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

by Michael Wolff

  He might in fact be more appealing and less threatening as a slightly foolish rich man. If on one end of the rich scale there is Donald Trump, all mouth and affect, calling attention to himself, on the other end is Rupert Murdoch, shadowy and scowling, all head and no affect, his personality largely hidden from view. We actually seem, counterintuitively, to like it when the rich buy what they want—it brings them down to size, their needs. But it is hard to fit Murdoch into this ordinary and fallible role. Even though he is among the most gilded men in a gilded age, he is not characteristically associated with stuff, with the personal symbols of wealth—the houses, the boats, the planes. He has them (as many as seven homes—in Los Angeles; London; Beijing; Canberra, Australia; Carmel, California; Long Island; as well as Manhattan) but, partly because he works all the time (with an OCD level of attention), and partly because he comes across as rather less than human—ruthless as well as remote—the normal human pleasures and pride of being rich don’t seem to define him or leaven him. He’s Nixonian in that sense—enjoyment does not seem to be a priority. He is just so clearly more interested in power than in things. He understands that the symbols of power—and this is not something necessarily so well understood by the rich and powerful—aren’t power; they are distractions.

  What’s more, he always seems to be on the run. Disconnected, physically as well as emotionally. Everywhere but nowhere. Not part of anything. Just a man with a phone. He seems abstract, dis-embodied, puzzling. Not like you and me. Not susceptible to the ego enhancements we’d be susceptible to. When his second marriage ended, nobody, but nobody, thought there might be another woman.

  The most logical reason for a rich man to break up his longtime marriage was not even considered—not even by the great gossips and analysts who closely follow him (and a divorce when you’re one of the richest men in the world—a resident, at that time, of California, a community property state—is followed very closely). He is just too remote, unfeeling, preoccupied, old (he is a man who seems permanently old—his singlet is his symbol).

  Unlike so many of his peers, he has never become a familiar part of the social comedy. The media, for one, has not brought him down to size because he owns it—or owns enough of it to effectively inhibit its natural derisiveness. His public relations man of thirty years, Howard Rubenstein, even negotiated a truce with the other New York tabloid, Mortimer Zuckerman’s Daily News: Neither man’s paper will truck in the other’s personal life.

  Indeed, the hatred that people bear him and the fear they have of him have much to do with the sense that he has no weakness, no vanity, no need. He does not need to be liked—does not, it seems, even like to be liked.

  And yet here he is, wanting something so transparent, so human. Why would he want to start showing off at his age? Preening. Making a lifestyle statement.

  Oddly, Murdoch has lived here in this exact same building once before (though in a much less imperial apartment—one that cost $350,000 in the 1970s), with his second wife, Anna, steely and gracious, who had been nicely attuned to the world’s grandest neighborhood. Now Murdoch is moving back into the building with Wendi. He is being reborn as nouveau riche.

  The once-and-future-wife aspects of the dwelling (in all of these buildings you have ancien régime neighbors and great attentive staffs with vast historical memories) have to be figured into his statement. Either the current wife wants what the former wife was entitled to and Murdoch is giving it to her, or Murdoch himself wants to show that he is powerful enough not to have to go down a separate tangent, live downtown, just because he has a new wife.

  He noticed it first in the New York Times: Laurance Rockefeller had kicked the bucket. It’s that old New York truism—the way to find an apartment is to read the obituaries. He’d glimpsed the place once. When he lived here with Anna, in a duplex, he went to a building meeting in the Rockefeller triplex. Seeing that Laurance was dead and gone, that the place might be available, he started calling everybody he knew so he could be the first one to make an offer when it came on the market. He had Dick Parsons, then the CEO of Time Warner and a former banker, write a letter to David Rockefeller, the former head of Chase Manhattan Bank and one of the grandest of the city’s grandees as well as the late Laurance’s brother.

  Overlooking the zoo in Central Park, it is, at eight thousand square feet, with twenty rooms and four terraces and eleven and a half bathrooms over three floors, an “incomparably imperial apartment,” as the New York Observer, the preeminent chronicler of the city’s imperial apartments, gushes.

