The Man Who Owns the News (49 page)

Murdoch has been watching the
Times
’ strange behavior and spastic reactions with as much interest and appetite as he has for anything in the media business. The
Times
is his favorite train wreck—as well as, perhaps, his ultimate opportunity.

The
Times
’ own insecurity about itself encourages Murdoch’s own tenacity in pursuing the
Journal
—and, through it, the
Times
. Murdoch, as it happens, is no small cause of this insecurity. The rattled, humiliated, second-guessing
Times
has become a leitmotif at the Fox News Channel. Fox News has helped turn the
Times
into a caricature, a joke.

There may be something more that bothers Murdoch about Sulzberger. While he tends to associate the boyish Arthur (even though he is, at fifty-five, far from a boy) with his own children—taking great satisfaction in this comparison—Arthur in fact resembles Rupert himself. Like Murdoch, Arthur has been desperate to emerge from the shadow of his father; he is determined to speak his mind (at any cost); he is determined to be in personal control; and he is desperate to be larger than he is—to be bigger than fate has made him. Arthur is the cautionary tale—what Rupert himself, with just a slight alteration in tone and mettle, might have become.

Indeed, the Murdoch family’s control over News Corp.—with its voting and nonvoting shares—apes the Sulzbergers’ corporate model. Arthur—attention-seeking, immature, verbally out of control—is a vivid example of what can happen with such no-recourse governance. That worries Murdoch.

Oddly, it is Arthur himself who has most consistently, and, to Murdoch, pathetically, articulated the fragility of the
Times
—its being-and-nothingness struggle in the changing media world. Arthur seems to want something more than the
Times,
wants to make it into some new information age contrivance. It isn’t a newspaper, it’s an information brand, blah blah.

There is a sense, actually, in which Arthur seems to see himself as a would-be Murdoch—which, even in Murdoch’s eyes, makes him all the less dignified and credible.

Arthur wants to be some New Age media mogul; Rupert wants to be a newspaper proprietor.

FOX NEWS

In its panic about Murdoch, the
Times
is quite possibly missing the larger story about him. The epochal tale may not be, as he pursues the
Journal,
about Murdoch’s bullying, but about his growing squeamishness about bullying. The
Times
is continuing to champion the case that Murdoch is a corrupter of journalism, just as Murdoch is trying to make himself, relatively speaking, its upholder. Indeed, Murdoch may be the last guy to believe that he can actually make it as a respectable journalist—whereas at the
Times
more and more people are doubting that respectable journalism is a viable profession.

Murdoch’s dream of the
Wall Street Journal
and of supplanting the
Times
as the nation’s blue-chip news organization is not so much (or not merely) about the
Times
as it is about Roger Ailes. Murdoch may be pursuing the
Wall Street Journal
to deal with Fox News.

Everybody else’s Fox News problem, is, as it happens, his too.

Ailes is Murdoch’s profoundly mixed message—one that he sometimes despairs of making any sense of.

He might be television’s deftest practitioner, but Ailes is also its strangest. Using the lessons he learned as a political operative for Nixon and Reagan, his basic tactical philosophy continues to be about how to devastate or at least neutralize his opponents. Arguably, this is exactly what enlivens his network. Personally, he is a man of overriding obsessions, including his belief that he has been earmarked by Arab terrorists, which costs News Corp. a considerable premium for his 24/7 security apparatus. Delivering Ailes to work, his driver and bodyguard call from the SUV so that a second security team can fan out on the plaza in front of the News Corp. headquarters for Ailes’ arrival. (This too, this paranoia—even a sense of approaching Armageddon—has arguably turned out to be a programming plus.)

Ailes, no matter how strange he may be, has created one of Murdoch’s greatest successes. In the end, so much of News Corp. is just not very memorable. It is a company that has refined the profit margins on the third-rate. But Fox News is original. It has taken the News Corp. formula of the on-the-cheap and the third-rate and turned it into a culture-changing, paradigm-altering, often jaw-dropping spectacle. About this, Murdoch is proud.

