In The Man Who Owns the News, biographer Michael Wolff portrays an obsessive arriviste with passionate – but oddball – business judgment

MICHAEL WOLFF, MEDIA columnist for Vanity Fair magazine, was granted unprecedented access to Rupert Murdoch, his family, friends and employees to write his biography of the media mogul, which is subtitled, Inside the Secret World of Rupert Murdoch. “He has been as helpful in facilitating this book as I can imagine any CEO ever being with a writer who owes him nothing,” Wolff writes. Wolff has written a biography structured around the deal that represented the culmination of Murdoch’s lifelong ambitions: the purchase of Dow Jones & Co, publisher of the Wall Street Journal, for US$5 billion last year. In these excerpts, Wolff details Murdoch’s initial attempts to succeed in the US, the resistance he encountered and his frequent miscalculations. Also included is a description of Murdoch’s first glimpse of the grail of the Wall Street Journal.

The hatred of Murdoch by the great population of journalists who don’t work for him is stoked by many things, but underlying these things – and forming the real, gut-level antipathy for him in the newsroom at the Wall Street Journal, a sense of the end of the world – is the structural difference that he actually runs his newsrooms. If you work for Rupert, you do his bidding. You submit to Rupert. He gets his newspapers wherever he is in the world, gets out his red pen – just like his father before him – and puts a cross through stories that shouldn’t have run, circles a photo and draws an arrow to show where it should have been placed, notes a headline that should have been two lines rather than one, and so on.

He denies that he interferes – sort of (he doesn’t actually want people to think he’s not involved). The people around him, his executives and his editors, defending their own bona fides, deny this categorically. This – such denials about interference – is artifice that Murdoch and his people believe everybody is practicing. They actually don’t accept that a hands-off structure truly exists anywhere. And if it does exist, then something has gone radically amiss – and you’ve a fool for an owner.

From his view – and understand that, except for his brief internship with Beaverbrook, he has only ever worked for himself; he has no idea, really, how other journalistic organizations function – it would be absurd and irresponsible for him not to run his papers ...

without firm plans and only some old family contacts, 42-year-old Rupert Murdoch, an Australian publishing entrepreneur relocated to Britain – not the most savory one either; reports of the “Page 3” bare-breasted pin-ups in his London newspaper precede him – starts traveling regularly to New York in 1973, looking for business opportunities. He cuts a certain sixties-ish figure: the pretty slick media executive. With his double-breasted blazer, longish dark hair starting to thin (the beginnings of a comb-over), a frequent cigarette (he’ll stop smoking within the year), and satisfied, plumpish figure, he’s more the Madison Avenue or Mayfair type – an artful combination of diffidence and intensity – than a casual or scruffy Fleet Street guy.

His father was the most powerful newspaper publisher in Australia. Some 20 years after Sir Keith Murdoch’s death, his son has made his own name – in Australia, he’s almost as famous as his father was – and has now branched out, aggressively and noisily, to the United Kingdom. But if he’s known for anything in the United States, it’s that two years before, in London, he was the main character in a bizarre incident that got international attention: he’s the rich guy whose wife was targeted by kidnappers who instead snatched and then murdered the wife of one of his executives who’d had the misfortune of borrowing the Murdoch family car (a Rolls-Royce, which added nicely to the story). He’s the disreputable tabloid publisher at the heart of a macabre tabloid tale. The subtext of the kidnapping as it has been reported in the London papers is that it surely has something to do with, and confirms, his notorious character. (Not to mention what it says about the perils of working for him.) That’s Murdoch: he’s shady and alarming and dangerous.

So New York, in addition to its business potential, is something of an escape from what the Brits feel for him, and he for them. New York, he senses, is his kind of town – a place where he’ll be more welcomed than disdained for his bit of notoriety.

