CHAPTER 24

No thanks, Rupert

For the third consecutive Sunday afternoon, my telephone rang. It was Rupert again. It was the autumn of 2007, and once more I was caught in his headlights.

After years of dreaming, and four months of intense and tricky negotiations, Rupert was buying Dow Jones & Co. It was a huge information operation, with global print and digital interests, and annual revenues of more than $2 billion. But the real object of Rupert’s desire, the pin-up in Dow Jones’s portfolio, was The Wall Street Journal, the newspaper he had wanted for more than two decades. He had once told me he wanted to run it himself. ‘I would make myself publisher and let other people manage the rest of the business,’ he said.

The deal was due to be completed before the end of that year, and Rupert wanted me to leave News International, move to New York, and take the job of chief executive. Dow Jones was Rupert’s holy grail — or at least, his most recent one — and running it would be high profile, high pressure, and high paid.

I told him I wouldn’t do it.

For more than 40 years, I had zigzagged back and forth from three continents. I was pulled around the world in the tailwind of Dad’s military life, and then I had hitched myself to the wagon train of Rupert Murdoch’s ambitions. I had found it exhilarating — there was nothing I would have changed. But I had had enough.

I had been in London for 12 years in a demanding, sometimes exhausting, job. For nearly 20 years, I had managed large divisions of News Corp — magazines, television stations, newspapers. I had been ‘in harness to Rupert’, as a fellow veteran, Andrew Knight, would say, for almost my entire career.

I had also just come through the most personally painful period of my life. After 35 years of marriage and five children, Mary and I had separated in the spring of 2004. She had travelled everywhere with me in Rupert’s wake — 11 relocations among six cities, in three countries. My work had dictated the geography of her life and our children’s.

The decision to separate had been mine, and I had moved into a flat a mile away from our family home in Hampstead. The three oldest were adults and in America, but James and Jane were teenagers and still at school. It had been hard on everyone, but three years later, although Mary was still angry, we were at least on an even keel.

In 2007, I was living with Katharine Raymond, who I had first met at a Labour Party conference. The Sun’s political editor, Trevor Kavanagh, had introduced us, but I had no memory of it until Kath reminded me. The second time we met, years later, I wondered how I had forgotten. Kath was a clever, dark-haired, blue-eyed Liverpudlian. The daughter of a joiner and a librarian, she was born three miles south of Bootle, but 23 years after me. With Kath, I was happy in a way I had never expected to be and, at the age of 63, beginning to imagine there might be other ways of life.

Kath mattered more than another big job; besides, she had her own career and ambitions. Brought up in working-class Liverpool, her father had been a trade unionist and a socialist, and she had inherited his passions — joining the Labour Party as a teenager and ending up as a special adviser in Tony Blair’s government. In 2007, she was working at Number 10 as a member of Gordon Brown’s policy unit, and being encouraged by the prime minister to seek election to Parliament.

Rupert’s job offer was, of course, appealing, even though I no longer felt the need to prove myself. I enjoyed being the boss, but deep down I still missed journalism, and always preferred the intense immediacy of the newsroom to the insulated corridor of the executive. Another big job didn’t matter enough to uproot Kath and upset her plans, and I was going nowhere without her.

But still Rupert kept calling.

These calls were not a complete surprise; he had been plotting his Dow Jones bid for months, and had talked to me about it often. When the terms of the deal were agreed that summer, I was part of the first News Corp group to visit the company headquarters in downtown Manhattan. Ten of us spent a day in the company boardroom with a dozen apprehensive Dow Jones executives.

As well as explaining the business to us, the Dow Jones managers were enduring personal auditions in front of their prospective future employers. It’s not hard to work out from Rupert’s body language who fails to impress him. He rarely tells someone when he thinks they’re talking rubbish — especially when he doesn’t know them — but he has a skill of simply disconnecting. More than once that day, his face glazed over, leaving me and others to continue the conversation, while he studied the notes in front of him. He could do the same to long-time executives; it was unfailingly disconcerting.

That night, he took us to Scalinatella, an Italian restaurant in a basement off Third Avenue, where we pooled our judgements. It would have made painful listening for some of them as we discussed, dismissed, and crossed names off our mental list of ‘keepers’. Danny DeVito, the comedian and actor, looked on curiously from a nearby table.

I gave in to Rupert on the fourth phone call. The previous weekend, Kath had unexpectedly told me I should take the job. Until then, she had said nothing, only listened as I talked. I told her several times that I had spent enough time running big businesses, that I didn’t want to go back to America, and that News International would be my last job as a chief executive. I didn’t say she was the main reason I was turning down the job, but Kath is no fool, and that Sunday she sat beside me on the bed as I put down the phone, having once again declined Rupert’s offer.