Ailes is Murdoch’s monster—but a very profitable one. If media success is its own justification—the essential principle Murdoch’s own career has been built upon—then Ailes is not only justifiable but untouchable.

He is the one person within News Corp. whom Murdoch will not cross.

And this is not because he’s blind to what Ailes is doing, or to what Fox News is. In steady, constantly discomfiting ways, Murdoch shares the feelings about Fox News regularly reflected in the general liberal apoplexy. Everybody outside Fox News and inside News Corp. suffers Fox News. Everybody outside Fox News and inside News Corp. is afraid of Roger Ailes. Further, everybody outside Fox News and inside News Corp. thinks that there’s a bit of
insanity
at Fox News. Murdoch, Chernin, and Ginsberg are routinely—as often as every day—peppered with complaints by friends, family, business associates, and people of great influence about Fox, and none of them can do anything. It is some bizarre testament, really, to editorial freedom. It is uncontrollable.

Even within Fox News, under Ailes, there are people who have become so powerful that they can’t be controlled. It is not just Murdoch (and everybody else at News Corp.’s highest levels) who absolutely despises Bill O’Reilly, the bullying, mean-spirited, and hugely successful evening commentator, but Ailes himself who loathes him. Success, however, has cemented everyone to each other. Within Fox News, the two PR executives Brian Lewis and Irena Briganti—famous through the media business for the violence with which they attack anybody who attacks Fox News—are themselves feared by everybody else, even the most senior people at Fox and at News Corp. Lewis is one of the few people who scares Ailes because he has notes of many conversations that should never have occurred.

Murdoch—and this is not a point lost on Ailes—has come to occupy two opposing worlds. There’s the world to which he has largely been introduced by Wendi; if this world has any one guiding cultural agreement, it’s stark antipathy to Fox News. And then there’s the world in which his most significant brand association is with Fox News.

What’s more, the wind is changing. Democrats, who in 2006 took both houses of Congress, have started to refuse to appear on Fox. As the
Journal
battle is getting under way, so is the presidential primary season—the most closely watched in history. The Democratic candidates in March 2007 all refuse to participate in a Fox-sponsored debate because of a joke made by Ailes to a group of radio and television producers: “It is true that Barack Obama is on the move. I don’t know if it’s true that President Bush called Musharraf and said: ‘Why can’t we catch this guy?’” Indeed, at the same time that Ailes and Fox are pretty steadily portraying Barack Obama as a possible Muslim terrorist, Wendi Murdoch is having dinner with him.

Even Murdoch’s desire—a long-held one—to launch a business news network has been frustrated by Ailes’ own agenda.

He needs Ailes to take charge of the business news channel because he believes that nobody else is as good at cable television as Ailes. But Ailes has been vastly ambivalent about, even resistant to, doing it. There is the elevation of Ailes within News Corp., as part of his negotiation, into the office of the chairman with all the other top News Corp. administration executives. He even got Lachlan Murdoch’s office on the eighth floor as soon as he left the company.

It should not be underestimated how much Murdoch does not want himself or News Corp., in his or its legacy, forever yoked to Ailes and Fox News. It is not just that he wants respectability—that is some of it, but perhaps the least of it—but that he doesn’t want to give up authorship.

Ailes and Fox News have, unexpectedly and disproportionately, come to be the voice and identity of News Corp. Clearly, the way to balance it, to reassert Murdoch’s own primacy as the grand designer, as the maker, is to buy something else that outweighs what he wants to diminish.

Hence the
Wall Street Journal
. That, as a point of identification for News Corp., will rival Fox News.

And Robert Thomson. Thomson is the new Ailes. He’s the new Murdoch alter ego. He’s the new instrument through which Murdoch is going to make his mark.

And the
New York Times
—either to supplant it or buy it.

