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

  For Nora—

  who warned me never to be boring

  And for Jesse and Viola—

  who never are

  Copyright © 2013 by David Folkenflik.

  Published in the United States by PublicAffairs™, a Member of the Perseus Books Group

  All rights reserved.

  No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information, address PublicAffairs, 250 West 57th Street, 15th Floor, New York, NY 10107.

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  Book Design by Pauline Brown

  Typeset in Century Expanded Lt Std by the Perseus Books Group

  Library of Congress Cataloging-in-Publication Data

  Folkenflik, David.

  Murdoch’s world : the last of the old media empires / David Folkenflik.—First edition.

  pages cm

  Includes index.

  ISBN 978-1-61039-090-3 (electronic) 1. Murdoch, Rupert, 1931-2. Mass media—Australia—Biography. I. Title.

  P92.5.M87F65 2013

  070′.92"dc23

  [B]

  2013014186

  First Edition

  10987654321

  CONTENTS

  Author’s Note

  1Two Families

  2Rupert in Oz

  3“The Gutter Is a Good Place to Be”

  4“The World Through Rupert’s Eyes”

  5Fair and Balanced

  6The “Fog of War”

  7The Voice of Opposition

  8The Greening of Rupert

  9The Flying Muslims

  10A Totebag to a Knife Fight

  11“As Bad As We Feared”

  12Sky’s the Limit

  13The Yard

  14“Goodbye, Cruel World”

  15“This One”: Rebekah Brooks

  16“Most Humble Day”

  17The Jewel in the Crown

  18WSJ: London Versus New York

  19“The Only Person in London”

  20Ailes Seeks a Legacy

  21GoodCo Versus ShitCo

  22“We Are Judged by Our Acts”

  Acknowledgments

  Selected Bibliography

  Notes

  Index

  AUTHOR’S NOTE

  THE EVENTS DESCRIBED IN THIS book opened an unprecedented and broad window into the thinking of Rupert Murdoch, his executives, and the culture at News Corporation (News Corp), the company he has led for more than six decades. Many senior employees have been forced to go on the public record in the United Kingdom as a result of allegations of widespread criminality at News Corp’s tabloids there. Yet it is hard to apprehend the context for those scandals without mastering the history of the company, the dynamics of the Murdoch family, and the world they inhabit. This book is an effort to understand and explain what really happened.

  News Corp and the Murdoch family made a conscious decision not to cooperate directly in the preparation of this book and actively discouraged others from doing so. That said, I have always found the company to be professional in my interactions with it and have endeavored to round out my reporting and understanding of the events described here in other ways. In particular, I am deeply appreciative of the many current and former News Corp executives and journalists in three countries who have taken time to offer insight, details, and guidance for this book.

  As a consequence, however, I have had to rely at times on sources that I cannot identify directly because they are not authorized to talk publicly about News Corp and Murdoch family matters and do not want to jeopardize their jobs or future livelihoods. Every remark or statement presented in this book inside quotation marks is taken directly from interviews, transcripts, public testimony, court records, contemporaneous notes, speeches, corporate or government documents, or as otherwise specifically noted. Quotations that are italicized were obtained from at least one source with direct knowledge where the import is clear, but the precise wording was not recorded in such a way as to be ironclad months or years later. Quotations taken from news articles, documents, or previous books are noted as such, either in the text or the notes that follow.

  This book reflects the knowledge I have gained during my thirteen years covering the media, first for the Baltimore Sun and especially since joining NPR News in 2004. NPR News is both my employer and the subject of parts of two chapters of this book. To its credit, NPR has always allowed me to report on the network as my editor and I believe events warrant. Similarly, NPR has approved my decision to write this book but has not sought to influence its content.

  1

  TWO FAMILIES

  THE MAN AT THE CENTER of the maelstrom sat across from the parents of a dead girl, his head cradled in his hands. He rocked slightly. I’m sorry, he kept saying. I’m so sorry.

  He was tanned and reasonably fit, with closely cropped hair that he had allowed to assume its natural gray color. He wore a perfectly cut pinstripe suit and a sharp gray tie, befitting talismans of his status as a commanding corporate chieftain. The people gathered in an expansive suite at the luxury hotel One Aldwych in the heart of London, a five-star stop that catered equally to Saudi investors and Hollywood celebrities, were all fixed on Rupert Murdoch.

  The billionaire was used to being the focus of attention among the powerful, whether they were asking for favors or complaining about the way he ran the English-speaking world’s most important media empire. Some competitors could boast a greater market value than Murdoch’s News Corp. None was more influential. Murdoch had become a man beyond states, someone who sliced Gordian knots rather than trying to untangle them, a self-styled buccaneer with little but contempt for self-satisfied establishment worthies or narrow-minded government regulators.

  Like one of his own satellites floating above the earth, by 2012 Rupert Murdoch floated above the borders and limitations of the practices, laws, and folkways of mere nations. His company served millions of readers and viewers on five continents, with a strong presence in the English-language powers of Australia, the United Kingdom, and the United States, as well as in China, Europe, India, and Latin America.

