Autumn of the Moguls

by Michael Wolff

  Upstairs too the News Corp. headquarters was inauspicious. It could have been housing any number of workaday businesses without airs—law firms, accounting firms, ad agencies of third or fourth rank.

  The temporal, physical, real estate world was clearly an afterthought for News Corp. Murdoch wasn’t building any literal monuments to himself.

  A young man of some obvious stylishness—he was the first suggestion of any overt fancy stuff here—came down the hallway to escort us. At first, given his youth and careful presentation, I thought it was a Murdoch assistant. In Hollywood, where of course Murdoch also resides, moguls are always surrounded by young, good-looking, perfectly turned-out assistants. This would have been an understandable, if slightly out of character, accoutrement for Murdoch. But it was, on second look, and then confirmed as we shook hands, not an assistant at all, but Rupert’s son and the theoretical heir to all this, the 31-year-old Lachlan Murdoch.

  He was, really, amazing-looking. Actor amazing-looking. Male model. He slightly gave the lie to Murdoch’s apparent lack of interest in appearances.

  “We’re listening to the DOJ news conference,” he said to Ginsberg.

  Then we were joined by Chase Carey, the chief operating officer and number three in the company behind Peter Chernin (who was in Los Angeles) and together we all went into the small conference room which doubled as a dining room.

  Murdoch was at the table. The conference room itself was purely nondescript—office furniture ordered from a catalogue. He was bent over a speakerphone with unimpressive audio quality. He acknowledged me and shook my hand without breaking his concentration.

  Everybody took seats at the table—it was already set with lunch places—and fell into listening with him. It was a quiet room except for the fuzzy voice from the speakerphone.

  As inauspicious as this seemed, it was the pivotal moment.

  The Department of Justice was announcing that it had decided to file an antitrust suit against EchoStar in its efforts to acquire DirecTV from General Motors.

  The deal was dead, in other words. It couldn’t happen now.

  The litigation that the Justice Department was commencing would tie up the deal for years.

  There was no recourse here.

  EchoStar was out in its bid for DirecTV.

  This was exactly the outcome that Murdoch had wanted. It was one of those moments of everything going exactly right, of getting everything you might have dreamed of. The kind of thing that doesn’t happen to ordinary people.

  Everything now was a foregone conclusion. There was, simply, no deal. Filing an antitrust suit against a pending merger was as close to a government fiat as you could get in a democratic society. There was just nothing you could do—no way to fight it. Except to fight it, but the act of fighting it would mean you couldn’t do it. It was over. Murdoch had won. All of these guys were listening with Murdoch, straining to hear this news conference, just to savor all of the details of the victory, no matter how anticlimactic.

  But finally I got some attention and Lachlan told the waiter he could serve the lunch.

  I wasn’t entirely sure how much Murdoch remembered me from our dinner in the spring. There wasn’t a lack of recognition, but he wasn’t turning to me as an old friend either. So with some contortions I endeavored to reconnect the bond: “The circumstances are so different with EchoStar and the Direct deal now from when we had dinner and were talking about this last spring. Who could have figured? Would you have thought this would be where you’d end up?”

  “We always thought if any deal was going to have antitrust issues this one would,” Murdoch said with finality.

  “So in the end this is really about the incompetence at General Motors. EchoStar has been able to learn everything about its competitor and leapfrog over them during this period, and you’ll be able to get this deal, if you want it, for much less money than it would have cost you a year ago. So GM is the total chump.”

  “Ya,” Murdoch nodded. “They might sue Ergen.” (Charlie Ergen, EchoStar’s CEO.)

  There was a little talk about who would likely sue whom.

  I had that feeling again of the intimacy of strategy. There was this sense with Murdoch that he lived in a warm bath of complex scenarios. And that you were invited to step into the warm water with him—and stay forever.

  He was, by both temperament and circumstance, I think, removed from the world. He was shy, reserved, suspicious, overly analytic. Then too, he was Murdoch: his wealth set him apart from normal human comings and goings, and so did the way he’d polarized much of the places he’d occupied. Few names have been so evocative as Murdoch’s. Maybe only Nixon. Only in the U.S. had he found some respite from the demonization that followed him. In Australia and the U.K. he was to many an Antichrist; whereas in the U.S. he was tolerated as an exceptional figure, a media mogul.

  Anyway, the strategizing and the working out of who might do what to whom, with what effect, and countereffect, was, for Murdoch, a way to occupy an amount of normal space—it was a way to interact with the normal world. His son joined in, proposing some new wrinkle on who might sue Charlie Ergen or who he might sue. You had to wonder if strategizing was his connection to his father too. He seemed not just deferential, but full of awe. He sat next to him and you could powerfully sense the son’s sense of the father. He touched his father often.

  It seemed unnatural, in a way, that the son in business with the father would not want to insist on a clear line of demarcation, on physically demonstrating that he was his own man, that there would not be a natural division of space, even something of a clash.

  I had a second’s envy for the way Murdoch’s son treated him, knowing my children would never treat me like this.