‘Why don’t you do it? It’ll be hard work, but exciting and we’ll have fun for a few years. Besides, admit it, you’re bored here. What have you got to lose?’ she said.

Kath had seen little of America, apart from occasional trips with me to visit my sons, and a month-long tour of American prisons when she was working at the Home Office. When I told her this wouldn’t have provided her with a proper perspective of the country, she had replied: ‘You learn a lot about a country from its jails.’ I knew that America’s had horrified her.

‘But what about you?’ I asked now.

‘Don’t worry about me. I’m happy to go. I can turn my back on British politics for a while. It might even be a good idea,’ she said.

Shortly before Brown became prime minister, Kath and I had taken him and his wife, Sarah, for dinner at Le Caprice, a smart restaurant tucked away in a dead-end street in St James’s. Kath, prone to sudden attacks of enthusiasm, had poured forth a stream of policy ideas on drug abuse and violent crime. After three years at the Home Office she had developed a range of odd passions. Gordon pulled out a notebook and began scribbling in thick felt pen. They talked for ages while Sarah and I chatted more sedately. The following day he phoned to ask her to join his policy unit at Number 10. She had accepted, but with a measure of reluctance.

She had spent four exhausting years as an adviser to David Blunkett through his three Cabinet positions at Education, the Home Office, and Work and Pensions, and was now building her own, more easy-going, portfolio. As well as writing occasional comment pieces for the Evening Standard and other newspapers, she was working as a freelance political consultant, and the flexibility — and the money — appealed to her. Returning to government felt like dressing herself up in chains again. Besides, she was suspicious about Brown’s job offer. ‘I think he’s trying to please you,’ she told me. ‘I might be useful to him on policy, but he’s more interested in keeping News International close than he is in reforming equality laws.’ I told her she was too modest, and paranoid.

Soon after going into Downing Street, Kath began to worry about Brown’s state of mind. He had started on a high. The unanimous vote of Labour MPs propelled him into Number 10 after Blair’s mid-term resignation, and early polls showed a surge in popular support. But his first weeks had been hard going. All politicians dread uncontrollable ‘events’, and the summer of 2007 had plenty of them. Extensive flooding across Britain, terrorist attacks in London and Glasgow, and the gangland murder of a child in Liverpool all contributed to the chaos. Kath thought Brown was a brilliant and original thinker, but one evening after another stormy day, she told me: ‘I think the strain’s beginning to show. He threw a telephone at someone today.’

Brown had been in a foul mood that morning when Kath walked into his office. He had been reading the newspapers and they were not treating him well. When another official arrived late for the meeting, he kicked his office wall in a fury, leaving the latecomer in tears.

Brown’s intemperance became the gossip of Downing Street. He once grew so angry with a harried secretary who was slow to type his dictation that he lifted her from her chair to seize control of the keypad himself. Even as chancellor of the exchequer, his flashes of temper were famous.

But Kath also found him disorganised, limited in the range of policies that kept his interest, and said he often failed to complete the more boring work in his overnight red boxes. She was also disappointed, considering Labour’s vaunted advocacy of women in politics, to find herself the lone woman in Brown’s 10-member policy unit.

The next time Rupert called, I was less emphatic in my refusal. He could hear my new hesitation and pressed hard. ‘I’ve got to make a decision,’ he said. ‘Are you going to take the job or not?’ For the first time he named two other candidates he was considering. ‘You’re my first choice, but I need to know soon.’

I told him we should meet, and on the evening of Sunday 7 October 2007 we sat together in the same small hotel where we had dined 12 years earlier when he first took me to Wapping. It was Kath’s birthday and we had spent the weekend in Norfolk, walking the freezing fens and bird watching, talking about the possibilities of Dow Jones and New York. She waited for me a street away at another hotel while Rupert and I talked.

Our meeting didn’t take long. He produced paper and a pen and began writing numbers. I periodically invited him to increase these numbers, and sometimes he did, but not always.

Rupert said he wanted me to sign a five-year contract. It would be the first time in 48 years that I would have a written employment agreement; it was the same for many of Rupert’s early executives. This informality ended as the American operation grew, but by that time I had been there so long tenure was on my side, and Rupert had a reputation of being a generous sacker; more than once, I proposed a settlement for a departing executive and he instructed me to improve upon it. I had imagined working full-time three more years before putting together a portfolio of more varied and less demanding jobs. But five years was a solid guarantee going into a challenging job.

With the deal done, Rupert, Kath, and I headed for dinner at the home of Rupert’s daughter, Elisabeth, and her husband Matthew Freud, in Notting Hill. It was a big, white-stuccoed house, overlooked by a block of council flats, with many rooms and levels, and the scene of some spectacular and occasionally wild parties. That night, there was only a small group gathered at a table in the kitchen.

