War at the Wall Street Journal (2 page)

For three anxiety-ridden months, Gail and Arthur had watched Murdoch struggle to snatch up the
Journal.
Throughout the pummelings of his earlier takeover battles, the press baron always seemed buoyed by his jousts with the "old guard" who disdained his screaming headlines and pulpy stories. But Murdoch's outsider status was yesterday's cliché. He had been a media titan around the globe for nearly half a century. Some may have seen his latest move as a brash upstart's most recent triumph over tradition—a view Murdoch encouraged—but it was much more complicated. Many of the Bancrofts, in fact, had come to see him as not a spoiler or a corrupter, but a savior.

The Sulzbergers begged to differ. Gail still called Murdoch "dreadful." It didn't matter that his instincts might just keep their medium alive. Those same instincts, they feared, would debase the country's dialogue. They knew that perhaps one (maybe two) strong survivors would become America's national newspaper or newspapers. Mur
doch believed that the race would be between his own new flagship publication and the
Times.

 

The medium still fascinated Murdoch, who had come from a newspaper family and inherited his first, the
Adelaide News,
as a twenty-one-year-old fresh from Oxford. Within a few years he was acquiring (the
Sydney Daily
and
Sunday Mirror
) and in 1964 launched Australia's first national paper, the
Australian.
Forty-three years later, he controlled the 20th Century Fox movie studio, the Fox television and "fair and balanced" Fox News empire, the BSkyB and Sky Italia satellite businesses, and now the
Journal.

Murdoch had inherited his taste for politics from his father, Keith, who, after having lost out to a rival reporter for the assignment to cover Australian troops in World War I, wrote a passionate letter critiquing the Gallipoli campaign. Frustrated with the censorship that didn't allow the press to report on the actual events at Gallipoli, he delivered the letter directly to the Australian prime minister. Though riddled with errors, the lacerating memo helped bring about the dismissal of the commander in chief of the campaign and, some say, the end of the campaign itself. Historians credit his letter with a greater impact on the events at Gallipoli than any articles published in the press.

Murdoch, like his father, didn't hide behind rules of journalistic objectivity; he wasn't too bothered by the occasional mistake. Murdoch was unafraid to use his media outlets, particularly his tabloid papers, as instruments of influence. In fact, he measured the success of his papers by their influence. In Britain, he achieved his greatest impact with the
Sun.
With nearly eight million readers, the
Sun,
in addition to its topless Page Three girls, carried more weight in its home country than almost any other paper in the world. It had steered the 1997 British parliamentary election to Tony Blair after Murdoch, alienated from Prime Minister John Major, led the Thatcherite British tabloid in an energetic campaign for the Labour candidate, who then won the election for prime minister in a landslide. The move shocked British Conservatives into nearly apoplectic fury. That was fine. Murdoch was no fan of pussyfooting in public, in private, or in print.

The
Journal
's conservative editorial page made it a natural
Times
antagonist; Murdoch would apply his predatory tactics to create an even tougher competitor to the more liberal institution. The
Journal
was the heartland's choice, but TV news programs, other newspapers, and magazines took cues from the
Times.
That rankled Murdoch, who sensed Sulzberger's politics on that paper's every page. The old posture of objectivity, Murdoch believed, was just a way to con
Times
readers into imbibing left-leaning perspectives. His
Journal,
never more feisty, would launch an old-fashioned newspaper war with guerrilla warfare and terrorist techniques. The battle for the future was on.

 

Born into privilege, Murdoch was Oxford-educated and pampered, but none of it showed. He revealed little and seemed the natural enemy of the overblown or lavish. He treated six palatial homes—in New York, Los Angeles, London, Long Island, Carmel, and Beijing—as more convenience than excess. The accouterments of wealth weren't what he was about. For Murdoch, the great game was its own reward; there was always the next move. There was a bit of theater to it all, and he went along with it, but he didn't put himself on display as an authoritative TV or social presence. He kept at the battle day by day and told his employees (there were almost sixty thousand) to call themselves pirates.

