And then there’s the opprobrium of public opinion. But it’s obviously irresistible to him. It would be the realization of his destiny. Not just because the Times represents the ultimate in newspaper proprietorship and he believes he is the ultimate newspaper proprietor. But because he believes he is the last person to love newspapers—the only person who is willing to treat them right. He thinks the Times, with its soft stories and newsless front page and all its talk of being a news brand instead of a newspaper—has forsaken what a newspaper is. He is, he believes, the real white knight of newspapers.

  Of course, however plausibly virtuous he’s been so far as the Journal’s owner, he’s still the same ol’ Rupe. I’ve watched him go through the numbers, plot out a Times merger with the Journal’s backroom operations, and fantasize about the staff quitting en masse. He has conjured, too, how, in Murdoch style, he might convince the Sulzbergers to let him in if he promises to leave Arthur in charge—and how he could then make Arthur his puppet.

  Shortly after the Journal takeover, Newsday, the paper that dominates Long Island, was put on the block by its owner, Sam Zell, the real estate magnate who had just bought Newsday’s parent company, the Tribune. It was a rare opportunity. Murdoch could finally, after thirty years, see a way, by combining operations with Newsday, to make the Post pay for itself. But he was ambivalent. Because he was dubious about Long Island (real estate, the economy, etc.). Or because he really didn’t want to think about the Post—he had other things on his mind. Still, he wouldn’t let Mort Zuckerman, the owner of the Daily News, grab Newsday—that would hellishly squeeze the Post. On the other hand, he might not have minded if Cablevision, the cable company based on Long Island and run by the Dolan family, famous New York numbskulls, suddenly and unaccountably interested in the newspaper business, got it. He went back and forth. His intermediary was David Geffen, Wendi’s close friend, who’d gotten close to Zell because he was interested in the Los Angeles Times. It looked good. And although buying Newsday would exacerbate Murdoch’s regulatory problems if he were, ultimately, to go after the Times, he suddenly rationalized this—the Times, after all, was really a national paper now.

  But in fact, the Dolans, numbskulls that they are, bid up Newsday beyond reason. He didn’t mind—they’d run it into the ground, so no threat. But what seemed to happen here as well was that the Post became further unfixed in his mind. He’d traded up. So, suddenly, coldly, his beloved New York Post was in an awkward position. With decisiveness and some clandestine business craft, he began a discussion with the Post’s number one enemy, Zuckerman. (There is an unbecoming setback with some landscaping in front of News HQ at 1211 Sixth Avenue, where, after an interview one afternoon, I spied Mort Zuckerman waiting on a bench.) Everything was suddenly on the table: a possible joint operating agreement, combining ad sales, merging, selling—all scenarios which would lessen the Post’s cash drain on News Corp., his identification with it (as opposed to his new identification with the Journal), and its regulatory drag if he decided to go after the Times.

  His world was new—and getting newer.

  But of course it was the same one, too. By the fall of 2008, having stoked great expectations among his liberal executives and family about his growing Obamaism—“He’s going to do it,” said Ginsberg; “He is a rock star. It’s fantastic,” Murdoch had said about Obama at a conference in May—he began to pull back. Obama was wishy-washy, insubstantial, lacked clarity.

  Indeed, Murdoch was responding to suggestions about his nascent liberalism—in September I discussed his Obama leanings in Vanity Fair—with grumpiness and contrariness. He wasn’t a liberal! Who said that? He was, stubbornly, what he wanted to be, what he decided he would be.

  He could give. He could take. Indeed, the New York Post endorsed McCain in September. Everybody around him who had been reminded of this so many times, was reminded again. He was not a product of circumstances. He created the circumstances. He wasn’t anybody’s foil.

  On the other hand, he couldn’t help muttering. John McCain was so…old.

  By the summer of 2008, with News Corp.’s stock sinking to a six-year low—some people in the company were arguing that this meant Dow Jones hadn’t cost $5.6 billion but rather something like $25 billion, thanks to lost market cap—the unique, and perhaps ridiculous, aspects of News once again came into high relief. No other public company of its size was—or had ever been—such a singular reflection of one man. He had managed to make history’s most unbusinesslike business. He had re-created the idea of monarchy. He had figured out how to monetize his deepest hankerings and whims. He had created a vast, occasionally brilliant, often incoherent, still-unfinished personal statement.