  Murdoch had long ago become one of Britain’s most powerful figures and cast an even greater shadow in his native Australia. Through the New York Post, his company enforced a kind of discipline among politicians who hoped to operate in the largest city in the US. Through Fox News and the Wall Street Journal, his journalists shaped popular and elite currents within the Republican Party in the States. And with its movie studios and its broadcast, cable, and satellite TV ventures, News Corp had the financial muscle to ride out losses elsewhere in the empire.

  He had used flattery, disdain, and even remoteness to handle presidents, prime ministers, and popes. He had granted audiences to the aspirants and pretenders seeking to join those ranks. To encounter the ordinary people his publications had wronged was a rare event.

  Yet here Rupert Murdoch sat, human, even vulnerable. What else could he be, given the other people in the room? Bob Dowler was an IT consultant with a thin crown of white hair, an imposing presence, and an impassive expression. His wife, Sally, her face pinched and gaunt, was a teacher. They were in their fifties, roughly the same age as Murdoch’s daughter from his first marriage. And t
hey had endured unimaginable pain, partly because of one of his most famous properties.

  The Dowlers’ daughter Milly had been a thirteen-year-old with a quick smile. She was a saxophone fan who liked to gossip about boys with her older sister, Gemma. On March 21, 2002, dressed in classic British school uniform—blazer, Oxford shirt, and skirt—she left her school in the Surrey countryside at seven minutes past three in the afternoon. Twenty minutes later, she was on a train home. She got off at her stop. A witness spotted her a hundred yards away at about six minutes past four. After that, Milly was never seen again.

  For most of 2002, Milly’s parents and sister had no idea what had happened to her. The disappearance became fodder for hundreds of headlines speculating on her fate. The police focused on exactly the wrong clues, poring through Milly’s journal writings for proof of tension between the parents. They looked for evidence of conflict between the two sisters: Gemma was the favorite, Milly wrote. The absent girl was unhappy. Perhaps she had run away. Some investigators fixated on her father’s claimed interest in pornography.

  The outcome was as gruesome as any tabloid editor could imagine. Milly’s bones were found months later, dumped in woodlands. It took until June 2011 for prosecutors to try and convict a man for her killing. Police had missed earlier clues tying Milly’s death to the man, who had been found guilty in two previous deaths.

  The Dowlers’ pain and anger were heightened by the disclosure that people working for Murdoch’s News of the World had hacked into Milly’s cell phone voice mail messages to mine them for fodder. Even in death, her privacy had been violated. The Dowlers’ phones had been targeted too.

  They were not the only ones. In late 2005, aides to princes William and Harry had asked police to investigate whether their phones had been hacked. Two men working for the News of the World—the royals editor and a private investigator—were convicted and sent to jail. Celebrities, politicians, and sports stars were added to a growing list of people who had been targeted in the intervening years. But few in the United Kingdom and no one outside it cared until the Dowlers, an ordinary family who had faced a prolonged and extraordinary grief over their dead daughter, were shown to have been victimized as well.

  The police swung into high gear, while politicians who had sought Murdoch’s blessing lined up to denounce him in Parliament. Rival newspapers that had largely turned a blind eye to such behavior by the Murdoch press (and some of its rivals) turned on News Corp, which sold approximately two of every five national newspapers purchased by readers. The nation rose as one in revulsion.

  THE PUBLIC fury struck at the heart of Murdoch’s media empire—at some of his much-beloved newspaper properties that were the financial cornerstones of his print business and were supervised by some of his most trusted lieutenants and likely heirs. Britain had been the launching pad for Murdoch’s international growth beyond his native Australia. The scandal-driven tabloids News of the World and the Sun served as his financial base to buy two of the nation’s most respected papers, the Times of London and the Sunday Times, as well as to expand into the United States. His second son, James, his presumed successor and the company’s third-ranking executive, held responsibility for the company’s operations in the United Kingdom. Rupert ran News Corp like a family business, though its shares were publicly traded on NASDAQ. Together with his adult children, Murdoch controlled roughly 40 percent of News Corp’s voting shares. He had made it clear that the next leader of the company (perhaps after a brief caretaker period) would be someone who shared his last name.

  Those few days in July shattered many assumptions. How could News of the World function when police were treating its newsroom as a crime scene? What to do about the CEO of Murdoch’s British properties, Rebekah Brooks, or her predecessor, Les Hinton, the man Murdoch had handpicked to publish the Wall Street Journal after decades of devoted service? Rupert Murdoch, although famous for his loyalty, could be ruthless when threatened.