Matthew was wearing his standard expression of permanent pop-eyed surprise. He was one of London’s most successful PR operators and a perennial schemer whose mother once told Kath: ‘We knew he would end up either a millionaire or in prison.’

Elisabeth, for all her drive, success, and practised toughness, was a naturally warm woman whose face in quiet moments would soften to the point of seeming almost needy. Born in Australia, raised mostly in America, now a dedicated Brit, her American accent was thinning with the years.

Also at the table was Rupert’s younger son James, 34, who always radiated a fierceness and absence of self-doubt that was either innate or an act, I could never decide. He had made shareholders happy and his father proud as CEO of Sky TV. Rebekah Wade — soon to be Brooks — was there, with her sharp, measuring eyes; and Charles Dunstone, a family friend, and to me always a plump, sweet-natured man and great company. However, since he had built a billion-pound company, Carphone Warehouse, from savings of £6000, I doubt I had the full picture of him.

Even at family gatherings, Rupert’s presence brought tautness to the atmosphere; he was always the patriarch his children were anxious to impress. For outsiders, it could sometimes be awkward to watch, but that night I paid no attention to the usual tensions.

I spent the evening in a daze of excitement and doubt, feeling the familiar thrill that came with another big Murdoch move, relishing the drama and challenge, and the power and attention as well. But I was worried about Kath. She might have appeared cheerful to everyone else that night, but by now I recognised her brave face. I knew she would have preferred a quiet evening at home, discussing our plans. Besides, she disliked this sort of dinner party, and wasn’t fond of all the guests. She had once told James Murdoch to ‘watch your manners, Mr Murdoch’ during one of his famous sweary rants.

She was leaving behind her whole life for a place where she knew no one but me. She also knew she had triggered the decision, that it would not be happening but for her. I think, consciously or not, she had tested me, that at first she feared I would find the offer irresistible and accept it whether or not she came with me. Once she knew I would never leave without her, I think she made her sacrifice in place of the one she knew I was ready to make.

Excited as we were, we had to keep our news secret for two months, until the Dow Jones deal was formally closed and News Corp took possession. I told the children in New York — they had been keen all along for me to come ‘home’ — but Robert Thomson and I shared the secret alone at News International. After five years editing The Times, Robert would become Dow Jones’ ‘publisher’, in practice the editor-in-chief. He was another veteran of New York, having spent four years as US editor of the Financial Times.

A few at the top of the company knew in advance of our appointments, and Kath told her boss she would be leaving at the end of the year. Brown was surprised. He had been prime minister only six months. ‘I thought you were going to stay and become an MP,’ he said. He sent me his congratulations, but Kath knew he was anxious about who would take over at News International. Kath’s resignation coincided with the fatal decision of Brown’s political life. Three days before my 7 October deal with Rupert, Brown had been at Kath’s birthday party at the Shoreditch House club. He presented Kath with a gift from their son John — a toy windmill that flashed lights and played music. The evening was buzzing with the expectation he would call a general election; most of Brown’s staff were sure he would. But on Saturday 6 October, as we walked the Norfolk coast near Cley next the Sea, expecting Kath would be submerged for the next month or so with the campaign, Downing Street sent her a text saying the election was off. Brown, who had been struggling to decide, appears to have been spooked by news that an opinion poll would appear next day in, of all places, the News of the World, predicting a decisive Labour defeat. The front page next day took credit for Brown’s retreat: ‘News of the World POLL KILLS ELECTION.’

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The acquisition of Dow Jones and The Wall Street Journal was not popular with everyone at the top of News Corp. By 2007 the company’s centre of gravity had shifted away from print. The new money-spinner was television, in particular US cable and the company’s share of British Sky Broadcasting. It had been a healthy transition from one media to another, a transition many newspaper companies failed to achieve, but that hadn’t made it less painful for inky-fingered old hands. They saw the Dow Jones bid as a last hurrah for the industry upon which Rupert had built his fortune.

It was made with a shrewder motive than the simple purchase of a famous newspaper. The Wall Street Journal was a global brand with a peerless reputation. It had positioned itself online more cleverly than any competitor, determining from the start that its journalism was too good to give away. Beyond the newspaper, there was a range of promising digital assets, most of them in the growing business-to-business sector.

All the same, there were strong reservations about the deal from some. Peter Chernin was Rupert’s number two and a Hollywood veteran who spent much of his time running the Fox operation. When he called, I thought it was with congratulations, but the first thing he said was: ‘You must be crazy taking that job.’

We were definitely paying what business people euphemistically describe as a ‘full price’. Rupert’s offer of $60 a share was a 67 per cent premium on Dow Jones’ trading price, and valued the company at more than $5 billion.