The Australian's conquest of Manhattan had begun in the 1970s when he snatched up the liberal
New York Post
and changed its political philosophy. He then moved on to
New York
magazine, where nearly all the staff walked out rather than face the new owner's reinvention of their magazine. Once, his breach of the Dow Jones fortress would have been unthinkable, but a series of lucky coincidences had given him his opening, and he had seized it.

 

Nearly eighty years after Clarence Barron's death, his family, to whom he left an estate of $1.575 million in 1928 ($19.4 million in 2009 dollars), had little in common with "Grandpa." None worked at his company or shared his passion for the business. (His last words were "What's the news? Are there any messages?") They lived off family trusts set up in the 1930s by Barron's adopted daughter Jane after she was widowed. Most of the money was tied up in the family business. Jane's three children, Jessie Cox, Jane Cook, and Hugh Bancroft Jr., who had lived comfortably off the fortune, entertained in their Boston Back Bay mansions and tended their horses. (Hugh, Jessie, and Jane died in 1953, 1982, and 2002, respectively.)

Their sparring heirs formed the three branches of the family—each with a roughly equal share of the family fortune—who had faced down Murdoch. His $5 billion, $60-a-share offer boosted the value of the original Bancroft fortune by over half a billion dollars, enough to allow the thirty-five adult members of the family to envision a few more years in the lifestyle to which they had become accustomed. But the family had been deeply divided by the offer and was even further torn apart now that the decision had been made.

Rupert Murdoch was a suitor more similar to their founder, Barron, than any of the Bancrofts would have liked to admit. (The year of his death, Clarence Barron broke with Dow Jones's late founder Charles Dow's decree that the
Journal
never endorse a political candidate and called for a vote for Herbert Hoover.) Like Murdoch, Grandpa Barron had multiple residences and an elaborate entourage. He traveled with sixty pieces of luggage, a secretary, a chauffeur, and a male nurse who buttoned his pants and tied his shoes for him since his girth prevented such exertions.

As his company passed through the generations, Barron's descendants turned their lack of interest into a virtue, protecting their precious heirloom with a policy of noninterference. "Leave it to the professionals" became the mantra. Such benign neglect worked as long as the family had a clear leader, and for much of the newspaper industry's halcyon years that leader was Barron's granddaughter Jessie Bancroft Cox—irreverent, boisterous, and horsey in the Boston way. As her family gathered in April 1982 at Manhattan's '21' Club to celebrate Dow Jones's hundredth anniversary, the round grandmother entertained with characteristic stories—she once caught future president Franklin Delano Roosevelt trying to cheat her in a game of mahjong. She had lived her life in Boston and spent the summers a short drive away at the family's lavish twenty-eight-room summer home, "The Oaks," on Cohasset Harbor, complete with tennis courts, a boat dock, and equestrian-inspired china that acknowledged Jes
sie's passion for horses. The house, originally designed by Barron as a wooden Victorian, had been torn down after his death by his son-in-law Hugh Bancroft, who rebuilt it in brick as a wedding present for his daughter Jessie. She had entertained President Eisenhower there and hosted elegant equestrian events, helping create what the local historian in Cohasset called "an illustrious chapter" in the town's history. At the time of the dinner at the '21' Club, Dow Jones was at the height of its success and power. Jessie's son, William Cox Jr., called the
Journal
"the best damn paper in the country."

But that evening, Jessie was in a foul mood. As a Bostonian and a sports fan, she had developed a strong affection for the hometown baseball team. The Red Sox had lost six out of the last ten games and she was upset about the losing streak. When another dinner guest mentioned the losses, she responded angrily.

"What the fuck's the matter with my Red Sox?" she cried, promptly knocking against the adjacent table before falling to the floor. She was rushed past her stunned relatives and died shortly afterward. With her died any remaining cohesion in the Bancroft family, and the "professionals" slowly adopted an ever more powerful role, dictating many of the family's financial decisions. That was until thirty-two-year-old Elisabeth Goth, the great-great-granddaughter of Clarence Barron, descended from the Hugh Bancroft branch of the family, decided to join forces with her third cousin Billy Cox III, Jessie's grandson, to challenge "the professionals."