He’s a workaholic when this is not yet a popular thing to be. He’s got no friends – has really never had any. “Too busy, to tell you the truth,” he will explain decades later in one of our interviews. At the age of 75, he’ll say to his third wife, Wendi Murdoch, when she presses him on the issue, that he could have had them if he’d wanted to. He has no interests outside of his work: not sport (he may be the only Australian man not interested in sports), not culture, not reading, not movies. He has no social aspirations either. Money itself isn’t even that compelling to him. He’s eerie, or scary, in his lack of lifestyle desires and need for approval. There’s almost a sort of autism or fanaticism to his focus. He’s a new sort of business guy – “married to the business,” as he will characterize himself many years later, not without some ruefulness. Working isn’t the means to an end; it’s the end. It’s one man’s war – a relentless, nasty, inch-by-inch campaign.

For the past 20 years, he’s been focused almost solely on newspapers. He perhaps knows as much about the various aspects of putting out a newspaper – paper, printing, distribution, advertising, reporting, editing, headline writing, promotion – as anyone in the world. When he hasn’t been working at one of his papers – eight in Australia, as much as 3,000km apart; two more, 25 hours away, in London – he’s been traveling between them. It’s a kind of monomania that, from an early age, fascinates and disturbs other people.

He’s aloof, contained, preoccupied. “Shyness,” Simon Jenkins, a former editor of Murdoch’s Times of London, will write in his 1986 study of newspaper owners, is “a characteristic shared by most second-generation proprietors, growing up under dominant fathers.” In 1984, Harry Evans, another editor of the Times – whom Murdoch would rancorously fire – will recall the Rupert he first met in 1969 as being socially “crippled by shyness.” “He shuffled, smiled and left sentences in mid-air. He seemed too diffident to be a tycoon and too inarticulate to be a journalist. This was as
as appealing as it was surprising.”

Still, he can be disarming – if he cares to. He’s not a great conversationalist, but he’s a decent listener. He can even appear to be self-effacing – though this would hardly be the case. He asks good questions, and he’s witty in an understated way (it’s a sort of hangman’s wit – he’s most entertaining and caustic on the subject of other people’s lapses, losses and screwups). He’s a good gossip – he’ll offer information and he’s appreciative of the information you give him; he’s hungry for it, often rewarding the people who give it to him with sudden, surprising openness and easy, almost giggling laughter.

On the other hand, he’s often disconcertingly direct or abrupt – cutting to the chase, breaking the social flow. It’s a tic. It’s unsocialized. Lacking any depth of self-awareness (and being impatient with what that implies), he’s not all that interesting when it comes to talking about himself; he can’t tell you why he does what he does and has never been all that interested in the question. But he can be trenchant about other people – he’s got a snap sense of their weaknesses. He can apply this to their spouses, their bank accounts, their ambitions (he’s an expert on overreaching); he’s always filing away telling, or damaging, personal details.

He’s without flamboyance or personal exaggeration – he’s rather buttoned-down, in fact. His occasional excesses – the Rolls-Royce in London, for instance – are guilty ones. (Later, even when he’s much richer, he’ll continue to be awkward about anything that suggests personal vanity or indulgence – the face-lift he’ll get in the late 1980s, which he will remain embarrassed about, and which will later fall, or the fretful decision to finally get himself a private plane after he buys Twentieth Century Fox and feels he has to match his status with that of the Hollywood people.) He certainly does not seem like a tabloid publisher – or what you would think a tabloid publisher might seem like.

To his employees – the people who, apart from his wife, know him best – he can be cold, impatient, all business, even cruel. And yet among them there’s a sense of excitement and opportunity about working for him – and this at a time before he’s done much to suggest great excitement or opportunity. He tends to hire people who are grateful for the chance, who feel they’re getting more from life because of him than they would have without him. Outsiders tend to view his little band as not ready for prime time. It’s one of the reasons he will, in his career, be so regularly under- estimated: he never seems to be surrounded by the brightest bulbs, the A-team. Still, they are a devoted, or at least dependent, group.

Certainly the little gang that comes with him to New York in 1973 and 1974, none of whom has done any business here before, fails to impress anyone – in fact, he sends them all back and recruits other, soon-to-be dependent, not exactly top-of-the-class people.

Those who work for him are all, in their way, followers and hangers-on – he is careful to cultivate no partners.

