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

by David Folkenflik

  Murdoch’s patronage always came at a price. News Corp was a publicly traded company in name only. Whatever title anyone else held, Murdoch was the proprietor. Murdoch’s Manhattan office is on the eighth floor of News Corp’s headquarters. His office is on the right. On the left, a visitor will see a bank of desks filled with Murdoch’s assistants. On the wall nearby is an oil painting on a bronze background of a newspaper folded in half. The paper’s flag, the insignia on top of the front page, bears the legend The Herald. Editors who work with Murdoch and have a sense of history think that has to be an allusion to his father’s paper, the Melbourne Herald, which Keith Murdoch was unable to retain in the weeks leading up to his death. Rupert had acquired it and more than 150 newspapers besides. His mother had seen all that over the decades and wondered why he needed more. She saw a nation of citizens. He saw markets populated by consumers. Rupert Murdoch loved and understood his mother. But they engaged with the world around them very differently. He wanted to explode entrenched models, harness fresh technologies to draw in new customers, and then build some more.

  Murdoch was accompanied to the memorial service by his wife, Wendi Deng, and their two young daughters. Lachlan was there, with his wife, the actress and model Sarah Murdoch. James and Elisabeth did not attend.

  Rupert still cared about the banished Rebekah Brooks. Her scandals became his disgrace. Her tenure was like the economy in the first decade of the 2000s: disaster masquerading as runaway success. Yet he had ensured a generous payout: a severance package worth $17.6 million. In April 2013, Brooks was spotted in Australia yachting and relaxing with the Murdochs. That same month, police in London announced they had discovered hundreds more cases of phone hacking than had been suspected previously. Investigators had initially looked at the now-closed tabloid’s news desk for the same reason that Willie Sutton was said to have robbed banks: that’s where the money was. Reviewing the news desk records, police found fastidiously ordered accounting. The new charges involved the features desk, which police claimed had engaged in more subterfuge to cloak the purpose of the expenditures. That had taken more time for police to penetrate.

  In her final years, Dame Elisabeth watched as her son and grandson allowed an apparently criminal culture to take root at the family’s two most profitable newspapers. In spring 2013, the company agreed to pay $135 million to settle the grievances of a dissident group of shareholders, led by a union-controlled bank and other institutional investors. The settlement was a small price to pay to make the lawsuit go away.

  Through all this the market cap of the company—its value as determined by the worth of all its shares—had risen by 50 percent since the announcement of the split, to the impressive peak of $73 billion. The value of Murdoch’s shares in the company had climbed to about $10 billion.

  People invariably compared Murdoch to William Randolph Hearst, the American media baron of an earlier age who inspired the great movie Citizen Kane. That seems too limited a comparison. Perhaps he was more like the nation’s early oil barons who controlled new terrain and pock-marked the countryside in drilling—a man unlikely to ask for permission or forgiveness, who provided millions of Americans with a product they came to view as indispensable.

  Murdoch similarly could not have accumulated his fortunes without our help. We are all, as consumers of media, involved and even responsible for the creation of Murdoch’s World—those of us who pick up his tabloids at the newsstand, enjoy the cable news wars, subscribe to his prestigious papers, watch a ballgame on TV, buy tickets to a movie, even those of us who are News Corp investors through pension funds or mutual funds. We make up the market that he sought to create and feed. He played us, as much as he played everyone else. And we have rewarded him handsomely for it.

  Speaking to investors in New York City, Rupert Murdoch cast the corporate split in personal terms. “I have been given an extraordinary opportunity most people never get in their lifetime: the chance to do it all over again.” He would soon dispatch the Post’s Col Allan back to Sydney and swapped editors at the Sun, too. But his declaration carried more than one meaning. Two weeks later, Murdoch filed for divorce from his third wife, Wendi Deng Murdoch.

  This union, his lawyers wrote carefully, had “broken down irretrievably for a period of more than six months.” As the years progressed, Wendi had socialized separately from Rupert, enjoying a California lifestyle, circulating with Hollywood, Australian, and Chinese movie stars, and developing some outside ventures. Rumors that she had been romantically involved with several prominent entrepreneurs and other figures had reached Rupert’s ears. As long as she didn’t embarrass him, he did not care to learn more, one former aide said. In this case, an aide to Tony Blair even felt compelled to deny to the Hollywood Reporter that the former prime minister had ever had an affair with Deng Murdoch.

