Murdoch's World (3 page)

Whatever their relative skills, each man—and the overwhelming majority of senior Murdoch executives are men—also serves as a talisman from home. And the history of News Ltd (as Murdoch's holdings were known there) in Australia is instructive about the company's instincts in situations when it becomes dominant and its reflexes when challenged.

“The story of our company is the stuff of legend: from a small newspaper in Adelaide to a global corporation based in New York, with a market capitalization of about $44 billion,” Murdoch told shareholders in October 2011.

Australians demur.
“Adelaide is irrelevant,” said Graeme Samuel, the former chairman of Australian Competition and Consumer Commission, the powerful agency that regulates antitrust and media issues. I met Samuel in Murdoch's true hometown of Melbourne, a city famed for hosting the Australian Open tennis tournament, trolley cars, and street buskers playing the didgeridoo, an Aboriginal instrument.

Melbourne is Australia's second-largest city, a melting pot on the country's southeastern coast. Samuel, currently a corporate investment consultant whose office enjoys a commanding view from thirty floors up, pointed out the many beneficiaries of the Murdochs' enormous enterprises along the sinuous Yarra River.

An infant born in Melbourne could be delivered at the Royal Children's Hospital, underwritten in part by the largesse of Rupert's mother, Dame Elisabeth Murdoch; the birth announcement, of course, could appear in his tabloid
Herald Sun
, whose predecessor papers were run by Murdoch's father, Sir Keith. The child could learn to read
from books published by HarperCollins Australia, another News Corp offshoot; attend music and art classes at institutions subsidized by the family foundation; enroll at a high school named for Dame Elisabeth; amble with dates at the botanical gardens; attend shows at the major theater downtown; have a marriage notice published in the
Herald Sun;
work for one of the foundations sponsored by various Murdochs; buy tickets to movies from Fox Studios; down a pint at a pub while watching Australian rules football on Sky Sports; vote for politicians cast in favorable light by the company's papers; receive care at various hospitals underwritten by the family's contributions; and be commemorated at death, once more, in the pages of the
Herald Sun
.

Murdoch's grandfather Patrick was a Scottish clergyman who became influential after being posted to Melbourne. Rupert's father, Keith Arthur Murdoch, lived in the quarters at the back of the red brick church as a child.

Stephen Mayne, formerly an editor at Murdoch's two biggest Australian tabloids, the Melbourne
Herald Sun
and the Sydney
Daily Telegraph
, gave me an extended tour of Melbourne Murdochiana. He took me to Trinity Presbyterian Church on the corner of Riversdale Road and Waterloo Street in Toorak, a prosperous suburb a few miles southeast of Melbourne. “There was discussion at the time that [Keith] may pursue a religious career as well,” Mayne said, “and he said no—journalism was his thing.” As a teen, Keith Murdoch obtained a cadetship, or apprentice reporter's job, writing about suburban news for the
Age
, a prestigious Melbourne newspaper.

As a reporter during World War I, Keith Murdoch witnessed the doomed Allied assaults on Gallipoli and wrote an impassioned letter to the Australian prime minister denouncing the willingness of British commanders to endanger Australian soldiers. Decades later, Rupert Murdoch acknowledged to his biographer William Shawcross that
much of what his father had written didn't stand up to scrutiny. Despite what
the letter said about British commanders recklessly costing the lives of Aussies and Kiwis, British troops had also been in peril.

No matter. The letter made Keith Murdoch a hero to Australians. He had stood up to power. He rose to be top editor of the Melbourne
Herald
and a top executive of his employer's growing corporation. To make the profile complete, he needed only to establish a family. He had seen a picture of Elisabeth Greene in a magazine and, after inquiring, arranged to meet her at a Red Cross benefit dance. A swift courtship led to a quick wedding. Keith Murdoch was in his forties and much older than his wife—by twenty-four years. The knighted Sir Keith prospered and brought up their children in great comfort. The Murdochs lived in a mansion in Toorak and bought a cottage outside the city. They named the accompanying estate Cruden Farm, an echo of Patrick Murdoch's Scotland.

Rupert had a tough time at boarding school and never excelled at sports. He took an interest in the newspaper business, apprenticing in London for some of Keith Murdoch's friends there.
The son adopted radical leftist politics at Oxford University, giving pride of place to a bust of Vladimir Lenin. On campus, he won election as
publicity manager of the
Cherwell
, an independent student paper. Off campus, Murdoch absorbed the way the owners conducted themselves. London was already home to long-form newspapers filled with sober accounts and tabloids offering splashy and salacious headlines. Press barons could indeed become peers of the realm: Lord Northcliffe, Lord Rothermere, and Lord Beaverbrook actively and even bruisingly participated in the nation's political life and expected their beliefs to be reflected in their papers.

Sir Keith died in 1952, and twenty-one-year-old Rupert rushed home. The Toorak property was sold to pay off Keith Murdoch's outstanding debts and the taxes due on his estate. True, his mother, Dame Elisabeth, owned Cruden Farm outright. But the son was angered that his father was not able to bequeath greater media holdings. Keith
Murdoch had obtained a personal stake in papers owned by the Herald & Weekly Times Co. in Brisbane and several other properties, including the Adelaide
News
. Yet just before Keith died, former colleagues had reversed several of his maneuvers, depleting his fortune.

