War at the Wall Street Journal (33 page)

"We'll figure it out," Brauchli replied, and then decided to get a lawyer. He soon hired Robert Barnett, the always cheerful, $975-an-hour Washington power broker who represented both of the Clintons, Bob Woodward, Lynne Cheney, Alan Greenspan, and Queen Noor of Jordan on their book deals. Barnett went to work; Brauchli went ahead with plans for a trip to Asia and the
Journal
's California bureaus while Barnett handled the details of his "resignation."

That night, Brauchli and Thomson went out for a drink at Moran's Irish bar, one of the regular newsroom post-deadline watering holes nearby. "This makes no sense," Brauchli said. He had been making changes to the paper, doing much of what Murdoch wanted, he thought. Thomson knew his boss too well: "The precipitating fact is the change in ownership. It's obvious."

Brauchli had been telling people in the preceding weeks that ed
itorships weren't like rent-controlled apartments. "There are no squatters' rights," he would joke. He had been cast out of the job he had worked to obtain for a quarter of a century. His only option now that he had agreed to go was to negotiate how much his silence would be worth to News Corp. He would say that it was his choice to leave, but he had some leverage.

 

The plane had landed, and now, speeding along the highway in a black Suburban to downtown Washington, Murdoch and Ginsberg never turned from their cell phones. At some point Ginsberg noticed an e-mail from Marcus Brauchli about a planned breakfast. "That's weird," Ginsberg said, almost to himself. "I just got an e-mail from our friend M.B.," he told Murdoch, who was up in the front seat next to the driver.

Murdoch paused, looking puzzled. These initials meant nothing to him. For a moment, he seemed to have no memory of the man whom he had considered it necessary, at some earlier moment, to fire. "Who is that?" Murdoch asked.

Pushing himself forward from the back seat of the SUV past a faulty middle seat that was stuck and folded in half, Ginsberg started a whispered consultation with Murdoch, who was on the phone again after Ginsberg's last syllable.

It was 11:29 and Murdoch's attention had suddenly shifted. "Sam? Congratulations," he said in a suddenly cheery tone. Sam Zell, real estate magnate and fellow billionaire, had purchased the Tribune Company, publisher of the
Los Angeles Times
and the
Chicago Tribune
and the owner of television stations and smaller papers. The tortured auction of Tribune was further confirmation of the newspaper industry's slide. Using very little of his own money, Zell financed the acquisition with debt that he was now struggling to pay off. To recoup a few hundred million, he had decided to sell the Long Island newspaper
Newsday,
a paper neither Murdoch nor Zell cared much about. Murdoch's interest in
Newsday
was only as a property that might prop up one of its competitors, his beloved
New York Post.
Combining the printing and distribution of the two papers would save him the $50 million a year he lost at the
Post.
It was a beautiful deal for him and his friend Jimmy Lee at JPMorgan, who had been integral to both the buyout financing of Zell's Tribune acquisition and a primary Murdoch adviser on the Dow Jones transaction. In the
Newsday
purchase, Lee had paired two of his best clients. (Murdoch never won the prize.
Newsday
went to the Dolan family, who controlled the cable company Cablevision. The Tribune purchase turned into a disaster for Zell. The company filed for bankruptcy in December 2008.)

At eleven thirty the car was halfway to the hotel and Murdoch picked up his phone again. It was Les Hinton. Hinton remembered fetching Murdoch sandwiches back in Adelaide when the two were working at Murdoch's first paper, the
Adelaide News.
Now there was this day's work to organize around a slight unpleasantness.

Murdoch's pledge not to interfere with the "editorial independence" of the
Journal
was being tested. Though many within News Corp. had found it mildly insulting to have to sign an agreement that implicitly said Murdoch was unfit to run a respectable paper, Murdoch was willing to weather such slights. They were minor, temporal; they always faded. Murdoch thought the separation between a newsroom and its owner was another false conceit of American newspapers, particularly those of the East Coast establishment variety. But if they helped him get what he wanted, he was willing to sign on to an artificial set of rules he would inevitably circumvent.