  Yet the move in June 2013 to obtain a formal divorce marked yet another wrecked personal relationship, the latest in the line. His mother gone, his children alienated and angry, Murdoch turned his attention back to his business—and not his entire business, but particularly his newspapers. Though he was formally the CEO as well as chairman of the new 21st Century Fox, and only chairman of the new News Corp, Chase Carey would run the Fox entertainment and television company capably. The decades-old names of News International and News Limited vanished, replaced, respectively, by the brands News UK and News Corp Australia. Rupert would once more lead a company with the newspapers at its core taking up, with Robert Thomson as his lieutenant, the seemingly impossible challenge of how to make newspapers profitable. He wanted to prove the naysayers wrong.

  Murdoch has never convincingly shown any capacity for self-reflection. He reaches a fork in the road, chooses a path, and sets off. Another person in his position who absorbed the revelations about the way the company operated might have decided to step down to give the company a fresh start. Someone with a different psychological makeup might have wondered what he had done to create a culture that had so completely severed any connection the people running his British tabloids had with the people they covered and served. But if Murdoch ever had such doubts, he showed no sign of them.

  In his eighty-second year of life, disgraced and denounced as “unfit” to lead a major media company by the British Parliament, isolated from his family and challenged by financial forces besetting the entire newspaper business, Murdoch was undaunted. His media enterprise counted many millions as customers and yet had an audience of one.

  His father, Keith Murdoch, the absent role model whose memory he always sought to uphold, had made his name by writing about an ill-advised attack in a thankless cause. A century later, Keith Rupert Murdoch was preparing for combat on forbidding terrain, far from loved ones, in the name of his own fading empire, in his case a commonwealth of newspapers.

  ACKNOWLEDGMENTS

  I HAVE been blessed with friends, colleagues, and family who have squandered no end of time to keep me on course in the researching and writing of this book.

  The idea of writing one originated with Jeremy Schaap, who argued that I should translate my years of reporting on Fox News and the cable news industry into a more expansive treatment. In early July 2011, I watched a remarkable press conference taking place in Kabul, Afghanistan, where the British prime minister was forced to answer questions about whether the Murdochs were fit owners of the largest pay television provider in the UK. Murdoch’s World stems from the stories that ensued and is also based on additional reporting specifically for this project, which broadened the scope of my interest.

  Many current and former executives at News Corp’s headquarters as well as officials and journalists at its various constituent news organizations sat patiently for interviews, answered late night queries, and offered key guidance. As the Murdoch family and News Corp formally discouraged them from participating, I cannot thank most of them by name, but I am appreciative nonetheless.

  Others who spoke on the record to me provided information and insight that w
ere crucial to various elements of my reporting and this book, and I am grateful to them all. Among the many are Tim Arango, Paul Barry, Nick Boles, Rebecca Blumenstein, Chris Bryant, Ken Chandler, Zev Chafets, Neil Chenoweth, James Chessell, John Coffee, Damien Collins, Charles Elson, Paul Farrelly, David Gordon, Roy Greenslade, Brit Hume, Andrew Jaspan, Simon Jenkins, Ian Johnson, Simon Kelner, Thomas Keneally, Bill Keller, Mark Lewis, Kelvin MacKenzie, Robert Manne, Stephen Mayne, Paul McMullan, Louise Mensch, Anne Schroeder Mullins, Andrew Neil, Freya Petersen, Alan Rusbridger, Graeme Samuel, Vivian Schiller, Mark Stephens, Tom Watson, Ellen Weiss, Juan Williams, and Michael Wolff. Thanks also to Geraldo Rivera, a daily inspiration to journalists everywhere.

  My NPR colleague in London, Phil Reeves, was my partner on the hacking scandal and a key guide to the ways of Fleet Street, back-stopped by our producer Stewart Willy. The support of NPR has been outstanding, especially from my editors Laura Bertran and Stu Seidel, even as we have ventured into sensitive areas. NPR’s Margaret Low Smith, Kinsey Wilson, and Gary Knell have also been particularly supportive. The occasional frantic query to NPR’s resourceful reference librarians always yielded a swift, patient, and comprehensive answer.

  Murdoch’s World would not have come together had it not been for my agent, Robert Guinsler of Sterling Lord Literistic, and the team at PublicAffairs. My editor, Clive Priddle, tamed an enormously complicated tale spanning four continents and more than five decades with a literate touch and a welcome sense of irreverence. Melissa Raymond kept the process moving apace. Emily Lavelle planned the book’s launch with the precision of NASA. The encouragement of Peter Osnos throughout meant a great deal to me.

  Chuck Salter, Isaac Kramnick, Kelly McBride, Mike Pesca, Lisa Pollak, Robert Smith, Robert Tashjian, John Hassel, and Sam Zarifi served as vital sounding boards. Max Folkenflik and Margaret Mc-Gerity kindly opened their law offices to me, enabling me to complete my writing away from home and newsroom. Glenn Altschuler and Michael Ollove gave much-needed scrutiny to various drafts of my manuscript. John McIntyre provided a scrupulous copyedit.