Bert Hardy, an advertising sales executive Murdoch recruited in London in 1972 – and whom Murdoch will fire 11 years later – regards the Murdoch years as the most amazing and satisfying of his career. (This sense of awe or wonder is a theme of Murdoch lieutenants.) Hardy senses early on that Murdoch is different from other businessmen. But what makes him different, what motivates him to be different, remains for Hardy enigmatic.

Hardy cannot say, for instance, why Murdoch, a publisher from Australia and London, in 1973 buys a local newspaper company in San Antonio, Texas, except that it is for sale and he can afford it – which, in fact, are Murdoch’s reasons. And that he has to begin somewhere. (As Hardy will recount years later, the two lieutenants whom Murdoch sent to do the deal initially returned empty-handed because the price had gone up. “I didn’t send you to negotiate; I sent you to buy the paper,” said Murdoch, and sent them back.)

With his odd beachhead in San Antonio, and his plan to start an American tabloid, the National Star, he moves his wife and four children – who, five years before (then with two children), he moved from Sydney to London – to Manhattan, where the Murdochs rent a place on East 72nd Street.

The reputation that will form around Murdoch derives not least of all from the impression that there is something uninvited about him – and his failure to recognize that he’s not welcome, or, conversely, his enjoyment of that fact.

it’s a literary staple, the hustler’s tale: the nobody from somewhere else arriving in a new place and convincing people that he or she is somebody. The characteristics of this kind of person – the charm, the plasticity, the calculated generosity – are suspect ones. He’s likely escaping something, or trying to reinvent himself. That story, most often, has an unfortunate end.

Murdoch in 1974 is only qualitatively different from that hustler. He’s legitimate, but the legitimacy isn’t worth all that much. His company, News Ltd, has a relatively modest value of $44 million (inflation-adjusted, that would be about $200 million in 2008 – not even a midsize publisher). He’s got nothing that would make anyone particularly notice him. He’s starting in New York pretty much from scratch.

He actually seems like someone New Yorkers might easily take advantage of: a wannabe. There are always new wannabes – foreign wannabes are the best – ripe for the picking in New York.

Arriving in New York in the early 1970s, Murdoch – whose papers are in markets where television news is hardly a factor, and are still staffed by working-class reporters – is struck by one overpowering sense of the market: American news is lazy, stultifying, pickle-up-its-ass, boring. This suggests, to a man who has spent 20 years selling news in some of the most competitive news markets in the world, great opportunity.

In this regard, he is both right and wrong. In retrospect, it will be possible to see his years in America as a process of wrestling with what he does not understand about the American news market – a losing fight that, oddly, will make him a winner. It’s partly out of frustration with American newspapers that he will come to build an entertainment empire. It’s partly because he doesn’t doubt himself that he will continue to try to succeed at news, and build Fox News, and bid $60 a share for Dow Jones. The $60 offer will indicate to many observers, however, that he still does not understand the American news market.

By the time Murdoch arrives in the United States he has mastered one business model: single-copy sales. Advertising is a modest adjunct to this greater business strategy. Indeed, at the beginning of his career, Murdoch is kept out of the “quality” media and the “rivers of gold” classified advertising revenue by the dominant Fairfax family. His son Lachlan, in a discussion about his father, will later point out that if Dame Elisabeth [Murdoch’s mother] had not sold the Queensland newspapers, which were the upmarket part of the Keith Murdoch legacy, as opposed to the downmarket Adelaide News, then her son would have begun his career with a quality broadsheet (in Brisbane), rich in classified advertising – and Lachlan’s father might not have ever become a tabloid king.

Murdoch’s only real deviation in Australia from the single-copy tabloid strategy is the Australian, the first national newspaper in Australia, a quality broadsheet that he launched in 1964 – the only newspaper he’ll ever create, as well as the proof positive of his journalistic bona fides that he’ll cite over and over again in the battle for the Journal. The Australian, whose respectability keeps his mother happy, will lose money for nearly 30 years.

It’s the News of the World and the Sun that are his principal models. They are downmarket as an identity, with a precise and calculated form – constantly refined (even if refinement means vulgarization) and sharpened. And they sell like crazy.