In this case, Murdoch had agreed to a five-person "Special Committee" designed to protect the
Journal
from editorial interference by the owner. The five members would each be paid $100,000 to go to four meetings a year. They would be on call for the managing editor and editorial page editor of the
Journal
in case either felt Murdoch was stepping across the line and inappropriately influencing the paper's coverage. The paper had previously been left to flourish without prying from the family. On any given day, the Bancrofts didn't know what was set to appear in the following day's
Journal,
nor did Dow Jones's business executives. The journalists were isolated and allowed to carry out their work uninterrupted, mostly happy to ignore the quickly eroding business prospects of Dow Jones.

"My own feeling is that I'll tell the Special Committee," Murdoch said. Meanwhile, Ginsberg, in the back of the car, was working his own angle, on the phone with Robert Thomson: "It's going to break tomorrow. It's really going to be bad if it breaks somewhere else," other than the
Journal.
Murdoch and Ginsberg were chatting, not to each other, but each working toward the same goal.

They rode for a few minutes in silence, until Ginsberg's cell buzzed with a text message from
Journal
editor Nik Deogun telling him the paper had caught wind of the situation and was soon going to put a story out on the wire. Grimacing at this inconvenience, Ginsberg called Thomson to discuss it. "Tell him to hold it and we'll give it to him exclusively," Ginsberg said, referring to Martin Peers, the
Journal
editor overseeing the story. "Tell them to hold it until we have a signed deal."

The black Suburban pulled into the driveway of the Ritz-Carlton and Murdoch stepped out of the car. He walked into the lobby and leaned against the front desk. "Rupert Murdoch; I'm checking in," he said. The pretty woman behind the desk smiled knowingly at this celebrity, quickly producing his swipe card for the elevator. The bellboy was starstruck. "Thank you very much, Mr. Murdoch, and it's a pleasure to meet you," he said eagerly.

Murdoch walked into his eleventh-floor Ritz-Carlton suite, booked for the night though he would stay for only a few hours that afternoon, and threw his coat down. Ginsberg and Bill McGurn followed, setting their bags down in the foyer. "It's huge," Murdoch commented as he lumbered toward the bedroom as if he were unaccustomed to such luxury.

Immediately, Ginsberg was on his cell phone again, dialing Robert Thomson, attempting damage control. The paper that Murdoch owned seemed intent on showing the world that it still had some spine. It wouldn't be scooped on its own news
again.
Standing by the window in the suite's marble foyer, Ginsberg put his cell phone on speaker as Murdoch approached. "Tell him to hold it and we'll give it to him exclusively," Ginsberg said to Thomson.

"Tell them to hold it until we have a signed deal," said Murdoch, wearily. This would be an annoyance for him, for this news to break before he had alerted the appropriate people. The contract that they had been haggling over with Brauchli's lawyer, Bob Barnett, for two weeks would be signed in a matter of hours, and then Murdoch wanted to personally call the members of the Special Committee to preempt any potential revolt in their ranks. "Can't we just say that this thing's been written and he's
going
to sign it?" Murdoch yelled, clearly accustomed to revising reality so the facts served his needs. But he had bent this one as far as he could. They had to wait for Brauchli to arrive in Washington and sign the contract.

"Marcus doesn't get off the train for another damn two hours?" Murdoch asked, incredulous. Ginsberg shook his head.

"I'm going to call him right now and say I'll call you at five and we can go over the story then," Ginsberg said. Murdoch, frustrated by these strictures, this tight timetable, was irritated the story couldn't be contained.

"They don't answer to News Corp.," Thomson's voice, tinny from the cell phone reception, told Ginsberg. "We can't tell them not to run a story."

Thomson, aware that his boss was losing patience, stressed to Ginsberg that Murdoch had to make the calls to the Special Committee before anything was announced. "He absolutely must call the Special Committee."

"And what do I do about the
Journal?
" asked Ginsberg.

"Just say, 'Give me a window and I'll give you the story.'"

"What publisher doesn't make the decision what to publish?" Murdoch said over the sound of the cell phone conversation. He stalked through the living room and past the marble fireplace to the bedroom.

Ginsberg called Martin Peers and promised he would give him the story later, when he could. "I'll make sure you don't get scooped," he said.

Murdoch returned to the living room and paced in a small circle, looking over the comments he would make at lunch. He held a single page of lined notebook paper in his hand, covered with his handwritten scrawl.

