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

by Michael Wolff

  Blind-sourced piece: Steve Fishman, “The Boy Who Wouldn’t Be King,” New York, September 11, 2005.

  Reorganizing the company around a crush: Murdoch briefly gave up control of his European operations in the early 1990s to create a job big enough for Andrew Knight, the former head of the Economist, with whom he’d become smitten.

  Murdoch meets Robert Thomson: “I think someone mentioned him to me. Five or six years ago, it was when he just missed the editorship, because he was the staff candidate…And that he was unhappy and talked to CNBC, all right. And I just called him up and said, ‘Come and have a beer.’ And we met at the Dervish round the corner. And we had two or three subsequent meetings there.” June 2, 2008.

  Fart joke: Rebekah Wade: May 8, 2008

  Thomson’s and Murdoch’s wives: Wendi Murdoch is well aware of the rumors flying around News Corp. that her husband’s friendship with Robert Thomson is based on their younger Chinese wives, who were both pregnant when they met. “People say, ‘Oh, they hired Robert because he has a Chinese wife.’…Like we were best friends. No. I’m friendly with everybody’s wife. We see them a lot. She’s Chinese, so obviously we talk. Our children play together.” May 19, 2008.

  CHAPTER 3

  Andy Steginsky’s role: Andrew Steginsky interviews, December 13, 2007 and May 23, 2008.

  Murdoch on the phone: “If I needed to talk to him you could always get him on the phone…no matter where he was he would take the phone calls. Rupert would take phone calls from people that he has no idea who they are. I mean, he is unbelievable in this way. The shoeshine boy called him up and he would take his phone call. That is part of his makeup, but if I get him a message that it’s important to speak to him, he’d either drop what he’s doing immediately or get right back to me. It’s never been an issue.” Senior News Corp. executive, June 3, 2008.

  “I could make some calls”: Conversation between Steginsky and Murdoch, as recalled by Rupert Murdoch, September 19, 2007.

  “And so I hung up the phone”: Andrew Steginsky interview, December 13, 2007.

  “I would not underestimate the Times in that regard”: Robert Thomson in conversation with author, November 15, 2007.

  “She was an okay mother”: Murdoch interview, March 21, 2008.

  Dame Elisabeth’s reaction to Wendi: Interviews with Murdoch family sources and News Corp. executives.

  Dame Elisabeth interview, February 25, 2008.

  Murdoch ancestral history: Shawcross, Murdoch, 29–46. (Also on the Free-churchers see: William D. Maxwell, A History of Worship in the Church of Scotland [New York, 1955], 59; A. MacKay, Cruden and Its Ministers [Adelaide, 1912]; A. Macdonald, One Hundred Years of Presbyterianism in Victoria [Melbourne, 1937]; C. McKay, This Is the Life [Sydney, 1961]; J. La Nauze, Walter Murdoch [Melbourne, 1977]; D. Zwar, In Search of Keith Murdoch [Melbourne, 1980].)

  Keith Murdoch’s role in Gallipoli: Knightley, The First Casualty, 106–10.

  “A newspaper is to be made to pay”: Hamilton Fyffe, Northcliffe: An Intimate Biography, 83.

  Murdoch’s childhood: “The common theme in these stories, which are told affectionately, is power and denial,” Chenoweth, Rupert Murdoch, 37.

  Sir James Darling apologizes: Shawcross, Rupert Murdoch, 54.

  Murdoch attempts to buy school newspaper: “I remember one specific occasion, a conversation I had with him when he was interested in the possibility of buying the undergraduate magazine Cherwell. That never came to anything, whether it would have anyway I don’t know, but I told him I thought Cherwell would never get enough advertising from the sort of ordinary university advertisers to make it profitable. And he was enthusiastic, as he always is. No doubt if he had got it he would have made it a much livelier magazine than it then was. I think he saw me probably as a potential investor. It would have been a very exciting project in his hands. Anyway he went down at the end of that year after his father died and it certainly never came to anything.” William Rees-Mogg interview, August 2008.

  “It was very hard”: Dame Elisabeth interview, February 25, 2008.

