The Man Who Owns the News (48 page)

Here’s a random selection of the names that pepper a few hours of conversation with her—people she’s talking to, visiting with, or with whom she’s discussing business opportunities:

Larry Page

Edward Tian

Zhang Ziyi

Sergey and Anne Brin

Tony Blair

David Geffen

Barack Obama

Mark Zuckerberg and Priscilla Chan

Tom Perkins

Tom and Kathy Freston

Graydon Carter

Barry Diller

Michael Bloomberg

John McCain

Anna Wintour

George W. Bush

Mick Jagger

Bono

Christian Louboutin

Diane Von Furstenberg

Natalia (the Russian model)

Justin Portman

Brad Pitt

Gordon and Sarah Brown

David Cameron

Pan Shiyi

Robin Li

Jiang Zemin

Jiang Mianhang

Steve Bing

Cherie Blair

Hamilton South

Michelle Obama

Karl Lagerfeld

Mike Milken

Silvio Berlusconi

Richard and Lisa Perry

It’s a marked, odd, and possibly transformative shift for Murdoch: He’s become an official member of the glamour establishment. He says, when I ask him about Wendi’s politics, that she has no politics, really—that growing up in China has made her suspicious of politicians. But that’s disingenuous. She’s profoundly liberal-ish. Arguably, the exact thing that Murdoch has always stood against—the self-satisfied people, the elite people, the fancy people—she’s fallen in love with. She gets him to go to Davos (where she’s arranged for Rupert and Bono to act as the waiters at a dinner for the wives of world leaders and assorted queens and princesses—Rupert serves the after-dinner vodka shots), and to Cannes (and on to Barry Diller’s boat on the Riviera).

Indeed, most strangely, he’s suddenly, through Wendi’s good offices, rather at home in Hollywood. Through Wendi, David Geffen—the gay, über-liberal former music executive—becomes Rupert’s frequent confidant.

Also—and this is just
barely
visible to the naked eye—Wendi begins to replace Rupert as the center of attention. She’s the shock of the new; he’s a dimmer figure.

She’s living the life. With intense enjoyment.

Having, for instance, embraced the Google guys, Larry Page and Sergey Brin, she invites them to come out to the Murdoch ranch in Carmel, California. Later, trying to explain the unlikely interaction of Murdoch and the Google boys—as diametric opposites in temperament and interests as you might find—she will paint an enthusiastic portrait of Murdoch’s curiosity: “He’s so interested. He always asks questions. He want to know everything. He asks so many things…like…” (erupting into laughter)
“‘ Why you no read newspapers?’”

There’s a stoic and slightly puzzled tolerance of her inside News Corp. Or sometimes it seems more like controlled alarm. This is partly because she is so obviously changing him. And partly because she is, potentially, a loose cannon. And partly because the success of this marriage means so much to him. Hence, everybody at News Corp. is invested in it too. (When the
Los Angeles Times
suggests that it is investigating a rumor about Wendi having a relationship with another man at News Corp., dealing with the story becomes a high-level priority in the company, with Murdoch, Wendi, and the employee all supplying statements of absolute denial and no one at News giving it any credence at all. The
Los Angeles Times
doesn’t run the story.)

While she’s busy being superwife, she becomes a director of News Corp.’s MySpace operation in China in 2006. She makes plans to carry the torch in the 2008 Beijing Summer Olympics. She’s producing a movie with Zhang Ziyi, China’s most famous actress and the fiancée of Vivi Nevo, the jet-set financier who has invested heavily in media companies, including News Corp. (and who is the godfather of Lachlan Murdoch’s son). She’s hustled the old biddies at Brearley, the staid Manhattan school at which her older daughter is now enrolled, and had the school implement a comprehensive Chinese-language program. She’s relocated her elderly parents from Shandong to Forest Hills, Queens, and made Murdoch take her mother to Balthazar, a fashionable SoHo spot, for Mother’s Day brunch. “They get along very well because they don’t understand each other,” she says in a fit of laughter. “I control the conversation.”

She’s at the center of the center. Every after-hours e-mail to Rupert Murdoch about the Dow Jones deal comes through her. Because her husband still doesn’t get e-mail.

THIRTEEN
The Ecology

JUNE
25–26, 2007

It is the
New York Times
Murdoch is really after, more than even the
Wall Street Journal.
He is a man with almost no sense of, or interest in, historical context, but things stick in his head. Meaning accrues. Sore points persist. Issues fester. Enemies remain. Don’t get mad, get even. To persist, to justify, to avenge, to have his way, maybe to even impress someday—this is his long-term game. His takeover of his father’s old company in 1987 was such a resolution. Now there is the issue of the
New York Times
to resolve.

Keith Murdoch set it up. Rupert was nineteen when father and son made a Sunday pilgrimage out to Hillendale, the Sulzberger family estate in Connecticut, on a visit to New York. His father was making the clear point: The Sulzbergers were the First Family of newspapers. There was a further, subtler message about measuring up, a way of establishing what it means to be a newspaper proprietor family, a setting of horizons. (His father, he came to understand, did not actually own newspapers—and the Sulzbergers did.)

There was his first business hash with the
Times
. During the 1978 New York newspaper strike—little more than a year after he’d taken over the
New York Post
—he came to believe that the
Times,
with vastly more economic muscle than he had, was prolonging the dispute with the unions precisely to put
him
out of business. (He broke from the publishers’ association and made a separate labor deal—getting the
Post
back to press before the
Times
and the New York
Daily News
.)