  Murdoch, in August, was in Beijing—for the Olympics—when he had to do News Corp.’s quarterly earnings call with Wall Street analysts. Murdoch, treated by the Chinese with all the pomp and deference due a dictator, was perhaps at his most inflated—feeling both righteous and indestructible. And he was at his most jet-lagged—hence at his most irascible and peremptory and with the most-winnowed attention span. Pure Murdoch, in other words: immortal and irritable—and not about to listen to anybody.

  The analysts’ call was classic Murdoch. He refused to prepare, waved away all advice, and then, on an open line to Wall Street and to investors everywhere, he got distracted, lost his train of thought, and, evidently with other, more interesting things on his mind, was impatient with everybody’s questions and interrupted Peter Chernin. It was a disastrous performance, sending News shares down another 7 percent. Even his most loyal retainers were furious.

  Say what you want, he’d once again made the point:

  It all depends on him.

  ENDNOTES

  PROLOGUE

  Murdoch toying with changing News Corp.’s name: Gary Ginsberg, conversation with author, October 10, 2007.

  Agent provocateur ads: Murdoch interview, October 10, 2007. The ads that finally ran, in a $2 million campaign, had the headline “Defying Conventional Wisdom for Six Decades” and contained a timeline of News Corp.’s acquisitions since 1954. “Today the greatest brand in financial journalism joins up with the world’s most restless global media company,” the ad read in part.

  James’ annual report: Murdoch interview, October 10, 2007.

  West Side railyards bid: After the credit crunch hit, News Corp. dropped out of its bid. Related in March 2008.

  Murdoch wiped out: He added: “It’s awful, the amount of time I sat around thinking about it…I was very calm about it all. I was rather amazed by how calm I was through it all. When it was over I was suddenly tired and I realized just what a nervous strain it had been.” Murdoch interview, September 19, 2007.

  Col Allan breaks cuff link: Former and current News Corp. sources.

  Wanting to sack Dow Jones employees: Murdoch interview, September 22, 2007.

  “Doesn’t he understand it’s our paper now?”: News Corp. executive in conversation with the author, December 14, 2007.

  Keller confronts Ginsberg: Gary Ginsberg, conversation with the author, June 2007. This appeared in the author’s September 2007 Vanity Fair piece about the Dow Jones takeover. In this piece Keller was described as “angrily” confronting Ginsberg; Ginsberg subsequently described Keller’s manner as more edgy or mocking.

  O’Reilly talking dirty: Andrea Mackris v. Bill O’Reilly, News Corporation, Fox News Channel, Twentieth Centur
y Fox Film Corp., and Westwood One, Inc., filed October 13, 2004, in the Supreme Court of the State of New York; settled two weeks later. The New York Post reported that O’Reilly had paid “multimillions of dollars.”

  Richard Johnson takes money: News Corp. admitted that Richard Johnson in 1997 had accepted a “Christmas gift” of $1,000 in an envelope from New York restaurateur Nello Balan, a frequent gossip subject. The company did not deny a claim by fired gossip columnist Ian Spiegelman that Girls Gone Wild founder Joe Francis had thrown Johnson a $50,000 bachelor party in Mexico.

  Jonathan Alter: Conversation with author at Media 3 television studio in midtown Manhattan in September 2007.

  Tina Brown: e-mail to author, September 5, 2007.

  Judith Regan suddenly taken seriously: See Frank Rich, “What ‘That Regan Woman’ Knows,” New York Times, November 18, 2007.

  Murdoch is a “gifted journalist”: “Rupert is a very fine journalist,” Col Allan told Lloyd Graves. “You can take any person on a newspaper—anyone—and he can do their job. He’s simply a gifted journalist.” “Rupe’s Attack Dog Gets Bitten, Keeps Barking,” New York, September 10, 2007.

  Murdoch “has demonstrated a habit over time…”: David Carr, On the Record podcast, http://www.ontherecordpodcast.com/pr/otro/blog-impact-revealed.aspx.