  The history of the Fairfaxes: John Fairfax—printer, bookseller, stationer, born in Warwick, England, in 1804—arrived in Sydney in 1838, not long after the arrival of Murdoch’s great-great-grandfather George Govett. Fairfax bought the Sydney Herald and quickly turned it into the most popular newspaper in the colony, changing its name in 1841 to the Sydney Morning Herald. Its values were Protestantism, the British monarchy, and free enterprise. It came to define the establishment—and was fondly called, for the next 150 years, the “Granny Herald.” It cemented its hold in the 1850s, Australia’s famous boom era, when gold was discovered. John’s sons, Charles and James, joined the firm and, in 1860, launched the Sydney Mail. The company passed to the first son, Charles, who died in 1863, falling from a horse, and then to James, who ran the paper for the next sixty-seven years and became arguably the most influential person in Australia. Certainly the Sydney Herald is unrivaled in its influence. It ranks with the greatest papers—the London Times, the New York Times, the Wall Street Journal—for its probity, respectability, and establishment snobbery. (It represents exactly the kind of elitism that Murdoch came to resent and covet.) Among them there was only one heir: Warwick Oswald Fairfax, who in 1926 become chairman at the age of twenty-five. The company’s real period of expansion happened after the Second World War, when it launched the Australian Financial Review, started the Sun-Herald and the Sunday Morning Herald, and bought Associated Newspapers, publisher of the afternoon Sun and various magazines after a takeover battle with Sir Frank Packer’s Australian Consolidated Press. In 1956, the Fairfaxes entered the television business, which they would come to dominate while continuing to make print acquisitions.

  The history of the Packers: R. C. Packer was a Sydney newspaperman who in 1918 lucked into a one-third interest in a new national periodical called Smith’s Weekly, which, with a populist tone and lots of pictures, was an instant success. Shortly thereafter, Packer and his partners launched the Daily Guardian in Sydney, a mass-market tabloid, which aped the Northcliffe techniques, at just the same time Keith Murdoch was aping them at the Herald in Melbourne. R. C. Packer was a notorious son of a bitch, as was his son Frank. In 1932, R. C. Packer, having sold his interests at great profit, became the top executive at Associated Newspapers, which owned Sydney’s sole afternoon paper, the Sun. Frank Packer, in a low-grade bit of deception, managed to make many people believe he was about to launch a competitor to the Sun. As it happens, he didn’t remotely have the money to do this. Nevertheless, his father paid him the equivalent of almost $4 million of Associated Newspapers’ money not to do what he, as it happens, could not have done. So it goes. With that dough, in 1933, Frank started Women’s Weekly, which would shortly become the largest-circulation magazine in Australia and the basis of his empire. There followed wild and successful expansion into newspapers, radio, and television.

  Murdochs vs. Packers vs. Fairfaxes: Right up until Murdoch’s son, Lachlan, and James Packer went head-to-head over Super League in the nineties, the families would try to take what belonged to the other. These were battles fought for business turf, for political influence, for strategic advantage—fought by families that were as intertwined and fundamentally alike as any could be. The only reason for the ritualized enmity, ruthless competition, and instinctive backstabbing was that it was a zero-sum game: Only one would prevail generations hence.

  See Griffen-Foley, “The Fairfax, Murdoch and Packer Dynasties” Barry, The Rise and Rise of Kerry Packer.

  Murdoch vs. Packer brawl: “Kerry Packer: The Times Obituary,” Times (London), December 27, 2005.

  Banking relationships: Chenoweth, Murdoch, 74–77; Shawcross, Murdoch, 74–76.

  Peter Kann lunch: Interviews with former Dow Jones executives and Peter Kann, May 14, 2008.

  Sulzberger’s offer reported: Ken Auletta, “Family Business: Dow Jones Is Not Like Other Companies. How Long Can That Go On?” New Yorker, N
ovember 3, 2003.

  Bancrofts’ learning of New York Times bid through New Yorker, reaction to share price, and family meetings: Bancroft family member interview, May 28, 2008.

  Kann pushing up his retirement: Dow Jones executives and Bancroft family interviews.

  Peter Kann wants to give his wife the top job: Karen House denies she was interested in the job of chief executive. “I believe I was the most qualified person at Dow Jones to be publisher, and I was given that job. I had no interest in being CEO. I said that repeatedly in the presence of Rich and Gordon and Peter.” Peter Kann said she had informed the special committee appointed to look for his replacement and him about her lack of desire to be CEO. Karen House interview, June 25, 2008; Peter Kann interview, May 14, 2008.

  Karen House, a figure of great contention: Descriptions of House provided by Dow Jones executives and Wall Street Journal reporters in interviews. See also Katherine Q. Seelye, “Dow Jones Turns to Financial Side in Naming Its New Chief Executive,” New York Times, January 4, 2006.

  Peter Kann’s succession: A succession plan had been knocking around the company since the Telerate debacle in 1997. Bancroft family interviews.

  Dow Jones directors meeting: As described in interviews with Dow Jones executives and board members.