  Ginsberg suddenly began to reintroduce me. This seemed strange because it would be odd for me to be here already this long if it was unclear why I was here. In some way this was one of those formal, get-everyone-on-the-same-page moments that people in business are so fond of. But in another, I had the feeling that Ginsberg could not be sure what Rupert kept in his mind, or retained, or focused on.

  Ginsberg basically ran through everything again: the conference and its general point and purpose; Rattner, and Quadrangle, and that involvement; Heilemann, Battelle, and the going back and forth about London and the satellite transmission and up until the issue at hand—which was how I meant to deal with Murdoch.

  This was not a small point: Why were they even talking to me? How come I was here?

  Outside of the rigid left wing, I had been as negatively nattering about Murdoch as anyone—I must be among his more persistent gadflies.

  I had, little more than a year before, given the Alternative Mac-Taggart Lecture at the Edinburgh Festival, among the higher cultural moments in the U.K. media calendar—Murdoch himself had given the speech before—and delivered a mocking screed against Murdoch.

  Murdoch’s other son, James, had, in an interview—much to the delight of my own son, who repeated it around our house—called me “an obnoxious dickhead.”

  There existed the very real possibility for Murdoch that I might embarrass him publicly, and, for Ginsberg, that I might, by embarrassing Murdoch, endanger his job.

  Indeed, I’m not sure I trusted myself not to try something. Even without the intention or desire to embarrass him, even with my semicrush on him, I would not, given the public opportunity, trust myself.

  Of course, there was this book, which exerted pressure on the situation. If I made an enemy of Murdoch that could obviously have direct and painful repercussions—on the other hand, I already had their money, and, having made myself into a greater and more public Murdoch bête noir, other publishers would likely seek me out.

  Perhaps Murdoch just liked the way I talked. In the end, there couldn’t be too many people as insistently focused on the far-ranging microevents of the media industry as Rupert and I. And to the degree that Rupert was probably not too interested in much beyond that, I was an obvious
and good playmate for him. Undoubtedly he regularly exhausted all his other playmates.

  But all of this was likely much more in my head than on their minds. Quite possibly they could not have immediately summoned what I’d written or said in the past about Murdoch. However hard to fathom, they really might not have been familiar with the substance of my Alternative MacTaggart Lecture.

  Rather, it was probably just the case that I had, through my own wiles, promoted myself into the position of Murdoch’s interlocutor and now here they were engaged in some modest effort to make sure that what I would say was not going to be too annoying.

  “Here’s my point of departure,” I said. “In the modern era you have held power longer than anyone else in America.”

  Murdoch looked at me, either embarrassed or uncomprehending.

  “Seriously, look at it: You’ve been a major presence in this country since 1976. There’s nobody—I’ve gone through this—who’s had influence on the level that you have had for that long a period of time. Who else? Really.”

  “In a sense, it’s true,” Lachlan said—appreciatively, it seemed.

  “You’re not going to say that, are you?” interjected Ginsberg with some obvious alarm.

  “You don’t want me to? Do you disagree?”

  “I don’t know if I disagree, but I think if you say something like that with Rupert on the big screen kind of floating and looming in front of everybody…”

  My guess, though, looking from Ginsberg to Murdoch, was that Murdoch didn’t mind it so much—that I had found a soft spot.

  “What I want to do,” I said, “is look at the greater breadth of the career, the greater meaning of the career. I don’t want to make this just about deals. I have this theory that in the quarter century or so that we’re talking about, to a large degree business figures, and most prominently media business figures, replaced politicians as the psychic leaders of the country.”

  “I’m not sure—” Ginsberg started.

  “I could talk about that,” said Murdoch. “The importance of business,” he said, shifting the focus to a less interesting and provocative footing, but giving me my question.

  “Within that too, I’d like to pursue this thing I see that you are the reason that the media business is the way it is. That you came to the U.S. and started to see the media business in this fundamentally different way than everyone else saw it, save for perhaps Steve Ross—”

  “And John Malone,” said Murdoch.

  I couldn’t tell if he was making a point about Malone’s prescience and strategy or if he was just being polite to his largest shareholder. In fact, I didn’t think Malone was quite relevant to the point I was making—but I gave it to him. “And Malone …”

  “And Sumner,” he added, including the Viacom chairman.

  “And that all these guys in the U.S. media business saw what you were doing and freaked out and started to do what you were doing without knowing exactly what it was that you were in fact doing. In the land of the blind …” I added, before I realized that this was not exactly flattering.

  He said something about debt structure, which I missed. He spoke in a low reflective voice anyway, with something of an older man’s negligent mumble, and that, together with the slurred Australian accent, made entire sentences incomprehensible.

  It was one of the things that you went back and forth trying to evaluate, or guess at: How old was he? Really how old. How aged? He was soon to be 72, which was either not that old, or it was noticeably getting older, or it was soon to be very old. The question was, which line was he near and which had he stepped over?

  This was the elephant in the room. Of course, no one would ever bring it up—that would be not just rude but frightening.

  His handsome, very young son by his side lent him a lion-in-winter look—both kingly and decrepit at the same time.

