Murdoch, Thomson Make 'Wall Street Journal' Vulnerable to Scandal

Robert Thomson, the managing editor of The Wall Street Journal, isn’t Rupert Murdoch’s longest-serving soldier, but he is the media magnate’s closest friend—maybe one of his only friends. If, in some moment of self-doubt or worry, Murdoch has turned to anyone to unburden himself about the phone hacking scandal engulfing his News Corp., it almost certainly was not to his wife, Wendi, or his children, or any of his other employees, but to Thomson. The journalism community has debated for several years whether Murdoch’s ownership has helped or hurt the paper. But this scandal may make that argument moot. The paper has already lost its publisher, Les Hinton, who was also the CEO of its parent company, Dow Jones & Co., because of his connections to the hacking mess. And, though its news pages have started to come back from a notable lack of coverage of its parent company’s troubles, the Journal's opinion and editorial pages have published numerous tone-deaf defenses of News Corp. that have brought down a storm of ridicule. Whether he meant to or not, it was Rupert Murdoch himself who made the situation worse for the Journal. When he testified before a Parliamentary committee on Tuesday, Murdoch tried to make the case that he wasn’t really involved with or concerned about the News of the World, the now-defunct paper at the center of the hacking scandal. In doing so, he said, “I have got to tell you that, if there is an editor that I spend most time with, it is the editor of The Wall Street Journal, because I am in the same building.” Murdoch was referring to Thomson, and it was no surprise: Though Thomson is exactly 30 years Murdoch's junior, the two men are famously close. Besides sharing a birthday, they are both Australian-born, both married to Chinese women, both newspapermen at their core. Murdoch is the godfather of Thomson’s two children; their families have vacationed together. The two men reportedly speak to each other as many as five times a day. Thomson has, like Murdoch, been steeped in newspapers from early on. The son of a newspaper proofreader, he grew up in Melbourne and got his first job as a copy boy after high school. He attended university, but newspapering took priority. He worked his way up at some Australian papers and the Financial Times. After he was passed over for the top editor job at the FT in 2001, Murdoch came calling, and hired him to edit the Times of London, News Corp.’s serious paper of record in the U.K. Not long after News Corp. bought Dow Jones & Co. in 2007, Murdoch installed him as managing editor of the Journal. There’s even been speculation that Murdoch actually bought the paper so Thomson could be its editor, a notion fueled by a rapid series of moves by Thomson there. To get the Bancroft family to sell Dow Jones, Murdoch had to agree to safeguard the paper’s editorial independence. So he initially named Thomson as publisher—but he gave Thomson full editorial responsibilities, laying the groundwork to fire Marcus Brauchli, the then-managing editor, soon after, and have Thomson succeed him. Thomson hasn’t been implicated in the phone hacking debacle, but his close association with Murdoch could stain his ability to lead the Journal—not to mention his longer-term future. Thomson is in a tricky spot now, having to balance his friendship with Murdoch with the need to establish the Journal’s credibility as its parent company implodes in scandal. “I can’t imagine a more difficult position right now,” said Thomson friend Adi Ignatius, a former Journal correspondent who’s now editor in chief of the Harvard Business Review. “This is a tough test of his independence. He certainly can’t pretend he and Rupert aren’t close.” There are at least some small signs that Thomson may be trying to distance himself from his mentor. Details of conversations between Thomson and Murdoch about aspects of the scandal and Murdoch's response to it have made their way into rival publications. And yet Thomson has apparently made no moves to distance himself when it comes to the paper's coverage. As a former Journal staffer pointed out, when News Corp. was bidding for Dow Jones, Brauchli, then the Journal's managing editor, recused himself from editing coverage of the bid. It was a “way to protect the reputation of the brand,” this person said. “That’s the sort of thing that was done then. I don’t think anyone’s being recused here.” For now, the paper will have to deal with all of this while it also adjusts to new leadership—there's already been speculation that Thomson could move back up to his old job as publisher, replacing Hinton and making way for a more nakedly political editor, Gerard Baker, to get the top editorial job. Longer term, the situation looks bleaker still: The scandal could speed a succession at News Corp., and from there, accelerate the company's shift away from newspapers—a business that other family members don’t share Murdoch’s nostalgia for and which may be seen as increasingly problematic. If or when that happens, Thomson’s time could be up. “I would think that if something happens to Rupert, Robert has risen with him, and he would fall with him,” a former Journal executive said.

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Murdoch, Thomson Make 'Wall Street Journal' Vulnerable to Scandal

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Lucia Moses

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