The bid needed to be high to make sure it broke through the resistance of the family that had controlled the company for ninety years. The business was started in 1882 by Charles Dow, Edward Jones, and Charles Bergstresser. Clarence Barron bought the company in 1902, and upon his death control passed to his stepdaughters, Martha and Jane. Barron’s son-in-law, Jane’s husband, a depression-prone lawyer named Hugh Bancroft, became boss in 1928, but killed himself five years later.

By the time of our bid, the company had gone through years of change and expansion. It owned a wide range of publications including Barron’s, a weekly for sophisticated investors, and SmartMoney magazine, a down-to-earth guide to personal finance. There was also the Far Eastern Economic Review, the weekly Financial News in London, one-third of the Moscow business newspaper Vedomosti, and a chain of local newspapers in seven American states. An array of digital businesses included Marketwatch.com; Factiva, a worldwide aggregator of news and data; the business and finance news agency Dow Jones Newswire; a dozen or more operations providing high-speed data feeds and corporate governance information; and the Dow Jones Industrial Average, the world’s most famous stock market index.

For the Bancrofts, a rich and secluded clan of Boston Brahmins, control of Dow Jones — in particular, The Wall Street Journal — was a point of family pride, even though it had been years since a Bancroft was in charge. Rupert’s takeover generated uproar among the usual suspects. It was a familiar chorus of hostilities that had built over decades among thwarted rivals, cast-off editors, and everyone else disaffected by his style of journalism, politics, and business.

The pundit Bill Moyers, a charter member of the Rupert Haters Hall of Fame, represented the most extreme outrage. ‘Rupert Murdoch is to propriety what the Marquis de Sade was to chastity,’ he said. ‘When it comes to money and power, he’s carnivorous — all appetite and no taste. He’ll eat anything in his path.’ Of the Bancrofts, he said: ‘Like Adam and Eve, the parents of us all, [they] are tempted to trade their birthright for a wormy apple.’

The Economist said The Wall Street Journal was the media version of Rupert’s ‘trophy wife’. Leslie Hill, a Bancroft family member who opposed the deal, mourned ‘the loss of an independent global news organization with unmatched credibility and integrity.’ James H. Ottaway junior, who became a director and shareholder upon selling his newspaper chain to Dow Jones in 1970, was the loudest internal critic. ‘Dow Jones is not for sale, at any price, to Rupert Murdoch,’ he said.

There was uproar almost every time Rupert tried to buy a newspaper, and the hostile climate was familiar to him. He had won and lost many battles: he tried to buy London’s The Observer in the 1970s — failed; The Buffalo News — failed; the Boston Herald — success; Chicago Sun-Times — success, but only after a bitter struggle; The Times of London — success after another struggle.

For him, it was just the conqueror’s latest campaign. But for the insulated Bancrofts it created a nightmare of family tensions, tearing them between their self-perceived heritage as guardians of a great institution, and the allure of a cash pot for the family in excess of a billion dollars. As the deadline for signing the deal approached, the family patriarch, 76-year-old William Cox junior, went into diabetic shock and was taken to hospital. The Bancrofts resisted Rupert’s overtures for three months before enough of them surrendered to the money, and the pressure of other shareholders. Thirty members of the family shared $1 billion.

Two years after the sale, Jim Ottaway crossed the ballroom of a charity event for the Committee to Protect Journalists to introduce himself to me — and take back his words. ‘I feared the worst and it didn’t happen,’ he said. ‘The Journal is excellent, much better than I believed it would be under Murdoch. And you made investments that would never have happened under the old ownership.’

I think he came offering peace, but his apology made me angrier than ever that people like him were sucked in by the worn-out anti-Murdoch theology that we were not worthy of the responsibility of running a world-class newspaper. By then, I had purged Ottoway’s name from the local newspaper chain Dow Jones had acquired from him. It was called Ottaway Newspapers, but I gave it the bland new title Local Media Group, thus sparing Jim Ottaway the ordeal of having his family name associated with an acquisition he fought so hard to prevent. It was an act of pure spite, but I didn’t feel guilty.

The news of my appointment broke in the first week of December and the office Christmas party in London turned into a farewell. A life-size cut-out of me was positioned at the entrance. I was presented later with a photo album with pictures of every guest standing next to ‘me’, and brief messages from each. James Murdoch, who was adding News International to his portfolio of responsibilities, wrote: ‘Big shoes, mate.’

My farewell gifts included a huge, bright oil painting of The Sun’s newsroom, with its main characters plainly identifiable. It hangs on the wall of our London flat.

Within a few years this painting would look like a rogues’ gallery — or, at least, a gallery of alleged rogues — of close friends and good colleagues who were about to experience some of the most difficult years of their lives.