Despite their occasional eruptions, the Bancrofts had become one of the lesser-known dynasties, lacking the blood rivalries of the Kentucky Binghams, the visibility and influence of the DC Grahams, and the social cachet of the California Chandlers. At the start, after the early sizing up, Murdoch may have wished for better sport, but he would learn that where money and New Englanders are concerned, the process of seduction takes more than a few clambakes.

The Bancrofts believed in the
Journal
name. Unambitious, a bit panache-deprived, they remained dedicated to their paper, from a distance. They never bowed, as others had, to the conglomerates, which would have stripped the publication of its identity and then puzzled over its failure. Unlike Murdoch, however, the family allowed their paper to espouse political views with which they disagreed wholeheartedly. The Bancrofts had, despite their largely liberal leanings, defended the
Journal
's deeply conservative editorial board, whose philosophy, "free markets, free people," and its flame-throwing editorials made it the vanguard of the conservative movement. That summer, however, Murdoch had presented a $600 million decision: turn down his offer, and they could watch the shares continue to founder at around $35, where they had been trading before he came on the scene. (There was the strong possibility that the shares would plummet, too, leaving the family stuck with their dwindling prize.) Or, they could accept Murdoch's offer, which boosted the value of their Dow Jones stake by more than half a billion dollars, and leave Dow Jones, once and for all, "to the professionals."

 

The Hudson glimmered in the sun as Diller's party of fourteen guests surveyed his new $100 million building, which would mystify passersby and was home to IAC's holdings such as the Home Shopping Network, Ticketmaster, and LendingTree. Diller's decision to include Murdoch—his old boss, friend, and occasional tormenter—had been spur-of-the-moment. He had called Rupert that morning to congratulate him and found himself issuing an invitation. The two had a history.

Diller had been instrumental in the creation of Murdoch's wildly successful Fox television network, which had taken on what seemed at the time the ironclad dominance of the big three networks. After nearly a decade of devotion to all things Murdoch, Diller left unexpectedly after Murdoch refused to give him partnership in the business he had helped build. Even then, Murdoch had an instinct for self-preservation through family control, though his own clan had weathered its difficulties, beginning in a predictable fashion when Murdoch became attracted to a younger woman.

As he was falling in love in the 1990s with the opportunity that was China, he was simultaneously diverted by a young Chinese employee at Star TV. Wendi Deng, the daughter of a factory manager, was almost forty years Murdoch's junior. Unlike his second wife, Anna, Wendi didn't urge him to work less or spend more time at home. Romance blossomed—one that to this day Murdoch denies having begun until separating from Anna. Even his children—he had three with Anna and one with his first wife, Patricia Booker—doubted his version of events. "Absolutely it was going on. I know from his friends," one confessed. "He'll deny it to his dying day."

On the night of the Diller fete, Wendi was traveling, unable to join the festivities. Anna Murdoch had held a spot on the News Corp. board, occupied an office in the headquarters, and had her own assistant. But in her position at the company she rarely ventured far afield from organizing social events for executives and their wives and protecting her children's future stake in the empire. Unlike Anna, Wendi launched herself, however peripherally, into News Corp.'s business, consulting on the company's MySpace online social network site in China. She was also planning to start up a production company with film star Ziyi Zhang. (Wendi had introduced her countrywoman, on Murdoch's own yacht, to Vivi Nevo, the Israeli venture capitalist and single largest shareholder in the Time Warner company. The two became a couple.)

Lately, despite the efforts of his young wife, who was pushing Murdoch into the twenty-first century and into trendy black shirts, his age had begun to show. His eyes sagged. He meandered even more than usual in conversation and appeared, on occasion, more grandfather than rapacious mogul. Some of his executives saw his soft spot for the
Wall Street Journal
as evidence of his decline.

When Diller reached Murdoch on the phone that morning, he had congratulated him and quipped, "I know you have nothing else going on, but I'm having some people on the boat tonight and wanted to see if you'd join me." Many empire builders would have had their own victory party planned, but Diller knew that Murdoch was neither a social animal nor a seeker of publicity. Murdoch had uncorked a bottle of Shiraz the previous afternoon with a few of his executives, but he had no wide group of friends to tap that night.