The Man Who Owns the News (32 page)

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. For this exercise in high-end programming, he personally chose as the co-anchors former
Sunday Times
editor Andrew Neil and…Judith Regan.

This colossal or farcical disconnect—the angry and foulmouthed diva moderating a new show for the high-minded—might suggest that he really doesn’t get the aesthetic fine points. Or, even more tellingly, that he suspected that the high-end audience really wants, given its druthers, an in-your-face option.

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.

MAY
23, 2007

Murdoch ultimately sees the distinction between what he does and what the elites of journalism do as not so much about journalism as about turf. The elites, so-called, have a good thing going, a monopoly of their own, and they don’t want to let him in. So the way to keep him out is to say he doesn’t have the stuff, doesn’t know how to do the job, will ruin the neighborhood.

He isn’t admitting to anybody that the whole mess with Richard Johnson and “Page Six” is just adding fuel to the fire—he is made of sterner stuff than that; he doesn’t cut and run—but the truth is, he’s pretty sick about it. The Bancrofts know nothing about him; he suspects that none of them has even ever read the
Post
. But he is sure they all know now about whatever it is that Jared Paul Stern and Ian Spiegelman are saying. And, indeed, if any of the Bancrofts have any contact with people at Dow Jones—and anyone at the
Journal
who has the wherewithal to reach out to the Bancrofts is doing so—they are now getting the “Page Six” story (and all the other stories about the “Page Six” story) e-mailed to them.

Before this, the Bancrofts may only have assumed Murdoch is some helluva piece of work, but now they have proof. You can’t get slimier than “Page Six” you can’t find someone who runs a slimier organization than Rupert Murdoch.

Indeed, family members will report that Pulitzer Prize–winning reporter James Bandler turned up at their house to lobby them to say no to Murdoch. Bandler accidentally left a “pitch book”—outlining Murdoch’s sliminess and all the reasons why the Bancrofts shouldn’t sell—on the lawn of one of the family members’ homes.

Murdoch begins to feel the momentum recede—he really might not get Dow Jones.

What he does not know is that Lisa Steele has been moving away from her emphasis on liberal morality and focusing on, well, business.

Steele, fifty-eight, a liberal New England aristocrat (in 1996,
Forbes
named her mother, Jane Bancroft Cook, as the wealthiest woman in Massachusetts) living outside of Burlington, Vermont (an alternative-lifestyle capital), and running a “sustainable and socially conscious redevelopment company,” is the Bancroft family member who, by nature, is most repelled by the very idea of Murdoch.

It is her family—the Cook branch—that has been most unwavering in its belief in Dow Jones. While others sold down as much of their shares as possible, she and her sisters held.

On May 14, there was a conference call that Mike Elefante had set up involving him, the three family board members, and Michael Costa from Merrill. It was to be a run-through on Costa’s part for the presentation he was going to give to the whole family on the twenty-third. The mood before the call was of a relative level of superiority. If they were in a certain maelstrom, they were getting used to it—whatever the pressures, the decision was theirs, the family’s, to make when they made it, after the facts were in. Even Michael Elefante—more impatient than he knew he should be with the more difficult family members—still felt this would be a long process of weighing many factors before arriving at a considered decision.

But it was Mike Costa—affable, reassuring, without airs, not someone you’d expect to say anything profound—who changed the mood. Costa’s main point was that the combination of Thomson and Reuters removed the two bidders who might—just might—have reached Murdoch’s $60 range. And, in Costa’s estimation, that left nobody else.

What’s more, Costa felt—and Merrill was working the numbers—that Thomson-Reuters materially changed the business environment for an independent Dow Jones. There followed, then, a bit of discussion about Murdoch’s letter—these so-called editorial protections he was bringing up.

Two days later, Steele, along with Chris Bancroft, Leslie Hill, and Elefante teleconferenced into the Dow Jones board meeting where Clare Hart, who ran the newswires and digital business, spoke. Hart’s presentation too was unexpectedly grim. Thomson-Reuters had turned everything upside down. The entire basis of Dow Jones’ profitability was, in essence, compromised. Its business would be under relentless competitive pressures.

Throughout the next week, Elefante and Steele end up speaking frequently with each other. Elefante knew where Steele (and, in turn, her sisters Martha Robes and Jean Stevenson) was going.

At the same time, Steele was having mournful conversations with Peter Kann. He was certainly against selling, but he understood, or said he did. They go back too long for him not to. The sense of a shift in Steele’s views make them all talk about the editorial-protections stuff—it was something for Steele to hold on to. Kann demurred about what he thought Murdoch’s word might be worth.

Everybody’s at the Bostonian Hotel for the family meeting on the twenty-third (except for Chris Bancroft and Bill Cox Jr., who says he’s fed up with these people). The atmosphere is tense—although the overriding sense is that the family still remains opposed to Murdoch, there’s a feeling of deeply divided agendas, of loyalists and of potential betrayers of the family trust. They’re all asked to sign confidentiality agreements. (Indeed, Leslie Hill accuses Billy Cox of being the source of leaks from their meetings—most of all to the
Journal
itself.) Mike Costa is there. So is Josh Cammaker from Wachtell, Lipton.