  “And I would love to spend some time,” I said, “talking about newspapers. Among all of the men who run great media empires you are the only newspaperman. There aren’t many of us left in the media business who are from newspapers,” I added, pleased to make this about me too. “And for that matter, you’re the only newsman in the whole mogul bunch. You are the only person who runs a major media company who knows how to write a headline.”

  I was, I felt—and was slightly worried that he would sense this—buttering up the old guy.

  In part, I had no other motive than that he was old, and there was the natural and generous and self-protecting desire to want old people not to feel too old when you’re around them. But obviously my other motive was that if you wanted to make a connection, bank a relationship, get in good, with anyone in a station above you, well then, you had better engage in some flattery.

  On the other hand, this was at war with the bright-boy thing in me, too. Rupert, I was sure, would respect me if he saw how smart I was. (It was hard to escape the bright-boy compulsion, and I’d long ago given up trying to.)

  “At the same time,” I said, turning the point, “newspapers are all but dead.” It occurred to me I shouldn’t say “dead” so emphatically around someone who must have a heightened awareness of his own mortality. “You have this background in a business that functionally no longer exists—”

  “Well, newspapers are hardly dead—”

  “And, in fact, I think you can make an interesting case that everything you’ve done, every expansion you’ve made, is all in an effort to be able to keep doing what you’re doing while understanding that the basic way of doing it is over with. That you’ve been outrunning some inevitable obsoleteness.”

  The issue of why I was saying such a slap-in-the-face thing was at war with the feeling that I was making a very good point.

  Murdoch brought up the New York Post—the one paper he had left in the U.S. I thought he might be doing this because that was one of Lachlan’s key areas of responsibility—Lachlan was the publisher. He was including Lachlan here. He was the expansive and attentive father.

  Also, I wondered, trying to contain a surging sense of my own importance, if he wasn’t bringing up the Post because I had written that he would surely be closing it soon.

  The Post has been the sentimental heart of News Corp. in America. Undoubtedly, it reminds Murdoch that he’s a newspaperman. But my guess had been that Murdoch was not that sentimental.

  I was figuring that tough times, which these were for any media company, tended to be especially tough on Murdoch. News Corp. owes more money, has thinner management, and is more dependent on advertising than most other giant media companies. What’s more, it counts on growth and expansion as the essential tool of its financial engineering. News Corp.’s position as the largest owner of television stations in the nation in a rapidly deteriorating advertising market doubtless put the company in an ever-tightening squeeze. And, if he were to have any hope of doing the DirecTV deal, I doubted if he was going to be able to waste another nickel on the long-indulged Post.

  What’s more, Murdoch, who faced bankruptcy during the last recession, has always been a forceful and unsentimental retrencher.

  In other words, it is one thing to support a paper that loses, say, $20 million a year (the consensus number among industry observers) when the rest of your operation is healthy and growing. It’s another thing when the rest of your operation is facing a dramatic downturn, to support a paper whose losses, in the midst of the most difficult media-market conditions New York City has ever faced, will exponentially increase.

  But I was all wrong. Way off.

  Hence, the point I was now making. Unlike other media companies, there was, counterintuitively, a feeling heart to News Corp.—Murdoch really seemed to love the Post. (He had had to give up the Post once before in order to comply with government regulations allowing him to buy television stations in the U.S. market—indeed, he had to give up Australia to buy those television stations—and had then fought his way around those government hurdles to reacquire the paper.) And, likewise, there was someth
ing unreasonable about News Corp. (which is the thing that frightened many people), as indicated by his stubborn ownership of the Post. Still, if the Rosebud Post was this sentimental thing that existed to remind him about what he was, it was also, I think, useful in reminding him what the company wasn’t. The Post was the irrefutable reason the company did the things that it did—expanded willy-nilly into all kinds of new media forms and platforms. If it didn’t, the alternative was just being the Post.

  But we weren’t talking on this level.

  Murdoch, right away, was talking about the weaknesses of the Daily News. To hear him talk, you could only assume—you’d almost become convinced—the Post was a thriving business.

  “You know,” I said, just in case he didn’t know, “that just a few months ago I was pronouncing the Post dead.”

  “I know,” he said, but not meaningfully, nor with any kind of humor. If I had been teasing him with my theory about the Post, or flirting with him, it had been hopelessly one-sided.

  “What I’m trying to get at,” I said, “is that instead of talking about this moment in the media business, or the minutiae of this moment, or the present business trends, I’d like to get you to talk about”—I gestured largely and inarticulately—“the thing. The whole big thing.”

  “Like what?” said Ginsberg, trying to helpfully prompt me into greater specificity.

  What I was saying, with a first-date inarticulateness, was that I wanted him to reveal it all. I wanted to know how he felt.

  Business, like politics, the other primary public language, provides all sorts of opportunities to avoid the real subject. To create a parallel world. The business and political worlds are expressed in increments, by process, producing a mock order, and an uninteresting one at that.

  There are many businessmen and politicians so inculcated in this language that they don’t have a view beyond it. But I was sure that Murdoch did. That was the interesting thing about being with him. He was surrounded by emotion.