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

by Michael Wolff

  Murdoch on Cudlipp and Bartholomew: Murdoch interview, October 10, 2007.

  Harry Guy Bartholomew: The Mirror editor was also renowned for hitting his editor Cecil Jones over the head with an eight-foot plank of wood. Few realized—until “Bart” showed them, falling over himself laughing—that the plank was made out of balsawood. “To the Niminy Piminy,” Time, September 28, 1953.

  Private Eye: “Well, they were almost a sort of Establishment in a funny sort of way, in a strange English way, with somewhat more humor, but still you know…I laughed at it.” Murdoch interview, October 10, 2007.

  Anna’s car accident: Bert Hardy interview, October 4, 2007; “In Brief: Car Death Verdict,” Times (London), January 10, 1973.

  Merrill Lynch’s analysis of $45: Bancroft family sources.

  Zannino’s breakfast: Interviews with Murdoch and Zannino.

  Zannino tells Dow Jones executives: Interviews with Zannino and Michael Elefante, January 25, 2008, and Peter Kann, May 14, 2008.

  CHAPTER 6

  No women on News Corp. board: Murdoch told Sun editor Rebekah Wade that he was resistant to putting women on the News Corp. board before appointing Natalie Bancroft because he thought women talked too much. Wade conversation with author, May 8, 2008.

  Murdoch dinner at Milos: Rod Eddington interview, February 25, 2008.

  Bancroft family meeting: Interviews with Bancroft family members.

  “What the hell’s the matter with my Red Sox?”: Susan Pulliam, Dennis K. Berman, Matthew Karnitschnig, and Sarah Ellison, “Dynasty’s Dilemma: For Bancrofts, Dow Jones Offer Poses Challenge—Murdoch Bid Tests Family’s Cohesion; Sell ‘Grandpa’s Paper’?” Wall Street Journal, May 12, 2007.

  Peter McPherson: M. Peter McPherson interview, May 27, 2008.

  Irv Hockaday and Harvey Golub as logical candidates: Interviews with Dow Jones executives and Bancroft family members.

  Howard Squadron is a minor politico: Howard Squadron briefly ran for a West Side seat in Congress but withdrew because he said that politics would be too demanding for him as a single father. (His wife had died in 1967 of an aneurysm, leaving him to bring up three young children.) William Glaberson, “Howard M. Squadron, 75, Influential Lawyer, Dies,” New York Times, December 28, 2001.

  Ed Downe Jr.: Ed Downe Jr., along with Marc Rich, was pardoned by President Clinton in his last days of office.

  Murdoch is introduced to Felker by Katharine Graham: Murdoch interview, October 9, 2007.

  Murdoch on his fallout with Clay Felker: “I met him very early on. He was a friend. And I was very sad about our falling-out…Looking back, I was sorry it ended up a hostile takeover and so on, which it wasn’t in the sense that Clay was talking to me about me buying it. I think he was having a bet each way because he was fighting with his board. The truth was his board had over 50 percent of the shares. And they came to me, and they had bankers like Stan Shuman, the board came to me and said, ‘Look, we know you’ve been talking to Clay because Clay’s been telling us, reporting his conversations. And he won’t make up his mind. But we’ll tell you one thing for certain—we are going to sell. So you can buy or miss, whichever, you know.’ I thought about it for twenty-four hours and thought, ‘Okay, I’m sure I could make it up with Clay. The best thing is to do it and then over time he will calm down and we can talk it over to carry it forward.’ He reacted negatively, rushed to Katharine Graham. And then one evening in my apartment when it was all being signed, she called and said, you know, and then when she saw what we had it…and I made the worst business decision of all, it was a pretty small business decision, but a bad one. She said, ‘Well, would you sell New West?’ which was Clay’s idea of doing something in California that was losing money. And I think she was buying something for Clay to go to, but everything was too far gone. And I said, ‘No, I think it’s gone too far, I’m sorry.’ She said, ‘Okay.’…That was a cross to bear for about two or three years before we finally sold it off.” Murdoch interview, October 9, 2007.

  Murdoch chooses schools: Murdoch interview, September 22, 2007.

  Dalton’s advantage: Murdoch would also meet Van Gordon Sauter through the Dalton School when Sauter’s stepson attended that school with Lachlan Murdoch. Murdoch interview, October 23, 2007.

  Dolly Schiff had a crush on Clay: New York magazine sources.