Elefante opens the meeting with a five-minute talk in which he says he’s changed his position: Even if he doesn’t personally want the company to lose its independence, it’s time to explore a sale, if not to Murdoch, then to somebody. With the Reuters-Thomson deal, that’s the only reasonable fiduciary view. Lisa Steele also reverses her position: Her branch of the family simply lacks the “appetite for risk” that an independent Dow Jones would require. And, especially, if it is possible to sell the company but ensure some measure of protection for the editorial integrity, well, then that’s what they ought to be thinking about.

Cammaker is delegated to draft a statement about the family’s current wishes. Still, nobody calls or writes Murdoch—who is nearly beside himself with worry and a sense of lost opportunity, and even belated fury at “Page Six” and Richard Johnson and Col Allan.

The next day, the
Journal
goes with this: “An influential member of the family that controls Dow Jones & Co. said he opposes selling the company to Rupert Murdoch’s News Corp. for fear such a step would endanger the
Wall Street Journal
’s independence. ‘Why would I risk that?’ said Christopher Bancroft, who also is a Dow Jones director, in his first public comments about News Corp.’s $5 billion bid. ‘I’m open to any situation that benefits the
Wall Street Journal
and Dow Jones and its shareholders. At the moment, I don’t see anything that would do that.’”

Murdoch’s worry about the deal and his irritation with his tabloid reporters’ inability to keep their noses clean will result, for the first time in News Corp.’s history, in the implementation of an ethics test for his reporters (granted, if you don’t pass it, you just keep taking it until you do), and the very counterintuitive practice of gossip reporters signing confidentiality agreements about their work as gossip reporters.

NINE
Who’s the Boss?

A key reason the
Wall Street Journal
has achieved such lofty standing is that it has not really had any active input, much less interference, from its proprietors for seventy-five years. Independence, along with a good budget, tends to make for quality journalism. The reason Murdoch’s papers don’t get awards or respect (at least from journalists who don’t work for him) is that he’s as involved a proprietor as any.

The hatred of Murdoch by the great population of journalists who don’t work for him is stoked by many things, but underlying all 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 the 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.

MAY
31, 2007

As the
Wall Street Journal
deal progresses in slow motion, all the ritualistic behavior—the wooing, the assurances regarding editorial independence—on Rupert Murdoch’s part ought to be understood not necessarily as farce, but certainly as Kabuki. And yet the earnest Bancrofts respond earnestly.

This is partly a sense of the turn in mood—if Lisa Steele and her sisters are going for the deal, and carrying Michael Elefante with them, that’s a major shift—but there is an additional purposeful feeling. A kind of
Let’s hear what the man has to say.

While Murdoch would gladly lead the Bancrofts into exactly the kind of trap they are walking into—showing their hand before the other guy shows his, revealing their intentions well before it is necessary to reveal them—the Bancrofts are really going out of their way to be naifs and victims. Selling a company, or not selling a company, is a highly codified drama in which a buyer or seller ultimately bests the other by their knowledge of the nuance of the process. It’s balletic. And the Bancrofts are now on the verge of committing some ghastly, and mortal, ritual missteps.

How is this happening? True, Michael Elefante has little idea what he’s doing when it comes to mergers and acquisitions, but that’s why he’s hired Wachtell, Lipton, the most hallowed M&A firm in the country. The family’s advisors, Merrill Lynch along with Wachtell, should have told the family that the moment they start negotiating on editorial agreements they won’t get a price higher than $60—because they are effectively telling Murdoch they’re willing to do this deal for the editorial protections.

But the problem is…well, the Wachtell and Merrill people won’t say it’s the most frustrating deal they’ve
ever
done, but it’s close. So frustrating that they just want to get the deal done—get their fee and get out. If the client won’t acknowledge the rituals in a highly ritualized situation…if people don’t listen, if they can’t listen no matter how you explain…well, fuck it.

It’s Josh Cammaker who has to put this ungodly mishmash of wishfulness and good intentions into some sort of statement.

Meanwhile, the
Journal
itself isn’t helping. A good part of the family’s information is coming from the paper itself. It’s coming from reporters who are calling up whatever individual members of the family they can get on the phone and sharing with them the latest gossip they’ve heard—and, in return, hoping for family gossip—which is then passed from one family member to another. Or they’re reading it in the paper itself—the
Journal
is churning out all manner of wacky stuff coming from inside the family (the wackier the family member, the more likely it is he or she is talking to reporters, most likely reporters from the
Journal
).

Indeed, from reading the
Journal
the Bancroft family comes to believe that, in fact, it is more than likely
not
selling the company—at least not to Murdoch. On May 31, the paper, reflecting the anybody-but-Murdoch view sweeping the newsroom, reports the possibility that Dow Jones will be sold at a lower price to an alternative buyer because the family hates him so much. (That same day, Billy Cox sends an e-mail, which he leaks to the
Journal
, accusing family members of leaving him out of the process, and saying they don’t have “the foggiest idea what is going on.” Murdoch, he adds, is the best person to sell to.)