Then there was the
Times
’ earliest personal attack on him (its first profile of him, on the other hand, was a laudatory item in 1969—the
Times
called him a “boy wonder”—which appeared in a special editorial section about Australia and New Zealand clearly designed to pick up some targeted advertising). He had acquired a controlling interest in an Australian airline, Ansett, and, to increase his clout in U.S. business and political circles, decided to switch a big order for new planes from Airbus in Europe to Boeing in the United States, but he needed the U.S. Export-Import Bank, which was to provide the financing, to give him the same rates as he could get in his Airbus deal. The
Times
revealed that, as a precursor to getting the favorable deal, he’d had lunch at the White House with President Jimmy Carter and met with Ex-Im Bank president John Moore, a Carter appointee, on the same day; what’s more, shortly before the deal was approved, the
New York Post
endorsed Carter over Teddy Kennedy in the hotly contested New York presidential primary. The
Times
story landed Murdoch in front of a Senate investigating committee (which absolved him of any conflict or impropriety). The
New York Times,
he told Thomas Kiernan, an early biographer, was out to get him. “I’ll have my day with the
Times
” was his promise to Kiernan.

There has been, over more than thirty years, very little respite for him from the
Times
’ treatment. First he was characterized as a guttersnipe, then as an outlaw and pirate, and finally now as a threat to our way of life—culminating during the battle for Dow Jones, on June 26, in the first part of an “investigative” series meant to demonstrate his unsuitability to own the
Wall Street Journal
.

One of the severest charges against Murdoch is that he runs a pitiless attack machine whose primary purpose is not journalism but the defense of his own interests—that not since the heyday of the Hearst organization, with its vendettas and passionately vindictive columnists, has there been a major American news organization so willing to prosecute its opponents as Fox News. The irony, therefore, cannot be missed that the people on News Corp.’s eighth floor are as outraged by the
New York Times
’ naked attack on Murdoch as Fox’s opponents are by
its
naked attacks.

The first part of the series goes after Murdoch for his regulatory dealings. The
Times
is partisan enough in this campaign not to mention that in the specific instance of lobbying for the relaxation of television ownership rules the
Times
has also been lobbying the government to relax those same rules.

The next part is about Murdoch’s dealings in China:

Many big companies have sought to break into the Chinese market over the past two decades, but few of them have been as ardent and unrelenting as Rupert Murdoch’s News Corporation.

Mr. Murdoch has flattered Communist Party leaders and done business with their children. His Fox News network helped China’s leading state broadcaster develop a news Web site. He joined hands with the Communist Youth League, a power base in the ruling party, in a risky television venture, his China managers and advisers say.

Mr. Murdoch’s third wife, Wendi, is a mainland Chinese who once worked for his Hong Kong-based satellite broadcaster, Star TV. Her role in managing investments and honing elite connections in China has underscored uncertainties within the Murdoch family about how the family-controlled News Corporation will be run after Mr. Murdoch, 76, retires or dies.

The
Times
turns out to be quite an inept attack dog. Its team of reporters has, at great expense, failed to turn up anything new. What’s more, News Corp.’s own response—in a statement drafted by Ginsberg—so cows the
Times
that it cancels the rest of its planned series. All this supports Murdoch’s view of the
Times:
While it is, in this attack, “using its news pages to advance its own corporate business agenda,” it cannot even do that well. So what will become of it?

Murdoch, after all, is promising the greatest and perhaps final newspaper war. He is going to take the
Times
down—or, not impossibly, he is going to take the
Times
over. If he is to actually become the dominant news proprietor in America, he has to unseat the
Times
.

And now seems to be the moment to do it.

2007:
THE
TIMES

By late June 2007, the New York Times Company share price has fallen by more than half since 2002. The
Times
seems only marginally less weak than Knight Ridder, the second-largest U.S. newspaper company, which was forced into a sale by its disgruntled shareholders, or the Tribune Company, the country’s third-largest newspaper company, owner of the
Los Angeles Times
and the
Chicago Tribune,
which will also shortly go on the block. The
Times
is having not just a business crisis but a full-scale identity blowout. The familiar
Times
reader, the Eastern establishment reader—as dedicated and loyal and homogeneous an audience as few newspapers have ever had—has, in some sense, disappeared, or, growing old, has been abandoned by the
Times
.

The
Times
’ strategy—a doomsday scenario, foreseeing a one-newspaper nation, a last-man-standing paper—has been to make the paper national. Hence, the
New York Times
is no longer principally a metropolitan paper. With a daily circulation of 260,000 in the five boroughs, it is no longer even credibly a New York paper. (Its two tabloid competitors, the
Daily News
and the
New York Post,
sell a million more copies between them than the
Times
in New York City.) It has become a second-read paper across the country—if you are among that fast-shrinking population of people who actually read a newspaper, then you read your local paper and, after that, the
Times
. It has become an add-on.

The
Times
is a jittery place—far from sure about its own standing and virtue.

Its two big scandals—the first in 2003 about Jayson Blair, the reporter who made up an impressive catalogue of vivid stories, and the second in 2005 involving Judy Miller, who, with the
Times
urging her on, went to jail for protecting her sources in the Valerie Plame affair, whom the
Times
subsequently decided she should not have protected so much—were notable not just for the structural weaknesses they revealed in the
Times
’ journalistic operation but also for what they revealed about the
Times
’ tendency to panic under pressure. Howell Raines, the
Times
executive editor whom the publisher, Arthur Sulzberger Jr., appointed to turn the
Times
into a national paper—it was on Raines’ watch that Blair wrote his fabricated stories—had the publisher’s absolute support until the day he didn’t and was forced to step down. Judy Miller likewise had the publisher’s absolute support until it was clear that PR considerations and the court of public opinion called for the opposite position.