It’s media magic, his reconstruction of what he thinks of as the perfect tabloid form. Murdoch himself may be sour about and disaffected with Britain, but Britain embraces his Sun. Its tone is pitch-perfect. It is so spot-on that it effectively revolutionizes the form itself – in modern Britain, the tabloids become the most powerful media, breaking stories, setting the agenda, electing politicians, changing the culture. To question the form means you’re standing on the sidelines. Questioning it, turning up your nose at its cultivated noxiousness, its calculated downmarketness, would make you something like an intellectual arguing against television, or a 1960s parent decrying rock and roll. Successful media is its own justification (a key Murdoch precept). It is not possible to overestimate how much the Sun’s success has transformed even Murdoch’s idea of the tabloid. He feels he has found the secret. What’s more, the Sun, with profit margins as high as 60 or 70 percent, has become the most significant part of his business and will remain so for nearly 20 years. It not only becomes the primary revenue source, supplying the cash flow for his other efforts, but it also gives him his extraordinary power base in the United Kingdom. The Sun becomes one of the key levers to push the transformation of Britain itself. It changes Murdoch too, giving him a sense of just how large his ambitions could be.

The Sun and the News of the World are what he somehow hopes to bring to the United States. The size of this dream is disconcertingly huge – to be able to create a national tabloid with the success and impact of the Sun on a US scale would be massive.

And yet, judging by the incredibly boring newspapers in the United States, it seems almost like a no-brainer.

Such sales as the Sun and the News of the World are having in the United Kingdom are dependent, however, on working class men (ideally with the same interests, i.e., soccer) who buy papers, and newsstands where they can buy them.

The absence of those key factors in the US market is an indication of how little Murdoch knows – and how hard it is to dissuade him from going forward when he wants something. Part of the reason he sends his early UK coterie in America packing back to London is that each of them perceives, in the face of his stubborn enthusiasm, that the US market is inhospitable to the British tabloid model.

In a car culture, in the great rolling suburbs, the only place the middle class gets to truly eyeball the cover of a periodical is in the supermarket. And all the middle class people doing this eyeballing are women.

The Murdoch formula – his tabloid magic, his working class insouciance, his badgering and bullying – is for men. The aggressiveness, the girls, the sports, the jokiness, the news – all for men.

Supermarkets in America do not really sell newspapers. Supermarkets sell magazines. And tabloids, aka “the tabs.” In the 1970s, an American tab is a magazine/newspaper hybrid – it fits into a supermarket checkout rack – that merges two publishing genres: the fanzine (with slavish attention to celebrities) and the fantastical (accounts of aliens and grotesque and deviants with only the barest pretense of being factual). The National Enquirer – MOM BOILED HER BABY AND ATE HER! – which sells four million copies a week and is published by the Pope family, with its supposed organized-crime connections (Mafia boss Fran Costello is rumored to have put up the money for it), is the height of the form.

Murdoch’s idea of a tabloid as a media property that could become a powerful working-class institution comes face-to-face with the American reality that a tabloid is a product that defines not only its reader’s lack of standing but that of its owners. This is confounding and frustrating to him – and, significantly, an entirely different business and cultural climate from any he’s ever been in. He has no background in soft celebrity gossip targeted at women.

It’s important to keep in mind how pre-modern Murdoch is. He’s a 1950s guy. A guy’s guy. From an era when guys talked about guy stuff.

But now comes the stubbornness and the relentlessness and the conviction that he can do whatever it takes. That, going forward, is the important thing. You set something in motion and then you try to control it. Doing it is what defines you.

In 1974, he launches the National Star. This is his American tabloid – not at all what he had in mind, but, nevertheless, he is playing it as it lays. Because although this is not the kind of paper he wants to be publishing, it does have another virtue that moves him: single-copy sales.

In this instance, the money overrides his ego. It doesn’t really bother him that the Star is further poisoning his already problematic reputation. He’s not only a British tabloid publisher, which is one thing, but he’s now the proprietor of the lowest form of media in America. You can’t go further down than this. The publisher of a supermarket tabloid doesn’t get to eat out in Manhattan with the other parents at Brearley and Dalton.

