Murdoch's World: The Last of the Old Media Empires

by David Folkenflik

  “Mr. Bush was hitting the vital 50 [percent] mark in almost half the polls (unlike Mr. Obama) and had a lead over Mr. Kerry twice as large as the one Mr. Obama now holds over Mr. Romney,” Rove wrote. “So why was the 2004 race ‘a dead heat’ while many commentators today say Mr. Obama is the clear favorite? The reality is that 2012 is a horse race and will remain so. An incumbent below 50 percent is in grave danger. On Election Day he’ll usually receive less than his final poll number.”

  A chief force behind American Crossroads, a new form of political action committee that took money from anonymous donors, Rove helped raise hundreds of millions of dollars for Republican candidates across the country. But despite his strategic role in the race he remained a nearly constant presence as an analyst on Fox. The polls, he warned viewers, are “endowed by the media with a scientific precision they simply don’t have.” On October 9, David Paleologos, director of the Suffolk University Political Research Center, told Fox viewers that Romney was cresting. “In places like North Carolina, Virginia, and Florida we’ve already painted those red,” Paleologos told Bill O’Reilly. “We’re not polling any of those states again. We’re focusing on the remaining states.” (Obama would win Virginia and Florida.)

  On October 15 Dick Morris, the former adviser to Democratic president Bill Clinton and Republican Senate majority leader Trent Lott, weighed in. “If Romney simply continues to be the same man that he was two weeks ago . . . this momentum will continue. And I told you nine months ago, and I’ve said for the last nine months, and I say it again tonight, this election will be a landslide for Romney.”

  Other conservatives made the same case elsewhere. The New York Times poll aggregator, Nate Silver of the blog 538, came in for particular derision for promising near black-and-white certainty in a world defined by gray-hued margins of error. Silver’s twist was to predict not just the national vote and state-by-state breakdowns (with accompanying Electoral College scenarios) but also the degree of certainty any given candidate would prevail. Given Silver’s openly liberal outlook, the Times took a gamble that his methodology would hold up. If not, the newspaper would be criticized for having tilted its coverage.

  On November 1, Dick Morris offered the Fox audience a vision for what would happen. “It is not neck and neck, it’s a few laps. I think that Romney is going to win by 5 to 10 points in the popular vote. I think he’s going to win the electoral vote by something like 310, 300 to 220, 230.” Morris continued, “I think he’s going to carry—and this isn’t just [a] guess, it’s based on the latest polling—I think he’s going to carry New Hampshire, Ohio, Iowa, plus, of course, Florida, Colorado and Virginia. And then I think he’s got—he’s going to carry Pennsylvania. I think he’s got a good shot at carrying Wisconsin, an outside chance at Michigan and Minnesota.” (Not one of those predictions held just five days later.)

  On the day before the election Newt Gingrich offered his prediction on Fox News: “My personal guess is you’ll see a Romney landslide, 53 percent-plus in the electoral, in the popular vote, 300 electoral votes plus. And we may come very close to capturing control of the Senate in that context.”

  That same night Morris doubled down: “We’re going to win 325 electoral votes. We’re going to win the popular vote by 5 points or more. . . . There’s about a seven-point margin between the enthusiasm of Democrats and that of the Republicans.”

  Election Day would prove to be a shock for viewers who had relied primarily on Fox News for their political coverage.

  AILES HAD thought hard enough about his legacy that he had arranged to write a memoir with Jim Pinkerton, the former White House aide under presidents Ronald Reagan and George H.W. Bush who had become a columnist and Fox News media critic. But he never quite found the time. Gabriel Sherman, a reporter for New York magazine, wrote a cover story on Ailes and signed a book contract to write an unauthorized biography. He interviewed Fox journalists, followed Ailes to public events around the country, and even wrote about the Putnam County, New York, newspaper that Ailes owns and operates with his wife, Elizabeth Tilson Ailes.

