Murdoch's World

by David Folkenflik

  For Rupert Murdoch, Australia, or at least the idea of Australia, serves as an analogous source of strength. In New York, London, and Los Angeles, Murdoch entrusted outposts to people who served him in his native land. Robert Thomson, born in a small town several hours north of Melbourne, led the Times of London, ran the Wall Street Journal and Dow Jones, and became the first CEO of the new News Corp publishing company when it split off on its own in June 2013. Col Allan, from the tiny agrarian town of Dubbo far outside Sydney, has been entrenched at the heart of the world’s media capital for more than a decade as the editor of the New York Post. The British-born Les Hinton moved to Australia as a teenager and got his start as a gofer at Murdoch’s Adelaide News in the late 1950s. He became CEO over Murdoch’s British operations and then publisher of the Wall Street Journal. David Hill, an Aussie who ran sports for Murdoch in the United Kingdom and Australia, reinvented Fox Sports in the United States when it successfully bid for rights to broadcast NFL games in the early 1990s and returned to lead a new national Fox Sports network in 2013.

  Whatever their relative skills, each man—and the overwhelming majority of senior Murdoch executives are men—also serves as a talisman from home. And the history of News Ltd (as Murdoch’s holdings were known there) in Australia is instructive about the company’s instincts in situations when it becomes dominant and its reflexes when challenged.

  “The story of our company is the stuff of legend: from a small newspaper in Adelaide to a global corporation based in New York, with a market capitalization of about $44 billion,” Murdoch told shareholders in October 2011.

  Australians demur. “Adelaide is irrelevant,” said Graeme Samuel, the former chairman of Australian Competition and Consumer Commission, the powerful agency that regulates antitrust and media issues. I met Samuel in Murdoch’s true hometown of Melbourne, a city famed for hosting the Australian Open tennis tournament, trolley cars, and street buskers playing the didgeridoo, an Aboriginal instrument.

  Melbourne is Australia’s second-largest city, a melting pot on the country’s southeastern coast. Samuel, currently a corporate investment consultant whose office enjoys a commanding view from thirty floors up, pointed out the many beneficiaries of the Murdochs’ enormous enterprises along the sinuous Yarra River.

  An infant born in Melbourne could be delivered at the Royal Children’s Hospital, underwritten in part by the largesse of Rupert’s mother, Dame Elisabeth Murdoch; the birth announcement, of course, could appear in his tabloid Herald Sun, whose predecessor papers were run by Murdoch’s father, Sir Keith. The child could learn to read from books published by HarperCollins Australia, another News Corp offshoot; attend music and art classes at institutions subsidized by the family foundation; enroll at a high school named for Dame Elisabeth; amble with dates at the botanical gardens; attend shows at the major theater downtown; have a marriage notice published in the Herald Sun; work for one of the foundations sponsored by various Murdochs; buy tickets to movies from Fox Studios; down a pint at a pub while watching Australian rules football on Sky Sports; vote for politicians cast in favorable light by the company’s papers; receive care at various hospitals underwritten by the family’s contributions; and be commemorated at death, once more, in the pages of the Herald Sun.

  Murdoch’s grandfather Patrick was a Scottish clergyman who became influential after being posted to Melbourne. Rupert’s father, Keith Arthur Murdoch, lived in the quarters at the back of the red brick church as a child.

  Stephen Mayne, formerly an editor at Murdoch’s two biggest Australian tabloids, the Melbourne Herald Sun and the Sydney Daily Telegraph, gave me an extended tour of Melbourne Murdochiana. He took me to Trinity Presbyterian Church on the corner of Riversdale Road and Waterloo Street in Toorak, a prosperous suburb a few miles southeast of Melbourne. “There was discussion at the time that [Keith] may pursue a religious career as well,” Mayne said, “and he said no—journalism was his thing.” As a teen, Keith Murdoch obtained a cadetship, or apprentice reporter’s job, writing about suburban news for the Age, a prestigious Melbourne newspaper.