  Murdoch hires Stan Shuman: Former World Bank president—and fellow Australian—James Wolfensohn was Murdoch’s original banker in New York. Wolfensohn said he could no longer represent him, so Murdoch turned to Stan Shuman. Stan Shuman interview, September 6, 2007.

  Elaine’s: William Claiborne and Robert G. Kaiser, “Takeover in Gotham: How a Rich Australian Publishing Baron Wrested Control of New York Magazine,” Washington Post, January 9, 1977; “Bacon and Eggs at Elaine’s and Other Tales of Rupert Murdoch’s Noisy Arrival on the New York Media Scene,” Advertising Age, March 29, 1999.

  Murdoch believes Burden has a loophole in his contract with Felker: Murdoch interview, October 9, 2007.

  Village Voice editors sue Clay Felker: Ed Fancher, Norman Mailer, and David Wolf received $488,000 from Clay Felker in a settlement after suing on the basis that Carter Burden had to offer his 80 percent share to them before he sold to Felker in 1974 for $2.5 million. “Paper Route: Buying and Selling and Buying the Voice,” Village Voice, October 18, 2005.

  Letter to board by staff: Deirdre Carmody, “Murdoch Seen Closer to Completing Acquisition of New York Magazine,” New York Times, January 4, 1977.

  Luck: Murdoch interviews, October 9 and 10, 2007; September 22, 2007.

  $2 million check: Murdoch interview, October 9, 2007.

  Gail Sheehy article: Gail Sheehy, “A Fistful of Dollars,” Rolling Stone, July 14, 1977.

  CHAPTER 7

  The Leak:

  From: Faber, David (NBC Universal, CNBC)

  Sent: Tuesday, May 01, 2007 10:46 AM

  To: Ginsberg, Gary

  Subject:

  I need to speak with you.

  I know.

  From: Ginsberg, Gary

  Sent: Tuesday, May 01, 2007 10:59 AM

  To: Faber, David (NBC Universal, CNBC)

  Subject: Re:

  You know what?

  Sent using BlackBerry

  From: Faber, David (NBC Universal, CNBC)

  Sent: Tuesday, May 01, 2007 11:00 AM

  To: Ginsberg, Gary

  Subject: RE:

  you know what I know and I’m about to report it

  WSJ

  Gary Ginsberg’s role at News Corp.: Gary Ginsberg conversations with author, June 2007, and interviews with Murdoch family members. “Gary’s great. I see him a lot. I love Gary, Gary Ginsberg. He’s so easygoing, bam, bam, bam…But he’s like, he can make you talk. And he’s fun. He can be friendly to anyone, you can take him anywhere and he will talk to your friend. That’s funny.” Wendi Murdoch, May 19, 2008.

  Elefante’s delay in telling the family about the offer: Interviews with Bancroft family members, their representatives, and Dow Jones executives.

  April 24 meeting: Interviews with Michael Elefante, January 25, 2008, and Bancroft family members and advisors.

  Roger Altman pushed out: Rob Kindler interview, March 7, 2008.

  Marty Lipton and Merrill Lynch advising the family on how to keep control: Elefante interview, January 25, 2008.

  Jimmy Lee is everybody’s favorite as the leaker: Author asked every interview subject involved in the deal who they believed leaked the information. Jimmy Lee was the response 90 percent of the time. Jimmy Lee said, “I don’t know. I honestly don’t. I just don’t know. I’m not, my style’s not leaking like that. There are guys who do what I do who do that. I’m one of these sort of straitlaced kind of guys. You knew it was going to get out.” October 15, 2007.

  “…not the biggest deal, but a jaw-dropping one”: David Faber interview, September 2007.

  Murdoch writes to Steiger: Paul Steiger interview, September 10, 2007.

  “S
tories need to be shorter…” These were recommendations Barney Kilgore made in 1958 for how to remake the New York Herald Tribune: As cited in Tofel, Restless Genius.

  “To the People who edit the…”: Deirdre Carmody, “Bullish Wall Street Journal Is Largest Daily in US,” New York Times, January 13, 1980.

  Description of the Wall Street Journal in 1970s and 1980s: Norm Pearlstine interview, September 12, 2006.

  Advertising in 1980s: Newspaper Association of America.

  Murdoch on the queen: “Someone had asked, some courtier, if the queen—the queen’s heard that Mr. Murdoch liked the film or something, and if the queen was to ask him for a cup of tea, would he accept? It shows you how they’ve come down. They would have thought that their invitation to tea was absolute royal command. Death sentence if you say no to their rotten cucumber sandwiches…Of course I’d go. She’s a nice old lady.” November 5, 2007.