  Andrea Tantaros, co-host of Fox’s The Five, called Sherman a “stalker,” a “harasser,” and a “Soros puppet”—that last epithet a reference to his affiliation with the New America Foundation, which has received donations from George Soros and his son Jonathan. (As it happens, Pinkerton had also been a fellow at the New America Foundation.) To handle the competing narrative of his life, Ailes instead granted generous access to Zev Chafets, a magazine writer and former New York Daily News columnist who had written a favorable biography of Rush Limbaugh. Chafets said he had adopted Fox’s mantra as his own: “I report. You decide.” His authorized biography, which Ailes did not review before publication, came out in March 2013.

  Fox commentators such as Patrick Caddell blasted Sherman; a writer for Breitbart News questioned his mental well-being; while another media blogger asked Sherman to comment on whether he took prescription pills. An outfit in Scottsdale, Arizona, with no relationship to Sherman or his publisher bought a bunch of domain addresses that incorporated the author’s name and the planned title of his book. It began to look to some Fox watchers like a campaign.

  What Ailes really wanted for his final hurrah at Fox was less a memoir than an equity stake. He wanted more than just additional shares of News Corp stock, and he wanted his payday to dwarf what other major media executives received. One Ailes associate said the Fox News chief was obsessed with the pay of David Zaslav of Discovery Communications. According to Discovery’s 2012 filings with federal regulators, Zaslav was paid $3 million in salary and another $4.84 million as a cash bonus (of a possible $5 million maximum bonus). And he was granted “long-term incentive compensation” in stock worth $23.9 million in fair market value. The tidy package amounted to more than $36 million for the year. Much to Ailes’s chagrin, Rupert Murdoch wasn’t about to pay him that much.

  That chafed Ailes. So in early 2012 he talked to Newsmax CEO Christopher Ruddy, whose conservative news outfit had established a highly profitable network of newsletters and a magazine from its opinion and news website. Ruddy had built up offices in West Palm Beach, Florida, as well as in midtown Manhattan, just seven blocks from News Corp. He had hopes of creating a television channel for the brand too. Come on board, Ruddy told Ailes. Ruddy promised him a $25 million a year salary and equity, holding out the promise of a payday worth hundreds of millions.

  Ailes was tempted. But he was aging and had health issues—not just his weight and hemophilia but arthritis and others too. A start-up might be exciting but also exhausting. And he had little inclination to relinquish control at Fox. He had never groomed a successor who could guide Fox after he left or a new generation of prime-time stars either, with the possible exception of Megyn Kelly. The network’s big names were stable but aging. Over the years, some executives had internally speculated the next stage of Fox’s development might demand a manager rather than an all-consuming visionary like Ailes. It is a mark of his force of personality that people at Fox typically wondered whom Ailes would recommend to succeed him (if he had reached such a conclusion, he did not share it with others), rather than whom the Murdochs would want.

  In late October, Fox announced that Ailes had signed a four-year contract extension that would take him through June 2017, past his seventy-seventh birthday. The network and News Corp leaked that he had received a big raise.

  ON ELECTION night Fox analysts and reporters rightly noted that 2012 had not inspired the kind of captivating campaign that Obama ginned up for victory in 2008. At the start of the night, the Fox News chairman warned commentators participating in his channel’s election coverage: “If things don’t go your way tonight, don’t go out there looking like someone ran over your dog.” Yet the coverage on Fox proved largely dour and depressive. “President Obama will win because he ran a good campaign,” political anchor Bret Baier said early in the evening. “He will not win because of the state of the economy.”

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p; Even the Democratic and liberal analysts on Fox were largely reduced to talking about electoral tactics and the unresolved grid-lock ahead. Viewers would find it hard to believe that the final tally showed Obama had won by nearly four percentage points in the popular vote. Several pundits, including Bill O’Reilly and Stephen Hayes, circled back to Superstorm Sandy as a stroke of good fortune for the incumbent. “While Governor Romney was talking about bipartisanship,” Brit Hume said, “the president gave an image to Americans on television of him practicing it. That’s pretty strong medicine.”