  As a reporter during World War I, Keith Murdoch witnessed the doomed Allied assaults on Gallipoli and wrote an impassioned letter to the Australian prime minister denouncing the willingness of British commanders to endanger Australian soldiers. Decades later, Rupert Murdoch acknowledged to his biographer William Shawcross that much of what his father had written didn’t stand up to scrutiny. Despite what the letter said about British commanders recklessly costing the lives of Aussies and Kiwis, British troops had also been in peril.

  No matter. The letter made Keith Murdoch a hero to Australians. He had stood up to power. He rose to be top editor of the Melbourne Herald and a top executive of his employer’s growing corporation. To make the profile complete, he needed only to establish a family. He had seen a picture of Elisabeth Greene in a magazine and, after inquiring, arranged to meet her at a Red Cross benefit dance. A swift courtship led to a quick wedding. Keith Murdoch was in his forties and much older than his wife—by twenty-four years. The knighted Sir Keith prospered and brought up their children in great comfort. The Murdochs lived in a mansion in Toorak and bought a cottage outside the city. They named the accompanying estate Cruden Farm, an echo of Patrick Murdoch’s Scotland.

  Rupert had a tough time at boarding school and never excelled at sports. He took an interest in the newspaper business, apprenticing in London for some of Keith Murdoch’s friends there. The son adopted radical leftist politics at Oxford University, giving pride of place to a bust of Vladimir Lenin. On campus, he won election as publicity manager of the Cherwell, an independent student paper. Off campus, Murdoch absorbed the way the owners conducted themselves. London was already home to long-form newspapers filled with sober accounts and tabloids offering splashy and salacious headlines. Press barons could indeed become peers of the realm: Lord Northcliffe, Lord Rothermere, and Lord Beaverbrook actively and even bruisingly participated in the nation’s political life and expected their beliefs to be reflected in their papers.

  Sir Keith died in 1952, and twenty-one-year-old Rupert rushed home. The Toorak property was sold to pay off Keith Murdoch’s outstanding debts and the taxes due on his estate. True, his mother, Dame Elisabeth, owned Cruden Farm outright. But the son was angered that his father was not able to bequeath greater media holdings. Keith Murdoch had obtained a personal stake in papers owned by the Herald & Weekly Times Co. in Brisbane and several other properties, including the Adelaide News. Yet just before Keith died, former colleagues had reversed several of his maneuvers, depleting his fortune.

  Rupert Murdoch went back to Oxford that year to finish his degree in philosophy, politics, and economics at Worcester College. Yet memory of that grievance helped to spur the son’s return home and his ambition to expand his holdings beyond Adelaide, a city in which he had no emotional investment beyond newspapers, beyond news. He acquired major newspapers in every Australian state, often leveraging his properties to finance debts for succeeding acquisitions. Murdoch bought TV stations, acquired the rights to broadcast shows from the American ABC-TV network, and established the country’s first truly national daily, the Australian.

  These extraordinary moves, which often anticipated Australians’ appetite for news and entertainment, seemed self-evident to Murdoch. “I don’t know of any son of any prominent media family who hasn’t wanted to follow in the footsteps of his forbears,” Murdoch said in 2001. “It’s just too good a life.” And he hoped to create something for one of his own children. He married young and had a daughter, Prudence, by his first wife, a former airline attendant named Patricia Booker. They divorced in 1967, the same year he married an aspiring young reporter named Anna Torv, with whom Rupert had Elisabeth, Lachlan, and James.

  It took three-and-a-half decades for Murdoch to acquire the company that his father had once run. Stephen Mayne, my guide around Melbourne, had been a successful business editor there at Murdoch’s Herald Sun and held the same job
at its sister paper in Sydney, the tabloid Daily Telegraph, by far the country’s largest-circulation paper. He was later promoted to be chief of staff for the Telegraph. By Mayne’s account, he wasn’t up to the task of leading the newsroom in Sydney, a sprawling center of power, finance, and pop culture in which he had few nonbusiness contacts and no real roots.

  Over time, Mayne became a leading Australian critic of Murdoch and News Corp. He sees present-day parallels between Rupert’s arrangements and Sir Keith’s efforts to win ownership of several titles while serving as a top executive at the publicly traded company he ran. “We’ve seen similar questions asked around the way Rupert Murdoch has run News Corp with his own family interests first versus the public shareholder interest,” Mayne said: the sons installed as top executives; the daughter’s film production company acquired for more than $670 billion.

