Murdoch's World (45 page)

They found solace elsewhere. “Some of the initial concerns about the values of the
Journal
—in that it would turn into a business version of the
New York Post
—have
proven to be unfounded,” said William Grueskin, a former senior news executive for the paper. “The
Journal
's news has continued to be pretty much on a straight and narrow path, though I think it has a very different focus.”

In September 2012, Murdoch returned to Australia for one of his periodic visits. He liked addressing the troops, in this case at the annual awards for News Ltd.
“We must not take, whatever we do, our foot off the gas when it comes to our newspapers,” Murdoch said at Sydney's State Theatre,
a charming jumble of art deco, Gothic, and Italianate touches. “Print will be with us for many, many years. But we must also provide our readers with the greatest news experience possible on other platforms. Where others hesitate in the face of disruptive technologies, we see opportunity and will charge forward.”

In the US,
Murdoch's gaze turned westward. Most of the major assets of Fox Group outside Fox News—were based in Hollywood. The Tribune Co. was exiting a bankruptcy and eager to shed its newspaper properties, including some of the most storied papers in the country. Murdoch wanted to add the
Los Angeles Times
to his newspaper portfolio, so he could own the most influential publication based in the world's entertainment capital. The sister
Chicago
Tribune
held a mild appeal as well. Tribune preferred selling its newspaper unit to a single buyer, both for the ease of the transaction and also because it had some partnerships with other publishers that would be damaged by unraveling the chain. But given rules preventing ownership of a major paper and multiple television stations in the same market, and Fox's two LA TV stations, Murdoch wasn't fully convinced he could get such a deal past federal regulators at the FCC anyway.
“It won't get through with the Democratic administration in place,” Murdoch told the
Los Angeles Times
. The public interest media lawyer and Murdoch-watcher Andrew Schwartzman did not think the possibility of a Murdoch-owned
Los Angeles Times
was so far-fetched. “This is
a strategy of deciding what you want to do, figuring out a mechanism that will ultimately get you there, and then proceeding based on a bet that the regulators will change to accommodate what it is that you're trying to do,” Schwartzman said. Murdoch, he said, “has repeatedly won such bets.” One of the key owners of Tribune was the investment firm Angelo, Gordon & Co. Its cofounder, John Angelo, is the father of James Murdoch's friend and fellow executive Jesse Angelo.

In December, Rupert Murdoch announced that he would kill off the tablet-only
The Daily
to appease investors and to protect the American publication Murdoch truly loved—the
New York Post
. Angelo, who had served as
The Daily
's sole editor, would return to the
Post
, this time as publisher. The
Post
's tone and metabolism would stay the same. Yet for the first time, every Murdoch publication had to justify its existence. Unlike the
Sun
or
Sydney Daily Telegraph
, both of which were losing circulation, the
Post
did not dominate its market and had been losing money at an accelerating rate. Angelo knew the numbers previously, more or less. But he found looking at the books as the top business executive a jarring experience.
Holy shit
, Angelo told a friend.
That's a lot of money to lose
. (He would later serve as editor, too.)

Murdoch would remain chairman and CEO of the sleeker and investor-friendly
Fox Group, the media and entertainment conglomerate including Fox News, Fox Studios, Fox Sports, and the like. To assure investors that they should hold onto their new News Corp stock, Fox Group (later rechristened 21st Century Fox) would assume any costs stemming from the hacking scandals. The tab had reached several hundred million dollars by the end of 2012 and was likely to grow. Chase Carey would remain chief operating officer, the number one non-Murdoch. James Murdoch would stay on as deputy chief operating officer and would await his chance to succeed his father. He was among a very small number of people who thought that possible.

Despite his father's wishes,
Lachlan Murdoch refused to return to the new News Corp, no matter how snugly the structure would fit into his Sydney-based life. He knew he would be CEO in name only. His father would
always
want to run the papers, know what was happening, scan the revenue lines, scour for daily gossip. There was room for only one Murdoch in that alignment. Subsequently Rupert Murdoch rewarded a surrogate son, appointing Thomson to lead News Corp, as he had elevated a surrogate daughter, Rebekah Brooks, at News International.

Thomson leapfrogged his boss, Lex Fenwick, the publisher of the
Wall Street Journal
and the CEO of Dow Jones, to lead the entire corporation. The CEO of the reconstituted News Corp, holding sway over the most influential and widely read newspapers in the US, the UK, and Australia, would be a news executive with only a few months of pure business-side experience. Thomson had the boss's full trust and a seemingly Sisyphean task, promising investors
“relentless” cost-cutting at the papers accompanied by digital innovation that would prove, he promised, their salvation.

Thomson's appointment had consequences elsewhere in the empire. Some associates
thought Joel Klein was disappointed that he had not been named CEO. If so, he never said so publicly, soldiering on as chief
of his new technology-based education venture. His
legal strategy seemed to have worked. The US Justice Department could have made a criminal case against News Corp under the Federal Corrupt Practices Act for the bribes funneled to British cops. But the Brits were aggressively pursuing those cases. News Corp's cooperation with law enforcement agencies was reasonably strong, and prosecutors and regulators prepared a nine-figure settlement that would be announced after the split. That was a huge relief at corporate headquarters.

Tom Mockridge, brought in from Sky Italia to steady News International as its CEO, could not abide being passed over as News Corp's new CEO. He quit and would later emerge as the new CEO for Virgin Media's expanded pay-TV play in the UK. Murdoch's earlier nemesis, John Malone of Liberty Media, had just bought Sir Richard Branson's controlling stake in Virgin Media. The appointment involved an element of revenge for both Mockridge and his new boss.