  O’Reilly said Republicans had failed to grapple with the changing demographic face of the American electorate. But there was a thread of melancholy woven into his analysis. The day of the traditional white American was done, he said. The US was becoming more like Western Europe, he went on, as Americans wanted others to bear their every burden—turning President John F. Kennedy’s famed admonition on its head. O’Reilly ascribed Obama’s victory to the desire for handouts, especially among people of color, though O’Reilly very explicitly said such indolence cut across racial lines. (In so doing, intentionally or not, he echoed a Murdoch tweet of November 3: “Just look at European welfare state and broken countries. Some want US to follow, others not. Why can’t we debate civilly?”)

  Fox analyst and host Dana Perino, the former George W. Bush press secretary, noted that women favored Obama heavily, suggesting that Democrats used abortion to scare them into entering voting booths. Fox’s coverage revealed little about the forces behind the election but a great deal about the coming clash within the Republican Party: whether Mitt Romney had been too moderate to win or had failed to connect with the minorities making up an increasing number of US voters.

  Once the Fox News Decision Desk put Ohio in Obama’s win column, giving the White House to the president, Fox News Sunday anchor Chris Wallace announced that officials with the Romney campaign had called to argue the margin was too small to make such a projection. Correspondents on other networks reported similar complaints a bit later. Karl Rove took up the Romney cause on the air and vigorously attacked his own network’s analysis—to the point where anchor Megyn Kelly called out, “That was awkward!” Late in the evening, Rove returned to the air and contended the margin of Obama’s lead was small and a significant fraction of ballots cast had yet to be tallied.

  Kelly asked Rove, “Is this just math that you do as a Republican to make yourself feel better, or is this real?” Ailes later said he had called Michael Clemente, a senior Fox News executive, and ordered the cameras be kept on Rove. The confrontation was great television. Kelly ultimately strode down the hallways of Fox News to the number-crunchers running the desk to have them explain their projections. She owned the studio that night, shushing Wallace and even darting over to brush some lint off Joe Trippi’s shoulders. Yet she couldn’t convince Rove, who reviewed counties he thought were still in play, at one point adding, “and then there are cats and dogs elsewhere that add up to another 120,000 votes.” Rove learned the lessons of the 2000 elections all too well.

  By the end, having lost the argument and the night, Rove declared that President Obama’s victory carried little weight. He had “blown the last two years—he’s played small ball,” Rove said around 12:40 AM on Wednesday. “This does not bode well for the future. . . . He may have won the battle but lost the war.” Dick Morris, who had confidently predicted a Romney landslide, did not appear on air.

  Seconds shy of 2:00 AM Eastern Time, Kelly and Baier found a glimmer of grace to offer the reelected president’s victory speech. And then Baier noted: “Hard to believe, but Iowa Caucus is 1,154 days away.”

  AS HE watched returns on election night, Ailes told Chafets that illegal immigrants can no longer be treated with hostility. They cannot be called illegal aliens any more. The following morning, he lectured his senior staff about it on a conference call. Within twenty-four hours, Sean Hannity announced to viewers that his thinking had “evolved” on immigration reform. Things had to change.

  The assault against what became known as the conservative media cocoon began swiftly. “Unreal,” George W. Bush’s former chief strategist, Matthew Dowd, tweeted later that Wednesday. “Nearly every piece of data for last 3 weeks pointed to Romney loss. Ray Charles could have seen it coming.” Hume had offered the closest his network’s viewers would receive to a fair-minded note of warning from a non-Democrat. “The state polls portray Obama ahead. And there are a lot of them.” But even he had called the race a tie a few weeks ahead of the election.

  Conservatives had taken it on faith that Democratic voter turnout would replicate the deflated levels of 2010, and not the much higher levels of 2008. And Republican professionals had trashed polling altogether. One aspiring conservative Virginia political consultant set up a blog promising to “unskew” the polls—readjusting them to what he thought they should look like. The polls were the newest front in the all-out war on journalistic bias.

  Prominent Republicans angled for cabinet posts just days ahead of the election, convinced the Republican ticket would win. Romney did not draft a concession speech, which is customary, because he was so confident about the outcome. And then the votes started coming in.

