People Named Murdoch

Should the family be closed as well as the paper?

The possibility that Rupert Murdoch would choose to close a 168-year-old newspaper, a profitable one at that, is nil. It’s just that the man at the top, who once called all the shots himself, isn’t alone anymore.

News Corp is a family-run company—and, more and more, a family imbroglio. 

Some of the intrigue:

Rupert has ceded substantial power to his son James, who made the decision to close the News of the World. While James’ power is part of a calculated succession plan, he also has his own leverage: he’s his father’s closest family ally in accommodating Wendi—the patriarch’s divisive third wife. His father needs his support. James has an often tense relationship with his sister, Elisabeth, who has a tense relationship with Wendi. Elisabeth has built her own media company, which her father bought this year—giving her great say within News Corp. James and Elisabeth’s relationships, indeed many of the family relationships, are facilitated by Elisabeth’s husband Matthew Freud, the most famous, and most famously slippery, PR man in London. One of Freud’s closest friends is Rebekah Brooks, the CEO of News International, who almost everybody believes needs to be fired. Rebekah, counseled by Matthew, has become James’ most dedicated lieutenant. James and Matthew are determined not to fire her (indeed, she is an important instrument in Matthew’s business). As it happens, Wendi doesn’t like Rebekah. Rupert, who has described Rebekah as a social climber in his family, can’t press for her ouster for fear of siding with Wendi against his children. Rupert’s oldest son Lachlan, once the presumed heir and now a sullen presence in Australia, fights with his brother and is most closely aligned with his sister Elisabeth. Their older half sister, Prudence, is aligned with James. Ultimately, they will have four votes between them when it comes to running the company—with no tie-breaking mechanism.

Just as News of the World was a throwback to another time of lawless newsrooms, News Corp. is a throwback to insular and Byzantine family rule—and a them-versus-us relationship to the world.

We don’t apologize, don’t accommodate, instead we wield our power, is the Murdochian view. In that view, Nixonian in so many ways, the campaign against the News of the World is a campaign by Murdoch enemies.

The embattled Murdochs—as they see themselves—have denied, stonewalled, stood tough, no matter that virtually every statement they’ve made about the unfolding scandal has been contradicted by events to come.

If there’s regret on their part, it’s not so much about breaking the law as it is about giving their enemies a weapon. Shutting the paper down is, they hope, a way to take away that weapon.

James seeks to be his father. He’s Rupert without the subtlety—quite something to think about. Even his father was gob smacked when, during the election campaign for prime minister, James charged over to the offices of the editor of the Independent to publicly upbraid him for his paper’s coverage of News Corp.

Rupert has watched much of the unfolding of this scandal from afar—and he’s been grumpy about it, often complaining to Robert Thomson, The Wall Street Journal editor, about how James has been handling the mess. That’s one reason James doesn’t much like Thomson or his father’s other counselors (he sees himself as his father’s counselor)—their advice often leads to his interference. In this he has the support of his siblings, who don’t like their father’s interference either. (Two of Rupert’s key confidants, his communications chief, Gary Ginsberg, and general counsel, Lon Jacobs, lost their jobs this year in part because they didn’t get along with James.)

Recently, the Murdochs have started to refer to the hacking scandal as a crisis as serious as News Corp.’s near bankruptcy in the early '90s—in family lore one of Rupert’s finest moments.

That, however, was a crisis resolved by negotiation, cutting deals, and leveraging strength. Rupert is at his best when talking power to power (one reason why the BSkyB deal seems still viable).

But this crisis is about public perception and trust—which is not, to say the least, Rupert’s nor his son’s métier. Family insiders say that it was Freud, the PR man in the family, who suggested closing the paper. He is said to have described it to James as a “Wapping” approach—that is, when Rupert in the dead of night moved his British papers to Wapping on the outskirts of London to break the print unions.

Closing the News of the World may be the first instance of proactive PR strategizing during the entire term of the scandal, but, in the language of scandals, it’s probably too little too late. (News Corp. executives not implicated in the scandal openly talk with gallows humor about all the shoes that have yet to drop.)

Credibility may be restored, and the public cry for blood sated, only when the company is no longer run by someone named Murdoch.