  In public, Murdoch defined a clear barometer by which he would judge himself: “The thrill of success is in how many people you get to watch your television programs—how many people you get to buy your newspapers. And if you’re doing that well, the rest looks after itself,” he once said. Dame Elisabeth subtly rebuked her son’s view. “It’s very satisfactory if you do very well and are so-called—this dreadful word—‘rich.’” She would not allow Rupert to set the terms by which he could measure himself. Philanthropy was her pursuit but not in any major way her son’s.

  Politicians from both major Australian parties have granted Murdoch’s company key concessions. In 1985 News Corp was granted waterfront property on Sydney Showground for its movie studio in exchange for a paltry figure by the federal government and the state of New South Wales. A state auditor later established that the deal may have benefited News Corp by more than $100 million. In 1995 News Ltd went into business with the state communications corporation Telstra and another private firm to create FoxTel, the country’s leading pay-TV service. News Corp held a 25 percent stake but had full rights to control the management and direction of the company. Such deals showed how the corporation often operated.

  Tony Blair flew to Hayman Island, on the Great Barrier Reef, to address News Corp’s editors and directors in July 1995 after becoming leader of the British Labour Party. Murdoch took the visit as a signal of seriousness, which it was. Australian prime minister Paul Keating gave Blair some advice: “He’s a big, bad bastard, and the only way you can deal with him is to make sure he thinks you can be a big, bad bastard too. You can do deals with him without ever saying a deal is done, but the only thing he cares about is his business. And the only language he respects is strength.”

  Murdoch started acquiring British media outlets in the late 1960s and then expanded into the US, ultimately becoming an American citizen to satisfy requirements of US television regulators. By 2004, he pulled News Corp from Australian exchanges and listed it in New York. By then the transformation from regional media executive to worldwide powerhouse was complete. “I don’t want to pretend this is a guy who went from rags to riches, but he was gifted one newspaper in Adelaide, which is one of the smallest cities in this country,” said Andrew Jaspan, former editor of Fairfax Media’s Melbourne Age, who previously worked in senior positions for two Murdoch papers in the UK. “So he’s perceived as a real success story—a guy who started with one paper and built a global empire. From that perspective, he’s seen as a bit of a hero.”

  News Corp does not always achieve what it wants, even in Australia. Its cable TV division failed to win exclusive rights to broadcast rugby and Australian football. But it has always been prominent in the mix of broadcasters. And journalists say his national newspaper the Australian exacts a toll on those who oppose Murdoch’s interests.

  In summer 2011, when scandal overwhelmed its British sister company, executives for News Ltd in Australia scrambled to contain the damage. On July 14, John Hartigan, then CEO and chairman of News Ltd, was asked by the Australian Broadcasting Corp’s Leigh Sales if Murdoch’s newspapers had bullied politicians there, as she said they had in Britain.

  Hartigan said that his journalists hold politicians accountable. “I don’t believe that we ever overstep,” Hartigan replied. “Yes, it’s a love-hate relationship, and sometimes it’s loving, and sometimes it’s very hateful, but I don’t think, generally speaking, that we exceed our authority.”

  Though Australians often feel slighted by his long absences, Murdoch still casts a long shadow there, as he proved when he informed Hartigan it was time to step down a few months later. The unit’s print revenues were sagging. The Labor government had launched formal reviews of media behavior and ownership. Rupert Murdoch reclaimed the title of chairman for himself. The king had returned.

  AUSTRALIA SERVES as an important test case of what happens when a strong media figure becomes an inescapable one. Step up to any newsstand in Australia, as I did in Melbourne’s central business district, and ask about Rupert Murdoch, and you’ll get an appraisal like this one from Tom Baxter, an officer with a local disability foundation: “Long time in newspapers, ruthless; dedicated to [his] craft; a global citizen.”