  “Because I had a rooting interest in the other side, that view was strengthened and amplified by what I wanted to happen, which I freely confess,” said New York Post columnist John Podhoretz, also the editor of conservative Commentary magazine and a cultural critic for the conservative Weekly Standard. “People don’t ordinarily cast a skeptical eye on data and information that supports their opinions. They’re happy to take it.”

  “The conservative followership has been fleeced, exploited and lied to by the conservative entertainment complex,” former George W. Bush speechwriter David Frum said on MSNBC’s Morning Joe.

  Dick Morris explained himself. “There was a period of time,” he told Sean Hannity, “when the Romney campaign was falling apart. People were not optimistic; nobody thought there was a chance of victory. And I felt it was my duty at that point to go out and say what I said.”

  Morris said he believed what he told viewers, but he betrayed his true intent: not as a network consultant to inform the audience but to rally the Romney campaign. (Fox blurred his motivations further by typically presenting him as a former Clinton adviser—though he had cast his lot with Republicans for more than a decade.) Ailes fired Morris from Fox after the election and kept Rove off the air for a few days. Sarah Palin’s contract was allowed to lapse, unmourned in Fox’s corporate suites. But the people who replaced them were just as partisan.

  Jon Huntsman Sr., a chemical company billionaire and father of the former Utah governor and failed Republican presidential candidate, took Fox to task during an interview on the channel itself. “I just think the Republican Party was misled by Dick Morris and Karl Rove and these folks,” Huntsman told Fox’s Neil Cavuto. “I am an avid Fox News fan, but, you know, Intrade and . . . [the New York Times’s] Nate Silver—and all these polling services had it right, except Fox. And they lulled us to sleep.”

  Huntsman said he wasn’t criticizing the network—in part because he viewed it as “entertainment.”

  Huntsman’s categorization of Fox—as entertainment—was being adopted by its corporate owners too.

  21

  GOODCO VERSUS SHITCO

  BY FEBRUARY 2012 NEWS INTERNATIONAL’S containment strategy had crumbled. The effort to contain scrutiny to a single reporter and investigator had failed. So had attempts to limit attention to a single newspaper and to protect Rebekah Brooks. Anyone without the last name Murdoch was expendable.

  In the UK, the plan was to allow the Sun to thrive, standing apart from its tarnished sister tabloid. By mid-February 2012, however, police had arrested nine Sun reporters and editors on suspicion of having bribed a breathtaking array of government and law enforcement officials. Even worse, from the standpoint of many of Murdoch’s British journalists, fellow News Corp employees working under Joel
Klein and Will Lewis had volunteered the evidence allegedly implicating them. Over the next year, the company sought to blunt the search for more damaging information. In late January 2012, Dinah Rose, a British lawyer for News International, conceded the company’s responsibilty but said there was nothing more to find. “We accept we are the villains,” she told the judge as the company settled the cases of three dozen hacking victims. “We have the horns and the tails.” But, she attested, the company’s compliance was complete. There was no need to chase phantoms.

  The High Court judge, Geoffrey Vos, expressed little confidence in that profession of good faith by News International and its executives. The company had deleted millions of emails, removed key evidence from servers, even dismantled its own reporters’ computers. “They are to be treated as deliberate destroyers of evidence,” Vos said in court. “I have been shown a number of emails which are confidential. Suffice it to say they show a rather startling approach.” In court, News International admitted that senior executives and directors of its tabloid unit “knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence.”

  The collaboration with authorities came at a cost. Inside News International’s newsrooms, Will Lewis was quickly losing whatever respect he had built up in his years as an editor at various British papers. His was a grim task, to be sure, but one he embraced. Boyish and canny, Lewis had been a respected journalist and a brilliant corporate player at the Financial Times and, until a falling out, inside the Telegraph newspapers as well while editor in chief. Widespread suspicions emerged that he had orchestrated the leak of the Telegraph’s damning tape of cabinet minister Vince Cable trashing Murdoch. The tapes were first publicly released by Lewis’s friend, Robert Peston of the BBC, rather than by the Telegraph itself, a blot on the paper’s reporting. When directly asked at the Leveson Inquiry, Lewis declined to answer whether had played a role in the release of Cable’s remarks.