 

After lunch, Murdoch returned to the Ritz-Carlton suite, loosened his tie, and dropped onto the plush chair by the phone in the corner. Brauchli had not yet arrived in Washington. It was two fifteen, and Ginsberg dialed Thomson. "[Brauchli] could have been down there six hours ago," Thomson said, his voice frustrated and weary. Just that morning, instead of leaving early for DC, Brauchli had stayed in New York to keep up appearances. "We attended a meeting for WSJ .com and attempted a witty repartee to give the appearance of nothing happening," Thomson continued.

No one commented. Brauchli was out, essentially fired. Not in so many words, of course. No top executives were fired in modern corporations. Murdoch had another way of saying thanks for the memories. "OK," Murdoch said, pausing again. "But I don't see the purpose it serves" to go to the meetings, to pretend all was well.

Thomson sighed. "I don't either. Unless it is being seen as a trouper to the end, for whatever psychological purpose that would serve." Thomson continued, intent on the reason for the call, the instructions for Murdoch to complete the task. "What's implicit is an air of finality. That the discussion is over and as a courtesy, we are informing you. What Marcus has slightly in his head is that it isn't final until the Special Committee meets. They are under the impression that someone from News Corp., Mark [Jackson, Dow Jones's general counsel], is making the calls. What they don't know is Rupert is making the calls." If Murdoch made the calls, it would carry more weight. It would be harder for them to object. It would give Murdoch the outcome he wanted.

In the meantime, Rupert made other calls to Long Island congressmen, to smooth his way through acquiring Tribune Company's
Newsday.
Like a Great White, he had to keep moving to survive. After those calls, he dialed Jimmy Lee. "Did you have the conversation with the
Journal
about our subject of common interest?" Murdoch asked, wondering if word of his interest in
Newsday
had been leaked to his media outlet. "No, not yet," said Lee. "But it's OK. It's all been sent over and I talked to Sam [Zell]." He spoke quickly, bringing a smile to Murdoch's face, like a father indulging his precocious child.

At 4:27, the phone in the hotel suite rang again. The contract with Brauchli had been signed. Murdoch went immediately over to the phone on the desk at the window. He dialed the numbers of the members of the Special Committee. "I can't get anyone," he drawled softly after a round of unsuccessful calls.

Ginsberg, across the room on the couch, offered the cell numbers of the Special Committee members. Most worked, connecting Murdoch to a group of people he reassured with rare unctuousness, working off a script prepared for him by his general counsel Lon Jacobs.

He first tried Lou Boccardi, a respected journalist and a former CEO of the Associated Press. "Lou, this is Rupert Murdoch," he said. "Fairly urgent I speak to you. I'm temporarily reachable at 202-835-0500, room 1112. If you don't reach me, I'll try you back. It's fairly urgent I speak to you."

"Is Dean Phillips [Susan Phillips, dean of the George Washington University business school] there? Hi. Sorry to bother you. I'm calling the members of the committee as a courtesy to let you know the managing editor, Marcus Brauchli, has resigned." Pause. "He's been very careful to say we've behaved scrupulously but he feels it's time to move on." The plan would be to have a call at midday the next day.

"It's all very civil and friendly. I just thought I would tell you instead of you reading it. OK." Murdoch laughed. "I just thought we'd have a chat tomorrow and have him on the line."

Phillips thanked him for calling. "Not at all," he replied. "He's a very nice fellow. It's all been done in a very civilized way. Thanks so much. Not at all. Bye."

One down, four to go.

Murdoch repeated the same script with Jack Fuller, a
Chicago Tribune
Pulitzer Prize winner who went on to become the president of all of Tribune's newspaper operations. The call was quick and painless.

"Well, I got two," Murdoch said after hanging up.

Next, Murdoch updated Thomson on the calls to Phillips and Fuller. "We're going to send messages to their BlackBerrys to call here," Murdoch said.

Retrieving more cell numbers, Ginsberg called them out.

Murdoch placed a call to Tom Bray, the chairman of the committee and a former
Detroit News
editorial page editor who had written for the
Journal
's own editorial page. "Tom, sorry to bother you. This is to tell you the sad news [at this, Ginsberg chuckled] that Marcus Brauchli has resigned. It's all very civilized and friendly ... No, we don't have a replacement. But the idea is for Robert Thomson to go through the staff for someone for you to nominate.