  Except Wendi, for one, hardly thinks so.

  “We go there, the walls are falling apart,” she’ll tell me. “It’s very WASPy. I didn’t understand. It’s not me. There was a hole in the floor…Awful. I think they live there all their lives. They hadn’t done anything for forty-five years. Everything is falling apart. The art was fantastic. I said to Rupert, ‘Isn’t that a great Monet?’ But we didn’t buy those. They’re gone and the carpet is old.”

  Other than the view over Central Park, she finds it hard to make sense of the threadbare and dowdy place—especially at $44 million. She says to Rupert that they’ll have to tear the whole thing down—and he says no way! And she says, well, negotiate, definitely don’t agree to the asking price. But he tells her to let him handle it—and immediately offers the whole $44 million.

  By now, his family is used to (if also slightly embarrassed by) his not very convincing efforts to be young. The hair dyed obviously and vainly orange—or, occasionally, aubergine—the same color used by Sumner Redstone and Donald Trump (they seem too proud to go out and get an expensive dye job, but too vain not to have a dye job at all). And his exercise regimen and his new diets. And, of course, the new children.

  But his family—new and old—worries that the $44 million apartment doesn’t seem like him trying to be young; it seems more like trying to do something, make a statement, before it’s too late. To say forget the Rockefellers—he is the man of the moment. The man who sits on top of the city, which is arguably true, but so unlike him to say. To have what he wants while he can still get it.

  His executives, not at all used to having to deal with issues of Murdoch’s self, or identity, or vanity, retreat into the customary safety of assuming that he knows absolutely what he’s doing. Hence, after a day or two of exchanging puzzled and worried looks and dealing with the press (ultimately, the most difficult press inquiry is about who is going to pay the $50,000 a month for the temporary place while the new one is being renovated—Murdoch doesn’t understand, at least not until the PR people and accountants explain otherwise, why the company shouldn’t be paying the tab), they merely treat the new apartment with the same tact and gravitas with which they treated his remarriage.

  His older children—curious, to say the very least, on edge, really, sometimes in a cold fury, or cold sweat, about their place in the Murdoch world—are holding their breath while they wait to find out what it means that their cheapskate father, suspicious of most airs and vanities, now clearly seems to want people to know he has arrived.

  What does it mean? Is this a final statement? Some biological urge to make physical his presence before it’s too late? A valedictory piece of real estate?

  And then there is a second distressing event, occurring also at the end of 2004: Murdoch makes a mistake. The man who never takes his eye off the ball takes his eye off the ball. And in doing so, possibly imperils just about everything—his leadership of the company as well as his family’s future hold on it.

  In a move that the company’s bankers and its CFO, Dave DeVoe, think will help raise the price of News Corp. shares, the company, after long debate, decides to formally transform itself from an Australian company to an American one, and to transfer from the Australian Stock Exchange to the New York Stock Exchange. When that happens—and News Corp. and its bankers are well aware of this—all the News Corp. stock that is held by index funds in Australia (that is, the funds benchmarked to the Aus
tralian market) will automatically be put up for sale by their institutional holders. This happens on November 2, Election Day in the United States, which ought to find Murdoch directing the repurchase of his News Corp. shares, but instead finds him flying from L.A. to New York on the phone getting exit numbers that are then showing John Kerry on his way to becoming president. Arriving in New York, Murdoch heads to Fox News. He gets glummer through the evening and has more and more to drink, until, sitting with Roger Ailes in the control room as the raw data comes in, the results begin to turn toward George W. Bush’s reelection and he and Ailes become more and more elated. Murdoch doesn’t go home until 3 A.M.

  This election day also finds John Malone, the great cable television pioneer, longtime Murdoch rival, sometime Murdoch partner, and cold, calculating, disruptive, opportunistic, brilliant son of a bitch, out at his home base in Denver, buying up the News Corp. shares as they come onto the market.