  Murdoch on a New York magazine best-of list: “Reasons to Love New York,” New York, December 17, 2007.

  Marcus Brauchli talking up Murdoch: Interviews with Wall Street Journal reporters.

  Vendetta against Primedia: New York magazine sources.

  “And she believed him”: Interview with Prudence Murdoch, February 28, 2008.

  “Just say what you want to say”: Interview with Prudence Murdoch, February 28, 2008.

  CHAPTER 1

  Murdoch quits smoking: Murdoch, swimming off the coast of Sicily in 2007, made a bet with London Sun editor Rebekah Wade, then thirty-nine, that he could beat her in a race around his yacht. If he won, she had to give up smoking. He told her he gave up smoking at forty-two. Conversation between Wade and the author, October 2007.

  “Too busy to tell you the truth”: Murdoch interview, October 9, 2007.

  Could have had friends: Conversation between Murdoch and his wife in front of his children.

  “Married to the business”: Murdoch interview, October 9, 2007.

  Shyness: Jenkins, The Market for Glory, 69.

  Crippled by shyness: Evans, Good Times, Bad Times, 159.

  Face-lift: “Banned by Fleet Street: Murdoch by His Butler,” Punch, July 4–17, 1998

  Sending his gang back to London: “I more or less pushed them back to London, because I could see they had no understanding, they thought they were having a good time running around New York in limousines. I wasn’t happy with some of them, so…I kept some of them, brought some Australians in, and recruited Americans where I could.” Murdoch interview, October 9, 2007.

  Hardy finds the Murdoch years most satisfying: Bert Hardy interview, October 4, 2007, London.

  E. 72nd Street apartment: Murdoch interview, October 9, 2007.

  News Corp. market cap in 1974: Murdoch interview, October 10, 2007.

  James Goodale: Conversation with author, September 13, 2007.

  Knows Sulzbergers, Katharine Graham, and Leonard Goldenson: Murdoch interview, October 9, 2007.

  “Not just monopolistic, but growing ever more boring”: Murdoch interview, October 9, 2007.

  Hugh Bancroft: After years of mental illness, Hugh Bancroft suffered a breakdown in 1932 and went to live in the blacksmith shop on his family’s Cohasset estate. In the week before October 17, he checked out books from the local library on poisonous gases and then stuffed the doors and windows of the shop so he could gas himself. The New York Times and the Wall Street Journal initially reported the death as a heart attack. Tofel, Restless Genius (from manuscript of April 2008, 99).

  Bancroft family oath: Tofel, Restless Genius (from manuscript of April 2008, 190).

  Bancroft family giving Dow Jones managers carte blanche: Interviews with former and current Dow Jones managers and Bancroft family members.

  Kann avoids an offer: Interview with Peter Kann, May 14, 2008.

  Keeping information from the family: Interviews with Dow Jones management and Bancroft family members.

  Billy Cox: In interviews with reporters who covered the Elizabeth Goth and Billy Cox insurrection in 1997, they said that they had received telephone calls from Dow Jones managers that attempted to smear Billy Cox.

  Cox and Goth blab to Fortune: Joseph Nocera, “Heard on the Street,” Fortune, February 3, 1997.

  Parade of suitors: Interviews with Richard J. Tofel, September 14, 2007, and Peter Kann, May 14, 2008.

  Nothing happens: In 1997, after the Fortune article came out, Bancroft scion Crawford Hill gave a speech at a family meeting, in which he said it was time to change the coach. “It was pretty well acknowledged across the family for the most part that…there is a lot of respect and affections for Peter Kann—he’s a great guy, a great writer, great journalist, no doubt about that—but we also had the same view that this is not a great businessman to be leading this enterprise in the direction that it needs to go. That was well acknowledged—but there was this inability to do something about it.” Interview with Bancroft family member, June 27, 2008.

  CHAPTER 2

  Rupert and Anna Murdoch were married in April 1967, announced their separation on April 20, 1998, and divorced in June 1999.

  Wendi Deng Murdoch was born in the city of Jinan, in Shandong province, on December 10, 1968.