Rebekah Brooks was set to face trial in fall 2013 on charges of phone hacking, bribing public officials, and concealing computers and documents from police in July 2011. She was to be alongside several former colleagues, including Andy Coulson, Ian Edmondson, and the private investigator Glenn Mulcaire, who was to stand trial on separate charges. Additionally, Brooks was set to face criminal charges for perversion of the course of justice, along with her husband, Charlie, her former secretary, and the former security chief for News International. She, like her co-defendants, disputed all charges.

In Parliament,
Labour MP Tom Watson wrote a book about his fight against News International,
Dial M for Murdoch
, and advanced back up his party's hierarchy.
Louise Mensch resigned her seat, moved to New York City to be closer to her husband, and became a columnist for Murdoch's
Sun
tabloid.

James Harding, editor of the
Times of London
, left the paper after being told News Corp wanted someone else in the job. He had been the youngest and one of the most popular editors in the paper's history. His
paper had admitted a single case of email hacking that had not been approved ahead of time by editors or lawyers. But Murdoch and other executives could not forgive his tough editorial line against hacking and the British parent company. Murdoch told Leveson he could not believe Harding had not bought the disks that had the MP expense records on them—handing that scoop to the
Daily Telegraph
. Harding had thought paying for the story was dishonorable.
Murdoch thought getting beaten was. Harding later became BBC news chief. Will Lewis came to New York to work on strategic issues for News Corp.

Thomson's deputy,
Gerard Baker, succeeded Thomson as managing editor at the
Journal
and editor in chief of the Dow Jones Newswires. Murdoch strode into the
Journal
newsroom with Thomson for the announcement, all three men clad in nearly identical dark striped suits and collared white shirts without a tie, as the
chairman doused his new editor with a bottle of high-end champagne. A significant number of his journalists
anticipated Baker's tenure with apprehension, given his record. Instead, at least in the first six months, he proved a pleasant surprise, tapping Blumenstein and a few other American editors with roots in the paper's pre-Murdoch era as his top deputies. Baker was well aware of his reputation. He showed a light touch at the start.

At a dinner held by the British-American Business Association in February 2013,
former
Time
magazine managing editor Walter Isaacson launched into effusive praise for Baker and the
Journal. After what you have done in the last four years
, Isaacson said,
the
Wall Street Journal
today is the best newspaper that I have ever seen in my lifetime
. New York Times Co. CEO Mark Thompson sat in the crowd stoically as Isaacson said those words. It was a funny thing: The head of the new News Corp would be Australian. The managing editor of the
Wall Street Journal
was British. The
New York Post
was still run by an untamable Aussie. The
New York Times
had turned to an ex-BBC executive and frequent Murdoch critic for its CEO. And
the
New York Daily News
was edited by Colin Myler, the Brit who had run newsrooms at Murdoch's
Sun
and
News of the World
.

By 2013, New York's newspaper scene was effectively defined by, and in reaction to, the World of Murdoch.

RUPERT MURDOCH had counted on his mother as a touchstone, a reminder of his Australian roots and a handy one-liner to ward off any suggestion he was getting too old for the job.
Well,
my mum's ninety
, Murdoch would say, in later years shifting the age to one hundred
, and she still gets about
. Finally, in December 2012, at the age of 102, Dame Elisabeth died. Her death occasioned a state funeral. Prime Minister Julia Gillard, never favored by Murdoch, did not attend. She would later fall, replaced by Labor's Kevin Rudd. The tributes poured in, from Murdoch's own roster of commentators and critics and old political allies, but also from foundation presidents, university officials, hospital directors, museum docents, and the like. For Dame Elisabeth's memorial,
mourners packed St. Paul's, the Anglican cathedral in downtown Melbourne, just a block north of the Yarra River and close by so many of the cultural institutions that she had patronized and championed over the years. Huge television screens were set up outside the church for the throngs who wanted to watch the tributes to this great Australian figure.

She was hardly a saint to her son, though.
She was tough
, he told people. The service was broadcast nationally. Murdoch paid loving tribute:
“Today I wish to speak to the extraordinary accomplishments of this exceptional woman. On its own, that would be a formidable task. It is made even more daunting by the obligation of a grateful son, to do a justice to a mother whose love gave me more than I could ever hope to repay.”

Elisabeth Greene Murdoch made clear she was devoted first and foremost to Keith Murdoch—and that her love for their children was
an expression of her love for him. Since their aging father would not be the family disciplinarian, she took on that task too. “Just let me say that Mum assumed that role with none of the angst or self-doubt that consumes so many modern parents,” Dame Elisabeth's son said to laughter. “I still remember, vividly, the good smacking I got for pulling my big sister Helen's pigtails.”

Murdoch's mother gave him an indirect smacking once again, decades later, during a nationally televised documentary by telling an interviewer that she assessed success and failure differently than her son did. Money couldn't be the point, she said. Murdoch told those who had come to pay their respects that Dame Elisabeth was a woman who disdained finery and preferred pursuing charity by stealth. “However you came to know her, what you remember is the strength of character that defined Elisabeth Murdoch's life,” Rupert said. “It was formed by the credo she learned so many decades ago at the Clyde School: We are judged by our acts.”

We are judged by our acts
. Dame Elisabeth lived long enough to see her son's full ascent. Keith Murdoch died when Rupert was just twenty-one, at the tail end of his studies at Oxford. The pudgy-faced son burned with a desire to demonstrate he could make his mark in the same field as his father.