  By the end of Election Day, George Bush is once again president, and John Malone has a menacing 19 percent voting stake in News Corp.—a stake second only to the Murdoch family’s 30 percent.

  Almost immediately the calls start going out to the Murdoch circle. It is a breach of all systems. The walls have been stormed. Malone’s options for wreaking havoc in the company are now wide-ranging. He could become an activist shareholder—an entirely foreign notion at News Corp., where the only man of action has been Murdoch himself. He might demand seats on the News Corp. board, a heretofore famously compliant body. He could continue to buy more shares until he goes head to head with Murdoch himself. He could begin a long siege, a war of nerves and lawsuits, to destabilize News Corp. and weaken the Murdoch family’s control. Malone’s presence is no less threatening given his reassurances that he does not mean to be a threat. It is most of all threatening because Murdoch is a man in his mid-seventies.

  Malone’s intent is likely to wait out Murdoch. In a world, without Murdoch he’d have maximum leverage. He could stand clearly in the door and prevent Murdoch’s children from running the company that was started by their grandfather and built by their father.

  Within days a poison pill is put in place at News Corp., making it impossible for Malone to up his stake from 19 percent and for any other outsider to amass a stake larger than 15 percent. But, in turn, that provokes shareholder suits, particularly by obstreperous investors in Australia.

  He’s handled worse than this—much worse. And yet the very fact that it has happened, that he didn’t do the simple thing of buying the company’s shares, is another indicator of News Corp.’s perhaps mortal flaw: that a $40 billion company is always waiting on one man to do what needs to be done.

  But don’t go there—nobody goes there.

  Murdoch himself is perfectly straightforward about what has happened. He messed up. It is his fault. He’s kicked himself for it. “I was asleep or something,” he will tell me three years later. But everybody around him is terrifically eager, desperate even, to put the blame somewhere else: on the banks, on the Australian regulators, on the index funds.

  They can’t let it be the old man’s fault. They can’t let that be suggested, because if it’s the old man’s fault it might mean…

  The single largest factor in News Corp’s future is almost never discussed. He thinks it embarrasses everybody else when he brings it up. And everybody else thinks it embarrasses him.

  Other people’s old age is a perfectly acceptable topic. His former wife Anna—the mother of three of his children—married “a nice old man.” He gets a particular kick out of telling stories about Sumner Redstone, the eighty-five-year-old not-always-composmentis chairman of Viacom, one of News Corp.’s chief competitors. And then there is his longtime banker and former board member, Stan Shuman, with him since 1976, who, he feels, is past his sell-by date (Shuman will become a board member “emeritus”). John Kluge, the former head of Metromedia, “must be a hundred or ninety or something—and looks it,” Murdoch happily will note, recalling the man from whom he bought his first American television stations.

  It is not just his age that is a verboten topic for the people around him but all other suggestions of his vulnerability as well. This is out of an old-fashioned sort of respect due the patriarch. And it is out of a pervasive sense that he isn’t vulnerable (indeed, as to his age, his ninety-nine-year-old mother is still alive and well in Australia, as everyone regularly repeats and reminds themselves). And the fear that he is.

  Nobody mentions his obvious hearing problems. If an outsider brings it up, the insiders are careful to downplay it—“No! Why do you say that? He hears fine.” If he loses his train of thought, this is just a sign of his deeper concentration. And his prostate cancer—a carefully controlled story in 2000—is now, when it’s mentioned, and it’s rarely mentioned, a further demonstration of his indomitability, isn’t it? He’s recovered, hasn’t he? And never missed a day of work.

  They can and will continue to rationalize. No one around him, for instance, would say, or even consciously think (or if they did they’d suppress it in a hurry), “You old fool, why are you buying such a vanity apartment?” Or “You senile turkey, how could you miss something so basic as a mother lode of voting shares coming on the market?”

  Perhaps the apartment is a new phase of his personal development: The outsider has taken over the inside. Possibly Murdoch and News Corp. are about to transition from their perpetual not-of-our-class status into the elites. As for Malone, that son of a bitch, people at News Corp. understand that sometimes Murdoch has to put himself into a corner in order to get out of a larger mess—he functions well when it’s do-or-die.