  CHAPTER 4

  Jimmy Lee introduces Murdoch to Richard Zannino: Interviews with Murdoch, September 19, 2007; Lee, October 15, 2007; and Zannino, November 1, 2007.

  Perceptions of Zannino: Interviews with Dow Jones executives and Wall Street Journal reporters.

  “shit-eating grin”: Interviews with Wall Street Journal reporters.

  “It wasn’t like you should work there”: Bancroft family member, May 28, 2008.

  Bancroft family history: See Wendt, Wall Street Journal.

  Jane Bancroft’s oath: Ibid., 235.

  Nature of Bancroft trusts: Interviews with Bancroft family members and their representatives.

  Merrill Lynch presentation: Interviews with Bancroft family representatives and Merrill Lynch advisors.

  Hills thinking of suing: Interviews with Bancroft family representatives, Murdoch, and Steginsky.

  Murdoch on the Newhouses: Murdoch interview, September 22, 2008.

  Prue: Prudence Murdoch interview, February 28, 2008.

  Murdoch offers MacLeod a job: “You tell Dad to get off my turf right now,” Prudence screamed at her father’s secretary, Dot Wyndoe, when she called to patch through Murdoch to his son-in-law about a job at the Times of London.

  “…dirty old man”: Australian Broadcasting Commission, Inside the Murdoch Dynasty, 2002.

  Elisabeth attends Geelong Grammar: Matthew Freud.

  Elisabeth suspended for drinking: When Prue’s oldest son, James, was suspended for drinking from school, she e-mailed her sister Elisabeth to say, “He’s following in your footsteps.” Elisabeth lectured James, “Don’t do what I did. It ruined my education. I never got over it.” But as Prue points out about her sister, named Business Woman of the Year by Harper’s Bazaar in 2008, “What a shocking life she’s had.” Prudence Murdoch interview, February 28, 2008.

  Elisabeth disappears on a Vespa: Petronella Wyatt interview, November 12, 2007.

  Elisabeth gets into Stanford: Elisabeth Murdoch interview, November 15, 2007.

  Elisabeth “has some things to work out…”: Mathew Horsman, “Sky: The Inside Story: Bowing Out to the Inevitable,” Guardian, November 10, 1997.

  Murdoch children in New York: Geraldine Brooks, “Murdoch,” New York Times Magazine, July 19, 1998.

  Lachlan’s lack of a job: Interviews with News Corp. executives on both the East and West Coasts.

  James Murdoch: Annette Sharp, “The Diary,” Sun-Herald (Sydney), June 18, 2000; Raymond Snoddy, “The Saturday Profile: James Murdoch,” Independent, August 6, 2005; Valerie Block, “The Dutiful Son: Spare Murdoch Heir, a High-Tech Kid, Waits Patiently to Rotate into New Post,” Crain’s New York Business, August 10, 1998; “A Grass-Roots Murdoch,” New Yorker, September 16, 1996, 44; “Like Father, Like Son,” Economist, November 8, 2003, 64; Madden Normandy, “James Murdoch,” Advertising Age, January 26, 2004; “Young Murdoch’s Asian Adventure,” Ad Age Global, May 2001, 30; Raymond Snoddy, “Murdoch Son Attacks BBC’s Global Claims,” Times (London), August 28, 2000.

  Tunku Varadarajan on James: “Bad Company Rupert Murdoch and his son genuflect before Chinese communists,” Wall Street Journal, March 26, 2001.

  James is the “real thing”: Interviews with News Corp. executives.

  James as recluse: James Robinson, “James Murdoch: Triumph of the Family Man,” Observer, December 9, 2007.

  James’ wedding vows: Rohm, The Murdoch Mission: The Digital Transformation of a Media Empire, 41.

  Excerpt from Charlie Rose: “A Conversation with Rupert Murdoch,” The Charlie Rose Show, July 20, 2006.

  Wendi and Murdoch fight: Interviews with News Corp. executives.

  $45 per share projection from Zannino: Interviews with Dow Jones executives and Bancroft family members.

  Lee meets Murdoch and the boys at Sun Valley: Jimmy Lee interview, October 15, 2007.

  Who’s paying Lee’s fee: Richard Zannino interview, November 1, 2007.

  Links Club meeting: Interviews with Lee, Murdoch, and Zannino.

  CHAPTER 5

  John Nallen updates the book: John Nallen interview, January 7, 2008.

  JPMorgan Chase meeting: Interviews with Murdoch, Lee, and Zannino.