  The Sun’s cash flow: Shawcross, Rupert Murdoch, 225.

  Diana: The day Princess Diana died, Murdoch met a News Corp. executive at the bar at the Dorchester and was obviously shaken by what the death would mean to Fleet Street. Murdoch proceeded to get “shitfaced” on a bottle of French chardonnay, passed out, and had to be carried out to Harry’s Bar around the corner, where he was due to meet a group of bankers. Former News Corp. executive interview, February 27, 2008.

  Enemas: Gary Ginsberg points out that he has taken numerous flights with Murdoch and never once witnessed this.

  Groping toward a style: David McClintick, “Publisher Paradox: Reserved, Soft Spoken, Murdoch Is Antithesis of the Papers He Owns,” Wall Street Journal, January 7, 1977.

  Steve Ross’ “racketeering” and mob connections: In what was known as the Westchester Premier Theatre Affair, two Warner executives were indicted for racketeering in connecting to a mobbed-up theater in Tarrytown, New York. Solomon Weiss was convicted and fined $58,000 with five years’ community service attached. Jay Emmett pleaded guilty and received a suspended sentence. The prosecutor had alleged that the execs had in fact taken the fall for Ross, which the Warner boss denied. See Roger Cohen, “A $78 Million Year: Steve Ross Defends His Paycheck,” New York Times, March 22, 1992, and Bruck, Master of the Game.

  Harry Evans hired by Ross: Roger Smith, conversation with author, January 22, 2008.

  Bill Ziff’s young woman: News Corp. advisor interview.

  Murdoch willing to give up citizenship: Murdoch interview, October 9, 2007.

  John Kluge is a bully and vulgarian: Bill Abrams, “Metromedia’s Kluge’s Moves Made Him Wealthy—And He Shows No Signs of Retiring After Sale of Stations,” Wall Street Journal, May 8, 1985.

  Kluge screws his shareholders. Kluge took Metromedia private in 1984 in a $1.1 billion leveraged buyout, then turned around and sold off the company in bits for $5.5 billion, netting him personally $3 billion. As Fortune pointed out in 1987, “Everybody admits belatedly that Kluge is some sort of business genius…But how much is genius worth? $3 billion? And how much of this prescience did he impart to his shareholders? Gary Hector, “Are Shareholders Cheated by LBOs?” Fortune, January 19, 1987.

  Murdoch meets Kluge: Kiernan, Citizen Murdoch, 272.

  “Under Australian Accounting Principles” Johnnie L. Roberts, Laura Landro, and John Marcom Jr., “Moguls Gamble: Rupert Murdoch Takes His Biggest Risk So Far in Purchasing Triangle,” Wall Street Journal, August 9, 1988.

  “I need to sell you…”: David Schneiderman, conversation with author, May 2001.

  Murdoch buys a jet: Barry Diller will buy the Gulfstream II from Fox when he resigns. Murdoch keeps the Gulfstream III.

  William Collins & Sons deal: Shawcross, 288–91, 333–36.

  Peter Kann meets Murdoch during South China Morning Post deal: Interview with Karen House, June 20, 2008.

  Warren Buffett takes a position: Interviews with Dow Jones executives and board members.

  CHAPTER 8

  Spiegelman’s vendetta: E-mail from Ian Spiegelman that got him fired, obtained by gawker.com.

  From: “Ian Spiegelman” [XXX]

  To: [XXX]

  CC: [XXX] [Richard Johnson] Subject: Abigail

  Date: Mon, 21 Jun 2004 21:23:05-0400

  Doug,

  You picked the wrong boy to fuck with, you pussy. I am not like anyone you’ve come up against and I don’t consider there to be any rules in this. I break aging trust fund pussies like you as a matter of course. If you think you can bring it, then bring it, faggot. Because I know that in my world you’re nothing but a two-bit lame. Do you know what a lame is, Doug? A lame is an also-ran, a lame is the excuse for the person he would have been if he wasn’t so fucking weak, so completely pathetic.