  Meanwhile, the company’s $14 billion takeover of the United Kingdom’s largest cable broadcaster had been cast deeply into doubt. And the standing of James Murdoch, the executive chairman of News Corp in Britain, Europe, and Asia, was imperiled as well. James’s older brother—Lachlan—had once been the heir apparent, but he retreated to Australia in the face of vicious political fighting with some of Murdoch’s senior executives. Amid the tabloid crisis Lachlan flew to New York and then London to be at his father’s side for strategy meetings. But he did not want to rejoin the company, even in a senior role. He enjoyed the freedom of distance from his father and the ability to lead his own, smaller media company back in Sydney. The boys had never taken their sister Elisabeth seriously as a possible future CEO for the company, largely because their father didn’t see her in that light. But her outsider status was looking stronger with each passing day, as James’s failure to head off this crisis seemed increasingly disastrous for the company.

  Murdoch was accompanied to the hotel by Will Lewis, a senior British News Corp executive who had previously been editor of the rival Telegraph newspaper. Everyone at that meeting with the Dowlers knew an out-of-court settlement would ultimately ensue. The logic was inescapable. The revelation that the paper had broken into the phone of a dead girl, barely a teenager, transformed the issue of cell phone hacking in the public’s eye from a bit of naughtiness, a lark, to something that frightened the general public. If it could happen to Milly, it could happen to anyone, however innocent and removed from the crosshairs of gossip reporters chasing after celebrity fluff.

  So some sort of deal made every sense. But at this meeting no one raised the question of money. The Dowlers’ lawyer, Mark Lewis, gestured for people to sit down. (The two Lewises are not related.) Mark Lewis and the Murdoch camp shared a secret that was about to become public: executives for News International, the British wing of News Corp, had assigned journalists and private eyes to follow him in hopes of uncovering some personal transgression they could use against him and his clients. Murdoch’s company was publicly contrite. But privately it had been playing rough.

  I know about you, Mark Lewis told Murdoch. I know your mother is still alive. She’d be ashamed of you for what you’ve done.

  Dame Elisabeth Murdoch was then 102, by concensus the conscience and chief patron of the Australian port city of Melbourne, Rupert’s birthplace. The media baron assented but then changed the emphasis. My father. He’d be ashamed. Keith Murdoch had led one of Australia’s most influential media companies. At his death his young son Rupert inherited a small paper in a forgotten city. Mention of his father seemed to change Rupert’s mood. His shame melted and he found himself repeating a signature complaint that had motivated him throughout his career.

  My father was a great newspaperman, Keith Murdoch’s son said ruefully in the London hotel room. The British never gave him his due. It was absolutely irrelevant to the people in the room, a strange aside, an echo of old battles called to mind by his father’s ghost that he had summoned unwittingly to the conference.

  Although they lived in different worlds, the couple sitting in that hotel room and the billionaire shared one experience: parenthood. The Dowlers were still grieving, just days after the conviction of their girl’s killer, and they were freshly wounded by learning of the tabloid’s invasion of her privacy. Murdoch was attempting to salvage his son James’s destiny.

  Murdoch was tired, from flying and from the pressure he faced. New allegations claimed that his reporters sought to hack the phones of victims of the September 2001 terror attacks in New York City. If the scandal spread to the United States, it could prove catastrophic to his control of the company. The news magnate who was famously obsessive about details—down to headlines, story selection, and photo captions—appeared out of touch when it mattered most. James, far from being able to shield his father, had left him and News Corp vulnerable to shame and ridicule.

  Gemma Dowler spoke directly to Murdoch on behalf of her parents and dead sister. When her sister
disappeared, Gemma had been a round-faced sixteen-year-old studying for the standardized tests that would get her into college. In the intervening nine years she had received a rough education about the cruelties of crime, the justice system, and the press. She took the time to admonish the media mogul. How would you have felt if it had happened to someone in your family? He sat with his head in his hands.

  In the space of a few days much of his record had come under assault, and Murdoch’s character was also being questioned. Was his cowboy style a quirk, a key component of his success, or a fundamental defect that had led to this very moment? Was he guilty, complicit, or, as he suggested, a bystander to this raft of cruelties?

  When he finally emerged blinking into the July sunlight on the marble steps of the hotel, Murdoch was confronted by a scrum of reporters and photographers and video camera operators, some of them his own. “As founder of the company, I was appalled to find out what had happened,” Murdoch said. “I found that out, I apologized. I have nothing further to say.” Later he would tell members of Parliament, his own reporters, and a judicial inquiry that he had been betrayed by those in whom he put his trust, as well as by the people they in turn had trusted.

  But it was not clear whether those people, his reporters, editors, and lawyers, had betrayed the nature of the company he had engineered from his father’s modest bequest. The uproar that ensued from the disclosure about the hacking of the voice mail messages of Milly Dowler and others arose from a creeping understanding of the culture of News Corp, based primarily on the qualities of one man. Rupert Murdoch’s company embraced a buccaneering spirit to create new fortunes, and it was built on personal and family ties more than most, with a clubbiness, or mateship, that was almost impossible for outsiders to penetrate. The scandals of 2011 revealed that culture had also become untethered from the well-being of the people it claimed to serve.