  In the beachside community of Albert Park, feelings toward him were equally complicated. At a bookstore I ducked into, a prominent display featured the best-selling memoir of former prime minister John Howard, a favorite Murdoch politician. I bought a popular children’s book for my daughter Viola, called Josephine Wants to Dance. Josephine is a young kangaroo who aspires to be a ballerina. The Murdoch imprint HarperCollins Australia published both books.

  There is admiration for the global success of a local boy, but cynicism too. “In Australia, there are a lot of cities that only have Murdoch press as their newspaper,” said bookseller Kate MacFadyen, “so it just feels like his organization dominates the media in this country.”

  Until Dame Elisabeth’s death in late 2012, Murdoch typically visited her once a year at the estate. Graeme Samuel said Dame Elisabeth’s philanthropy bound the city of Melbourne to the family. “For Rupert, I think it’s a combination of goodwill,” Samuel said, with “fear that’s being created by the sheer omnipresence of the Murdoch family and the Murdoch press.”

  News Corp owns the dominant papers in nearly all the country’s major cities. The Australian, the only national general interest paper, has a modest circulation of approximately 130,000 but shapes elite opinion; it’s the paper that gets chewed over by talk radio, television programs, and blogs. In addition, News Ltd owns popular news websites and the controlling stake in FoxTel, the nation’s largest cable TV provider, in Fox Sports, and the cable Sky News Australia service. Murdoch’s older son, Lachlan Murdoch, makes his home in Sydney and is a key investor and chairman of the ostensibly rival broadcast Network Ten while remaining a corporate director of News Corp in New York.

  Between six and seven of every ten copies of national and metro papers sold in Australia are owned by News Ltd, according to government and trade figures. The papers are not monolithic in approach. But they tend to champion a strong military stance, a smaller government with fewer regulatory powers, and restrictive policies toward immigrants. Murdoch’s tabloids exude a more populist sheen than the Australian.

  Paul Barry, who has written periodically for Murdoch’s Daily Telegraph in Sydney, pointed out that the livelihoods of an overwhelming number of Australian journalists depend on the whim of a single media conglomerate and the sensibility of a single mogul. “Ultimately, he’s the bloke they have to please,” Barry said. “And so, while they may not actually get an order coming down saying, ‘You will run this headline, you will do this story, you will take this point of view,’ they know what sort of things are going to play well.”

  The fact of that concentration is a notable element of two separate recent government reviews of the media in Australia. “It’s a pretty clear stranglehold on the flow of information, which in itself might not be such a bad thing if you weren’t open to claims that certain media organizations represent certain political interests,” said Monica Attard, former foreig
n correspondent and media critic for the ABC. “I think it’s very, very difficult to overcome those barriers.”

  Rupert Murdoch addressed the nature of media ownership decades ago as he sought his first foothold in the UK by taking over the tabloid News of the World. “I think the important thing is that there be plenty of newspapers, with plenty of different people controlling them, so that there are a variety of viewpoints, so there is a choice for the public,” he reassured the British public in 1968. “This is the freedom of the press that is needed.”

  Murdoch’s Australian editors insist that the country does enjoy a diversity of views. They point to the nation’s public broadcaster, the ABC, and the rival Fairfax Media’s holdings, including worldly daily papers in Sydney and Melbourne, as well as the national business daily Australian Financial Review.

  The former media and antitrust regulator Graeme Samuel perceives real danger in the state trying to interfere with ownership: “News Ltd is powerful, but is it vulnerable? Yes, I think it is,” Samuel said. “Like any traditional media organization, they’re vulnerable to the whims and fancies of the reader.” Samuel noted that paid newspaper circulation is declining in Australia, as it is elsewhere in the industrialized world. People read blogs and foreign newspapers online, or tune in to talk radio. Ahead, Samuel sees the promise of Internet TV. He dismisses the idea that a single media company can control anything in Australia, even if its myriad publications generally share an outlook.

  Still, Australia is unlike other western countries in the extent to which one private company holds such a dominant position. “It’s bad for a democracy when 70 percent of the newspapers in this country are pushing one line and pushing it so hard, whether it is right or whether it’s wrong, frankly,” the media critic Paul Barry said.