  My parents, Robert and Vivian Folkenflik, the most dedicated educators and most intelligent writers I have ever met, made painstaking suggestions which vastly improved this book. And it would not have been possible to complete the book without the love and support of my wife, Jesse, and the joy of our daughter, Viola. I may have been writing Murdoch’s World, but I live wholeheartedly in theirs.

  David Folkenflik

  Laguna Beach, California

  July 30, 2013

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  NOTES

  Chapter 1

  Page 1 The man at the center of the maelstrom: The account of the meeting between Rupert Murdoch and the Dowler family in this chapter is based in significant part on my interviews with two sources who had a contemporaneous knowledge of the events that occurred, plus ensuing public statements and testimony.

  Page 1 He was tanned and reasonably fit: From photographs and video taken that day. For example, from the Independent: www.independent.co.uk/news/uk/crime/rupert-murdoch-pays-dowlers-3m-for-phone-hacking-2357471.html.

  Page 1 the luxury hotel One Aldwych: Author’s visit to hotel in November 2011.

  Page 2 His company served millions of readers and viewers on five continents: List of News Corp assets contained in company’s 2011 10K Annual Report: http://investor.newscorp.com/secfiling.cfm?filingID=1193125–11–221637.

  Page 2 an imposing presence, and an impassive expression: July 15, 2011. Video footage of Dowler family lawyer Mark Lewis making a press statement after meeting with Murdoch, www.youtube.com/watch?v=HE0agejrdIA.

  Page 2 She was a saxophone fan: Dowler family home video released by Surrey police in 2008, as posted online by the Telegraph: www.telegraph.co.uk/news/uknews/crime/8505692/Milly-Dowler-police-video.html.

  Page 2 dressed in classic British school uniform: Much of this reconstruction is based on Colette McBeth, “Court Sees CCTV Footage of Milly Dowler’s Last Journey,” BBC News, May 11, 2011, www.bbc.co.uk/news/uk-13367711.

  Page 3 For most of 2002, Milly’s parents and sister had no idea: Ben Taylor, “Nightmare for Milly’s Sister,” Daily Mail (UK), www.dailymail.co.uk/news/article-109162/Nightmare-Millys-sister.html.

  Page 3 poring through Milly’s journal writings: Caroline Gammell, “Levi Bellfield Trial: Pornography Made Milly Dowler’s Father First Suspect,” Telegraph, May 16, 2011.

  Page 3 Milly’s bones were found months later: “Bones Gave No Clues to Milly Dowler Killing,” Sun, June 14, 2011.

  Page 3 The Dowlers’ pain and anger were heightened: Nick Davies an
d Amelia Hill, “Missing Milly Dowler’s Voicemail Was Hacked by News of the World,” Guardian, July 4, 2011, as well as subsequent coverage that month in the British press.

  Page 3 people working for Murdoch’s News of the World: Shenai Raif, “Hackers Jailed for Royal Tap,” Daily Mirror, January 27, 2007.

  Page 4 Murdoch controlled roughly 40 percent: “Murdoch Sells Voting Shares in News Corp. Worth About $40 Million,” Dow Jones Business News, February 15, 2013. Other elements of this paragraph about Murdoch’s holdings and his aspirations for his family are based on my interviews with current and former executives for News Corp in the US, UK, and Australia.

  Page 4 What to do about the CEO of Murdoch’s British properties: Jon Ungoed-Thomas, “Cracks in the Titan,” Sunday Times, July 17, 2011, supplemented by my contemporaneous interviews with a News International official and a News Corp official.

  Page 5 the company’s $14 billion takeover: David Folkenflik, “It’s the End of the ‘World’ but the Story Isn’t Over,” Weekend Edition Sunday, July 10, 2011, and similar coverage elsewhere.

  Page 5 Everyone at that meeting with the Dowlers knew: Exchange between Murdoch and the Dowlers is based on my interviews with two people who had contemporaneous knowledge of the meeting. Additionally, public statements from Dowler family lawyer Mark Lewis on July 15, 2011, as above.

  Page 6 an echo of old battles: Shawcross, Murdoch, pp. 20–29.

  Page 6 New allegations claimed that his reporters: “Phone Hacking: 9/11 Victims ‘May Have Had Mobiles Tapped by News of the World Reporters,’” Daily Mirror, July 11, 2011.

  Page 7 Gemma Dowler spoke directly to Murdoch: Sally Dowler, testimony at Leveson Inquiry, November 21, 2011, p. 11.

  Page 7 blinking into the July sunlight: “History for London, United Kingdom,” Friday, July 15, 2011, www.wunderground.com/history/airport/EGLL/2011/7/15/DailyHistory.html?req_city=NA&req_state=NA&req_statename=NA.