  You’re a lame and a pussy, Doug. And you should know better than to try and wage war on me. I’m better, stronger and smarter than you, you little Nancy. If I wanted to take your girl out, I would. You have nothing I can’t take away from you, you non-man. Doug, you little tiny fairy, you arrested boy, I will break your back over my knee in the press and I will push your face inside-out in private or public. You’ve crossed a line that you are currently too insane to see that you’ve crossed. But I am giving you this one freeby:

  Mention my name anywhere, ever, again, and we’re going to find out two things: First, whose word means anything anymore in this town. Second, how many times I can slam my fist into your face before someone pulls me off you. Now I know you’ll try and get a restraining order against me, you suit-happy little pussy. After all, you live in your mother’s apartment. And that’s fine, go ahead. I just want you to know who you picked a problem with, pussy. You picked a fight with someone who doesn’t sleep until he’s paid it back, you limp little woman. Now you wait for it. Best,

  Ian

  Stern’s shakedown: First reported by William Sherman, “The Billionaire, The Post and the $220G Shakedown: Page Six Writer Wanted $$$ to Stop Inaccuracies,” Daily News, April 7, 2006.

  “Page Six” breaks the inside scoop on itself: “Lies & Smears Aimed at Post,” New York Post, May 18, 2007.

  Russell Crowe deal: “Page Six,” ibid, included the following allegation without offering a denial: “The favor banking system also extended to Murdoch’s son Lachlan Murdoch, former publisher of the New York Post. After actor Russell Crowe purchased a house in Australia from Lachlan, Page Six was ordered to kill unflattering stories about him. Lachlan also extended this protection to famous friends like Nicole Kidman.”

  Ginsberg negotiates confession: Gary Ginsberg.

  Col Allan’s worry: Interviews with News Corp. executives.

  Dunleavy drunk: Charlie Leduff, “Neighborhood Report: Bending Elbows; Absolute Dunleavy: Vodka and Tonics at Langan’s,” New York Times, October 14, 2001.

  Aurora: Author visited Aurora and witnessed salsa dancing, as well as the Sydney Daily Telegraph’s editor, David Penberthy, arguing with the New South Wales premier (equivalent of governor) loudly down the phone over the next day’s spectacular front page. February 28, 2008.

  “The horrible conditions…” Chippindale and Horrie, Stick It Up Your Punter!, 42–43.

  “There’s levels and levels of editing”: Murdoch interview, September 19, 2007.

  rivers of gold: Classified advertising historically has been called the “rivers of gold” in Australia.

  If Murdoch had inherited Queensland Newspapers: Lachlan Murdoch interview, February 29, 2008.

  Frank Costello’s National Enquirer connections: Erik Himmelsbach, “Book Review: ‘The Godfather of Tabloid: Generoso Pope Jr. and the National Enquirer’ by Jack Vitek,” Los Angeles Times, September 4, 2008.

  “We voted to die with dignity”: Shawcross, Rupert Murdoch, 202.

  “Everybody in this country wants to get ahead”: Ibid., 201.

  Rebekah Wade sits in jail…: Michael Seamark and Stephen Wright, “The Fiery Redhead, two 999 calls, ex-Cabinet Minister and a Husband Nursing a Fat Lip,” Daily Mail, 9.

  Bill O’Reilly handled as internal matt
er: News Corp. executives.

  Col Allan and strip joints: Col Allan’s sojourns at strip joints became an issue in the Australian election in 2007 when it was revealed that the soon-to-be prime minister, Kevin Rudd, went to Scores with Allan when he visited New York. Rudd’s poll numbers went up after the story broke in a Murdoch newspaper.

  Col Allan misses Super Bowl moment: The New York Post ran its upfront news Super Bowl coverage with the headline “Ad-Ventures in Pro Football—Winners & Losers for Commercials During Big Game,” published February 2, 2004. The story began: “It was a Super Bowl to remember, for what was seen—and what shouldn’t have been. The telecast featured a billion dollars’ worth of new ads for 32 products, ranging from pickup trucks and Pepsi to computers and potato chips. On the field, the Patriots held off the Panthers to win the title 32-29, while Janet Jackson and Justin Timberlake unsuccessfully tried to steal the limelight with a steamy ending to the halftime show. But, as always, it was the new ads that had fans talking.”

  Col Allan’s genius: The pros and cons discussed by News Corp. editors and executives.

  Allan’s loyalty: Legendary story repeated by News Corp. executives in interviews.

  Larrikin Rebekah Wade: Conversation with author.

  Regan’s alleged anti-Semitic remarks: Judith Regan settled a defamation suit against News Corp., in which she alleged that the company fabricated the fact she’d made anti-Semitic remarks, in January 2008. News Corp. and Regan issued a statement describing an “equitable, confidential settlement, with no admission of liability by any party.” News Corporation redacted its claim that she had made anti-Semitic remarks: “After carefully considering the matter, we accept Ms. Regan’s position that she did not say anything that was anti-Semitic in nature, and further believe that Ms. Regan is not anti-Semitic.”