THE
POST

If Ailes is going to be diminished in the balance here, so might Murdoch’s beloved
New York Post
. The
Post
is sidelined during the
Journal
pursuit. In some sense, virtually silenced. There is something like an eerie quiet. And, too, there is the growing question about what the value of the
Post
will be to Murdoch if he has the
Wall Street Journal
.

This is the most confounding part. Of all the businesses and past lives that Murdoch has jettisoned, it seems that, suddenly, he might be getting ready to shed his most elemental identity: his tabloid soul.

EARLY JULY 2007: THE DUE DILLY

The collapse of the newspaper business, which is having devastating consequences for every other proprietor, is in fact turning out to be great for Murdoch. It is giving him the opportunity to buy a blue-chip news organization that would never before have considered selling to him.

The logic here is clear to him, if not to anyone else. Indeed, there is a strange disconnect among the economic views in play. There is Murdoch trying to pay as much as he can possibly pay. There are the people at the
Journal
hoping that he will find out how little they’re worth. And there is Wall Street, which, oddly, is thinking he’s buying something entirely different from what he is so obviously buying.

News Corp.’s due diligence at Dow Jones begins in the first week of July. Now, News Corp. could well get into its due diligence and find enough of a deteriorating situation to knock back on the offer, not even losing much face at all—this is part of the art of the deal. Factions at News Corp. are counting on such a cold view to give them the leverage to save a few bucks a share. Likewise, factions at Dow Jones and in the Bancroft family are hoping for just this reaction—that Murdoch, the unsentimental business guy, won’t want the
real
Dow Jones, as opposed to the storied myth of Dow Jones, when he gets to see it up close.

But the truth is that News Corp.’s Dow Jones due dilly is not meant as a real measure of the company’s value, or even as a reasonable reality check. It is not meant to challenge the assumptions that News Corp. has already made. It is just a point of procedural follow-through, or even benign curiosity. Beyond some slight worry about pending lawsuits (nothing, it turns out, to worry about), News Corp.’s primary point of interest is about how easy or how complicated it will be to convert the existing presses to full color (fairly complicated). The basic business of Dow Jones isn’t the issue.

What Murdoch is buying, his idea of value, cannot, finally, be explained to anyone else. It has to be taken on faith.

To buy something that you have always wanted but could never buy before (like his father’s old company) has special value. If you can buy it and then it helps you conquer something else that stands in your way—well, a further premium. If you can buy it and it throws other people off balance, messes with their power base (e.g., Ailes and Chernin), well, the deal just gets better and better.

FOURTEEN
Dynasty

Toward the end of June 2007, Rupert and Wendi get away. Jamie Packer, the son of his historic Australian rival, Kerry Packer—Jamie has become Lachlan’s best mate—is getting married in the south of France. It’s a $6 million part-Scientology wedding at the Hôtel de Ville in Antibes. Rupert and Wendi anchor their yacht,
Rosehearty,
not far from Lachlan and his wife Sarah’s yacht,
Graziella
. All the Aussie men—and Tom Cruise—in town for the big event spend the night before the wedding slamming down tequila shots at Paloma Beach.

Rupert and Lachlan discuss Jamie Packer’s recent announcement—eighteen months after the death of his father—that he’s decided to sell off the last vestiges of his father’s media empire and put more money into the much more profitable casino and gaming business. On one hand, this is an intimation of the kind of transformation that might—or even inevitably will—happen to the Murdochs’ business. Certainly, it becomes harder and harder to imagine News Corp. as forever being a newspaper-based company. On the other hand, in a development that will be unsettling to Murdoch for exactly the opposite reason, Lachlan fails to tell his father that he’s thinking of buying parts of the Packer media business—which could mean he might someday be a News Corp. competitor (indeed, Lachlan’s non-compete agreement with News Corp., which came with his generous payout when he resigned from the company in 2005, is just ending).