  And yet existential dread is existential dread—there will be an end. Sometime. Which they know. Sort of.

  SPRING AND SUMMER 2005

  Actually, Malone’s stake isn’t the only thing threatening his family’s future. Murdoch has, by early 2005, more immediate problems. His two key executives—Peter Chernin, the COO and president of News Corp., and Roger Ailes, the head of Fox News—are ganging up on Lachlan.

  It is Murdoch’s deepest and most atavistic desire that one of his own will run the company in the future. This is problematic for a number of reasons, not least of all that none of his children is remotely qualified. Unless he himself appoints one of his children CEO—that is, uses his power and influence to supersede himself, which for him would be a kind of suicide, no more likely than the Queen of England turning over the throne—the Murdoch family, with him out of the picture, doesn’t necessarily have enough control over the company to dictate succession. Post-Rupert, the board of News Corp.—even though its members are abjectly loyal to Rupert—would have other issues to consider, like shareholder suits. Such a succession plan—from the grave, as it were—is going to take a great deal more finesse on Murdoch’s part. It isn’t helping that Chernin and Ailes are agitating against Lachlan, who, after a mostly successful chapter running News Corp.’s Australian operation, has come back to the United States as the company’s number three executive, behind Chernin.

  News Corp. has been, for most of its history, distinguished by its self-effacing, if not weak, executives. What you understand as a member of the News Corp. family—even as a well-loved member—is that there is one father who is sui generis and irreplaceable. Without the father there is no family. It is a company without competing power centers. Without, strangely, even competing egos. All power and personality and even need exist in relation to the greater power and personality and need. Everybody is in the service of what Murdoch wants. This is almost freakishly out of the norm of any large organization—all of which are most characterized by their political intrigues and plots and competing power centers.

  Not News Corp. The only time an executive ever really tried to insist on his value independent from Murdoch himself was in the early nineties, when Barry Diller, then the head of Fox Studio and the Fox network, suggested he ought to receive a meaningful stake in the company. Murdoch and Diller, acknowledging the in
superable conflict, worked out the terms of Diller’s departure.

  Chernin has succeeded at News Corp. precisely because he never wanted to succeed in the terms in which he seems to have now succeeded. He has been a man content making many millions a year. But suddenly Chernin’s affable Everyman style has become all the rage.

  In an industry that was dominated for a generation by extreme figures and megalomaniacs, Chernin is suddenly a major relief and the new role model. There is the sense of a whole new generation of nice, reasonable, and, well, normal guys ready to run outsized media businesses: Chernin at News; Jeffrey Bewkes, the number two at Time Warner; Bob Iger, the number two at Disney. It’s the age of the number two.

  Chernin looks like an actor, but he’s too pretty, too bland, to be a star. A lack of distinction envelops Chernin. He’s frictionless. Smooth. He is by nature and temperament not quite even a number two, just a supernumerary. That’s how he’s described by virtually everybody—or, at least, that’s how he was described until he became many people’s candidate for number one at other companies.

  Chernin had cemented his power at News Corp. months before the Malone problem. For six months the rumors had been everywhere—not least of all because of Chernin’s own deft promotion of the story—that he was a candidate to replace Disney’s embattled and unpopular CEO, Michael Eisner, who had pushed up his retirement.

  Disney’s feelers to Chernin (whether or not it was an outright offer or great poker playing on Chernin’s part) had put Murdoch on the spot. His departure would have left News Corp. without even the appearance of a successor—except for Lachlan, and that’s precipitous (not to mention highly presumptuous, if not downright obnoxious and ridiculous, for many shareholders, least of all John Malone). It would have meant that Murdoch, at seventy-four, would lose the person he’d come to rely on most—from a certain point of view, although not Murdoch’s, his co-CEO—and it would have cost the company dearly in market value. Billions, possibly. News Corp. would not just lose Chernin but have to compete against him as well.