Rupert Murdoch went back to Oxford that year to finish his degree in philosophy, politics, and economics at Worcester College. Yet memory of that grievance helped to spur the son's return home and his ambition to expand his holdings beyond Adelaide, a city in which he had no emotional investment beyond newspapers, beyond news. He acquired major newspapers in every Australian state, often leveraging his properties to finance debts for succeeding acquisitions. Murdoch bought TV stations, acquired the rights to broadcast shows from the American ABC-TV network, and established the country's first truly national daily, the
Australian
.

These extraordinary moves, which often anticipated Australians' appetite for news and entertainment, seemed self-evident to Murdoch.
“I don't know of any son of any prominent media family who hasn't wanted to follow in the footsteps of his forbears,” Murdoch said in 2001. “It's just too good a life.” And he hoped to create something for one of his own children.
He married young and had a daughter, Prudence, by his first wife, a former airline attendant named Patricia Booker. They divorced in 1967, the same year he married an aspiring young reporter named Anna Torv, with whom Rupert had Elisabeth, Lachlan, and James.

It took three-and-a-half decades for Murdoch to acquire the company that his father had once run. Stephen Mayne, my guide around Melbourne, had been a successful business editor there at Murdoch's
Herald Sun
and held the same job at its sister paper in Sydney, the tabloid
Daily Telegraph
, by far the country's largest-circulation paper. He was later promoted to be chief of staff for the
Telegraph
. By Mayne's account, he wasn't up to the task of leading the newsroom in Sydney, a sprawling center of power, finance, and pop culture in which he had few nonbusiness contacts and no real roots.

Over time, Mayne became a leading Australian critic of Murdoch and News Corp. He sees present-day parallels between Rupert's arrangements and Sir Keith's efforts to win ownership of several titles while serving as a top executive at the publicly traded company he ran. “We've seen similar questions asked around the way Rupert Murdoch has run News Corp with his own family interests first versus the public shareholder interest,” Mayne said: the sons installed as top executives; the daughter's film production company acquired for more than $670 billion.

In public, Murdoch defined a clear barometer by which he would judge himself: “The thrill of success is in how many people you get to watch your television programs—how many people you get to buy your newspapers. And if you're doing that well, the rest looks after itself,” he once said. Dame Elisabeth subtly rebuked her son's view. “It's very satisfactory if you do very well and are so-called—this dreadful word—‘rich.'” She would not allow Rupert to set the terms by which he could measure himself. Philanthropy was her pursuit but not in any major way her son's.

Politicians from both major Australian parties have granted Murdoch's company key concessions. In 1985
News Corp was granted waterfront property on Sydney Showground for its movie studio in exchange for a paltry figure by the federal government and the state of New South Wales. A state auditor later established that the deal may have benefited News Corp by more than $100 million. In 1995 News Ltd went into business with the state communications corporation Telstra and another private firm to create FoxTel, the country's leading pay-TV service. News Corp held a 25 percent stake but had full rights to control the management and direction of the company. Such deals showed how the corporation often operated.

Tony Blair flew to Hayman Island, on the Great Barrier Reef, to address News Corp's editors and directors in July 1995 after becoming leader of the British Labour Party. Murdoch took the visit as
a signal of seriousness, which it was. Australian prime minister Paul Keating gave Blair some advice:
“He's a big, bad bastard, and the only way you can deal with him is to make sure he thinks you can be a big, bad bastard too. You can do deals with him without ever saying a deal is done, but the only thing he cares about is his business. And the only language he respects is strength.”

Murdoch started acquiring British media outlets in the late 1960s and then expanded into the US, ultimately becoming an American citizen to satisfy requirements of US television regulators. By 2004, he pulled News Corp from Australian exchanges and listed it in New York. By then the transformation from regional media executive to worldwide powerhouse was complete.
“I don't want to pretend this is a guy who went from rags to riches, but he was gifted one newspaper in Adelaide, which is one of the smallest cities in this country,” said Andrew Jaspan, former editor of Fairfax Media's Melbourne
Age
, who previously worked in senior positions for two Murdoch papers in the UK. “So he's perceived as a real success story—a guy who started with one paper and built a global empire. From that perspective, he's seen as a bit of a hero.”

News Corp does not always achieve what it wants, even in Australia. Its cable TV division failed to win exclusive rights to broadcast rugby and Australian football. But it has always been prominent in the mix of broadcasters. And journalists say his national newspaper the
Australian
exacts a toll on those who oppose Murdoch's interests.

In summer 2011, when scandal overwhelmed its British sister company, executives for News Ltd in Australia scrambled to contain the damage. On July 14,
John Hartigan, then CEO and chairman of News Ltd, was asked by the Australian Broadcasting Corp's Leigh Sales if Murdoch's newspapers had bullied politicians there, as she said they had in Britain.

Hartigan said that his journalists hold politicians accountable. “I don't believe that we ever overstep,” Hartigan replied. “Yes, it's a
love-hate relationship, and sometimes it's loving, and sometimes it's very hateful, but I don't think, generally speaking, that we exceed our authority.”

Though Australians often feel slighted by his long absences, Murdoch still casts a long shadow there, as he proved when
he informed Hartigan it was time to step down a few months later. The unit's print revenues were sagging. The Labor government had launched formal reviews of media behavior and ownership. Rupert Murdoch reclaimed the title of chairman for himself. The king had returned.

AUSTRALIA SERVES as an important test case of what happens when a strong media figure becomes an inescapable one. Step up to any newsstand in Australia, as I did in Melbourne's central business district, and ask about Rupert Murdoch, and you'll get an appraisal like this one from Tom Baxter, an officer with a local disability foundation:
“Long time in newspapers, ruthless; dedicated to [his] craft; a global citizen.”