Still, say what you want, one fine morning in August 1977 Elvis Presley dies. Steve Dunleavy had just published a book about Elvis – it’s the King as a drug-taking debaucher well on his way to death. Murdoch scoops up the US rights, and after the first installment of the serialization of the book, the Star’s circulation jumps from two to three million. The Star will serialize the rest of Dunleavy’s Elvis book 20 more times, and at four million copies reach an equal footing with the Enquirer. (Murdoch will sell the Star for $400 million in 1990 to the Enquirer’s parent company.)

But never mind the Star. It will be the New York Post – acquired almost three years after he launches the Star – that will truly demonstrate his belief in the potential of the tabloid in America.

The oldest paper in the city is, virtually overnight, transformed into a British tabloid – a species of newspaper that New York has not seen in two generations and which, over the next 30 years, will only ever lose money.

It is almost impossible to exaggerate how determined and how wrongheaded Murdoch is with the New York Post. It is another one of those things that shadow his reputation: No matter how wrong he is, he won’t give up. That’s scary. In this regard, he’s beyond all reason. It is a grand and stubborn obsession.

His is a classic and anachronistic newspaper business plan: with boldness, sassiness, sexiness and wild promotions, he’ll make big gains against the dominant paper. Because the tabloid style of journalism requires a much smaller investment than the starchy, information-heavy papers, it ought to be a no-lose formula.

Except he loses. Each of his American tabloids, save the Post, is a kind of listless version of a true Murdoch paper. Stories are short; there are more pictures, there is more crime coverage (murder and rape), but there isn’t the tabloid joie de vivre. He is betwixt and between – and disengaged. American newspapers aren’t any fun. Also, they don’t make money.

At least he understands the basic issue: Advertisers want to reach an aspirational middle class and such a middle class reads a paper above its station. “Everybody in this country wants to get ahead, get a piece of the action,” he will tell biographer William Shawcross. “That’s the fundamental difference between the Old World and the New World. There’s not the self-improvement ethic in England that there is in this country.”

And yet, even with this unprepossessing American experience, he remains committed to the tabloid model, unable really to see beyond it, believing that the visceral impact of tabloidism has to prevail – and, indeed, it finally will, on the Fox network and on Fox News.

There is one other not insignificant point in the tension between Murdoch’s tabloidism and other more elite, if you will, kinds of journalism: how much does he realize, or accept, the difference?

The Australian, his respectable, mostly money-losing 1964 start-up – it would eventually make a slight profit – is thought by many to be the best paper in Australia. But in lots of ways it has been a dogged act of good behavior, churchgoing rectitude – a kind of philanthropy. His stated mission, from the beginning, was to create a paper that his father would have been proud of. Then, along the way, it turned into something to deflect his mother’s disapproval. Along the way too, it has clearly become a personal point of pride – and part of the proof offered to the Dow Jones shareholders that he can, indeed, do “serious” journalism. But it is a calculated anomaly – and not a model that he has chosen to repeat.

The Times of London is the other example of Murdoch on a higher plane. The Times is usually crisp and straightforward – without affect, and without much personality. It’s utilitarian. What he seems to have no feeling for, or a resistance to, is a high-end sensibility – the conceits, the snobberies, the look and feel, and the attention to detail that help create a more articulated, nuanced and exclusive voice.

But perhaps the best example of his stubborn resistance to a select sensibility, to the upper middle brow, was his plan, in 1994, to have his Fox network create a show that would compete with 60 Minutes, CBS’s enduring, hoary, high-end Sunday news show. The idea here was not just to try to steal a piece of a lucrative market – 60 Minutes had one of the highest advertising rates in television – but to help raise the cachet of the Fox network … The show died, after nearly a year of preparation, under the weight of the genre mix-up – which had the additional virtue of helping him see that he ought not to try to play on the high end but to continue to pit himself directly against it ...