  Murdoch moves to SoHo: Rupert and Wendi Murdoch spent $6.5 million on a penthouse apartment on Prince Street in September 1999. Lachlan and Sarah Murdoch spent $3.5 million on an apartment at 285 Lafayette Street in mid-October, and James bought a $1.35 million apartment on Downing Street in 1998. Kate Kelly and Carmela Ciurara, “The Murdochs of Downtown,” New York Observer, December 26, 1999.

  “His whole family like this. They so cheap”: Wendi Murdoch interview, April 28, 2008.

  Number of homes: Wendi Murdoch interview, May 19, 2008.

  Howard Rubenstein negotiating truce with Mort Zuckerman: Ken Auletta, “The Fixer,” New Yorker, February 12, 2007.

  Murdoch paid $350,000 for a duplex at 834 Fifth Avenue: Motoko Rich, “Make an Offer,” New York Times, October 13, 2005.

  “So WASPy”: Wendi Murdoch interview, April 28, 2008.

  “Incomparably imperial apartment”: Tom Scocca, “Rupert Murdoch: Can the Newspaper Business Outlive the City’s Cunningest Media Mogul?” New York Observer, December 18, 2005.

  Hair dyed orange and aubergine: In interviews with each of Rupert Murdoch’s older children—except James—they all commented on his hair color, as did a number of executives.

  The most difficult press inquiry is about Trump rent: Former New York Post reporter Tim Arango reported in “Mogul Rent Control,” Fortune, October 30, 2006, that Murdoch, under pressure from the press, had decided to pay back the $50,000-a-month rent that News Corp. had been paying for him to live in the Trump Tower while his Fifth Avenue apartment was being renovated. Murdoch had tried to defend the payments on the basis that his official address was still in Los Angeles and therefore the company should pay for his accommodation while working in New York. Claire Hoffman, “Murdoch’s Pay Includes a $50,000-a-Month Rental,” Los Angeles Times, September 9, 2006.

  Murdoch learning about Malone buying up News Corp. shares: Interview with Gary Ginsberg, June 10, 2008.

  “I was asleep or something”: Murdoch interview, January 29, 2008.

  “…nice old man”: Steve Fishman, “The Boy Who Wouldn’t Be King,” New York, September 11, 2005.

  Stan Shuman past his sell date: Murdoch interview, September 19, 2007.

  And never misses a day of work: “I have not missed a single day of work,” Murdoch boasted in an interview with Geraldine Fabrikant and Mark Landler after finishing his radiation therapy. “Just Which Murd
och Will Become the Next Rupert?” New York Times, October 8, 2000.

  Peter Chernin and Roger Ailes ganging up against Lachlan Murdoch: Interviews with senior News Corp executives and Hollywood sources.

  New York Post’s losses: As described by senior News Corp. executives.

  Wasserstein and Murdoch lunch: Bruce Wasserstein and Rupert Murdoch had a falling-out during the Dow Jones takeover when Wasserstein tried to collect a fee from Murdoch for suggesting the deal. Murdoch interview, September 19, 2007.

  Vernon Jordan tells Murdoch to put the money on the table: Jordon also irritates Murdoch by soliciting a fee. Murdoch interview, September 19, 2007.

  Jimmy Lee urges him to look at Dow Jones: Jimmy Lee interview, October 15, 2007.

  Norm Pearlstine and John Huey visit Murdoch: Norm Pearlstine interview, September 12, 2007, and conversation with John Huey, September 11, 2007. When the author first brought up the meeting with Huey and Pearlstine, Murdoch said he couldn’t remember the incident. Yet a description of the meeting—different in some details from the one used in this book—turned up, most likely provided by Murdoch, in a Newsweek profile of Murdoch, “Murdoch, Ink,” by Johnnie L. Roberts, published April 28, 2008.

  Chernin’s reaction to Dow Jones: Peter Chernin interview, January 18, 2008.

  Peter Chernin and his kids don’t read newspapers: Murdoch interviews, September 22, 2007, and October 23, 2007.

  News Corp.’s Olympic book: John Nallen interview, January 7, 2008.

  Murdoch calls Elefante: Murdoch interview, September 19, 2007. Bancroft and Dow Jones sources acknowledge the call took place, but cannot recall high fives.