  Zannino as a seller: Zannino denies he was looking to sell the company and insists that he was trying to increase shareholder value—and succeeding—on the basis of the plan he had set forth not long after he took the reins as CEO. “Jimmy calls me after that lunch and says, ‘What should we do next?’ And I said, ‘There’s nothing to do. The family’s not a seller, Rupert’s not a buyer, and, you know, we’re not talking about it at lunch.’ We’re working the plan.” Rich Zannino, November 1, 2007.

  Jamie Dimon stops by: Interviews with Murdoch, Lee, and Zannino.

  Murdoch doesn’t look back: Wendi Murdoch notes: “I think also, he’s not sentimental about things. Most people, if something happens, they feel depressed. Urgh. He’s like, he feels bad for the day and then…I remember with DirecTV that was so close. He didn’t get it, he did feel bad, but the next day he was…We didn’t know until dinnertime when we saw…and then we went to Col Allan’s house for curry dinner. Then next day he started working on the lobbying for Washington. I think he thrives on stress. Rather than feel sorry for himself, he was thinking what to do next. You know, if he didn’t get it, it doesn’t bother him that much.” April 28, 2008.

  Who is the establishment: Murdoch interview, October 10, 2008.

  Hunting story: Chapman Pincher interview, July 2008: “Harry Hyams, the property developer, has a country house and estate called Ramsbury Manor, in Wiltshire. Probably the most beautiful house that’s liveable in, it’s not all that enormous. He has made it even more superb by restoring it. He has a pheasant shoot there. I was a very keen pheasant shot. Harry had six shoots a year and he used to ask me to them all. You had some very interesting people there, such as Grand Prix racing driver Graham Hill, all sorts of people from all walks of life. He told me that this fellow Rupert Murdoch would be coming with his wife, Ann[a], who I remember as being rather tall and blond. She didn’t have a lot to say for herself, but I thought she was very nice. He turned up in brand-new shooting suit, with knickerbockers—you could see it was absolutely brand-new—and what looked to me, as an old hand, like an absolutely brand-new twelve-bore, side-by-side gun. I wondered how much shooting he’d done, because they don’t have that kind of shooting in Australia. These were driven birds and some of the drives were very special. There were a couple of drives called the plantation drives. The birds were very high and very difficult. They weren’t only high but they were dropping. Rupert remembered having met me, and he said, ‘Would you keep telling me what to do? I don’t really know what to do. I�
�ve never done this before.’ I said, ‘Sure.’ So we lined up and he happened to be drawn next to me, or maybe I got Harry to put him next to me. Anyway, we were next to each other. He said, ‘What do we do?’ I said, ‘When the birds come over, you’ll find they’re very difficult. But the first rule is not what to shoot at, it’s what not to shoot at. You don’t shoot at your neighbor’s birds. You don’t shoot at birds that are going over me and clearly going to come to me, and you don’t shoot birds that are going to come to your neighbor on the other side. The next thing is try and imagine that you’re shooting slightly in front of the birds.’ Well, the birds came over him, there were quite a lot of them, and we all had a rip-roaring drive. They were very difficult. He didn’t disturb a feather, didn’t hit one. By the end of the day he was knocking them down. He was that sort of guy. You could see right away, if he wanted to he would make a good shot. A lot of people say, ‘Bugger it! I can’t do this.’ But not Rupert. By the end of the day he was acquitting himself quite well. We were all rather impressed. Quite honestly, I don’t think he’d fired at a pheasant before in his life. The only other thing I remember about that conversation was that he bellyached to me, when we were walking together between drives, about the attitude of the British people towards him and particularly towards his wife. I don’t know that he used the word ‘snooty,’ but whatever the Australian equivalent of that word was. I think he hinted that he would get the hell out of Britain because he didn’t like the attitude of the Poms [Australian slang term for the English].”

  News of the World deal: Shawcross, 103–17.

  Bert Hardy retained: Bert Hardy interview, October 4, 2007.

  “I don’t agree it’s sleazy for a minute…”: Leapman, Barefaced Cheek, 50.

  Murdoch and Frost interview: Frost, David Frost: An Autobiography.

  “We’ve had enough of your hospitality”: Shawcross, Rupert Murdoch, 117.

  Murdoch on Frost: “I swore I would never, ever have anything to do with Frost on any level in any way and I made it my, for at least twenty years I never spoke to him. He’d be all over me at parties, ‘Oh, Rupert…’ I’ve never had a one-on-one with him since and I’ve always been very cold to him, but I’ve been in situations where I’ve had to have social conversation. But I thought he was such an arrogant bastard, a bloody bugger…I feel like saying I’ll still get the bastard one day, but he’ll die before I get him.” October 10, 2007.