Norm pearlstine and John Huey, both former WSJ editors now the two top editors at Time Inc, call on Murdoch to get support for Time’s fight with the Justice Department in the Valerie Plame case over a journalist’s right to keep sources confidential. They too know about Murdoch’s longtime interest in Dow Jones and about offering Murdoch gossip to curry his favor, and during their conversation – which Murdoch will later claim not to remember – they point out that the Bancroft trustee at the Boston law firm Hemenway and Barnes, Roy Hammer, has once again repeated, in a current Fortune article, that Dow Jones is not for sale – at least not, Hammer quips to Fortune, for less than $60 a share.  [The Bancroft family owned the controlling stake of Dow Jones.]

Pearlstine, who has mentioned this as well to the Washington Post Company’s CEO, Donald Graham, who dismissed the figure out of hand, will recall later, “Rupert’s eyes sort of lit up, and he said, ‘Huh, $60 a share.’ He started trying to figure out how to get there almost as we were sitting there. Whereas Don Graham is a prudent man who would say that was an absurd price for Dow Jones, Rupert was trying to figure out how he could do it.”
The Wall Street Journal, along with the New York Times, the big-three networks, and CNN, are the things he could never buy – establishment things, elite things. Indeed, at one time or another he has tried to buy every national news company in the country – and been rebuffed. (Hence, he started his own network and his own 24-hour cable news channel.)

When [News Corp president] Peter Chernin first gets wind in the spring of 2005 that Dow Jones is once again an idea in Murdoch’s head, his reaction – beyond that Dow Jones is not available, not a chance – is “Why in hell?” What possible advantage would Dow Jones offer News Corp? As Chernin sees it, everything from a corporate point of view that might be accomplished with the acquisition of Dow Jones has already been accomplished, in spades, ages ago.

This has been the premise of News Corp, which has become the premise of all other big media companies: By acquiring a famous media brand, you take over its cachet and standing – as well as its cash flow. The New York Post, New York magazine, the Village Voice, the Times of London, Harper and Row, TV Guide, Twentieth Century Fox – these are the brands that put Murdoch on the map.

Except now the Murdoch brand is bigger than all of them. Bigger, certainly, than Dow Jones and the Wall Street Journal. And certainly News Corp would get no advantage from Dow Jones’ pitiful cash flow.

From any prudent, standardized business-practices view – and the media business, once a business of audacious and often ridiculous moves, is becoming nothing if not standardized – trying to take over Dow Jones is illogical.

Not to mention the potential PR disaster. In the standardized playbook of modern corporations, the idea is to avoid controversy. Truly, there might not be any greater desire at the highest reaches of corporate life than to avoid bad press. Bad press kills. It hammers your share price, it rattles your board, it undermines you with your friends and family, it discourages your customers, it challenges your vanity, and eventually it gets you fired. For any executive, how the media might respond is a major strategic calculation. Beyond containable levels, if the press is going to be bad, you just don’t do it.

Chernin has enough trouble dealing with Fox News. The last thing he needs is endless stories – and this is how it would play – of tawdry, dubious Fox News taking over the respected and unimpeachable Wall Street Journal.

Even more to the point, for Chernin the Wall Street Journal, however iconic, is the newspaper business – that dying animal. (Murdoch not only mocks Chernin for not reading newspapers, but points out that Chernin can’t get his college-age children to read a paper: “They won’t even read one. They refuse. He keeps sending out subscriptions for the New York Times to college and they won’t even open them.”) The company’s newspapers in London and Australia, once great cash contributors to the company, are now, like newspapers everywhere, fading enterprises. They aren’t the company’s future. They aren’t anybody’s future. They’re just Murdoch family lore.

Anyway, Murdoch is always buying Mars – at least until some other more distracting planet comes along, and then he’ll be buying that. It is Chernin’s job to help dissuade, distract, and keep the focus on the real business at hand, which is entertainment, not news. And while he knows that Murdoch has told his people to start a book on Dow Jones, collecting all the public data about the company’s performance, Chernin isn’t worried. Murdoch has been ordering up that book for the past twelve years. They call it the Olympic book because it gets forgotten about and then dusted off every few years. Dow Jones – Chernin knows, everybody knows – is not for sale, and, famously, does not want to be sold. Not now. Not ever.