The Man Who Owns the News (23 page)

And it is not just the run-amok personalities for which he has to muster some canny appreciation; not at all intuitively, he has to appreciate the magazine itself. To understand what this particular property can buy him.

Because
New York
magazine, for all the attention it gets, is still just a bit of local color. It has a relatively small circulation. The company is losing money. Oh, yes, and with
New York
comes the
Village Voice,
that left-wing insane asylum Felker acquired two years before and which, perhaps among all the publications in the world, is the least congenial to Murdoch.

So what does he see?

He sees a deal. If the idea is merely to buy things that you can afford, the turmoil at the company gives him that opportunity and a discount.

But after that comes the more complicated and astute perception. Whereas more cautious businessmen would reason that it’s not a great idea to enter a business by engendering profound ill will in the industry in which you hope to succeed—that, in fact, goodwill is a primary currency—Murdoch has the fairly new sense that making a splash is the all-important thing.

Just getting the deal done makes you something. It comes down to, as it so often has for Murdoch, a strong-arm percentage play.

Felker’s deal with Carter Burden, a significant shareholder in the
Village Voice,
provided that after the acquisition of the
Voice,
Burden got 24 percent of the
New York
magazine company—but if he wanted to sell, he was obliged to offer it first to Felker. He could not just put it on the open market. This meant that Felker, with his 10 percent—together with the 24 percent that Burden couldn’t sell to anyone before offering it to Felker, along with his other allies—was pretty much guaranteed continuing control. There was one loophole (at least in Murdoch’s telling and as his justification): If the company lost money for four consecutive quarters, Burden would be free to offer his shares on the open market.

Murdoch represents something of a pure experiment. How do people react when an outsider arrives? Felker himself, when he took over the
Village Voice
two years ago, did it with some of the same tactics as Murdoch will use at
New York
(the owners of the
Voice
sued Felker for the same reasons that Felker will eventually sue Murdoch), but, of course, Felker was less an outsider than Murdoch.

“We are faced with a sudden transfer of control…to a foreign publishing conglomerate controlled by a man whose journalistic approach appears alien to us and whose commitment to our city is untested,” declare “the editors, writers, artists, and photographers” of
New York
magazine in a letter to the board of directors.

What kind of person is willing to be such an outsider, to tolerate being so reviled? What kind of temperament and constitution are required? This is not obvious or intuitive.

The pathology can be missed only by those who are simply too stunned by the accomplishment. In weeks, he’s achieved a level of business recognition that would ordinarily take years—note that, in the editors and writers’ statement, he is now a “foreign publishing conglomerate”—at the expense of his own reputation.

Felker’s fatal mistake is thinking that Murdoch might be his saving grace. He proposes that Murdoch take a stake in
New York
. Murdoch, despite his friendship, sees the opportunity. He fairly judges that if Felker is offering him a piece of the company, he would offer it to others too, meaning a transaction will likely occur and that the company is in play.

The only real issue, from this view, is 51 percent. Carter Burden and his ally, Bartle Bull, together own 34 percent. Alan Patricof owns 10 percent. The investment banker A. Robert Towbin has about 10 percent. Felker has 10 percent, and so does Milton Glaser, a Felker pal and the magazine’s art director. The rest is held by small, public shareholders.

Murdoch’s approach is around the back. He’s talking to anybody he can talk to—sucking up information, counting votes. It’s politics. It’s junior high, and you’re trying to figure out, through the friends of the girl you have a crush on, what’s her level of interest in you.

This may not be anything more than an incredible appetite for gossip. This is what gets him going. He’s a kibbitzer. The right shading of who wants what, the sense of dispute, of grievance, the opening—having that information moves him. (Murdoch sometimes seems startled by his own success, even embarrassed slightly by, in the recounting, the way the pieces have fallen together. “Luck. There’s just been a lot of luck,” he’ll say. All these side conversations, these countless emissaries, this nonstop phoning, this incredible focus on the game mean he has the wherewithal to create more lucky opportunities than most.)

Patricof becomes the key ally. Patricof himself has used
New York
magazine as a way to trade up, or bootstrap himself, into a position of some significance. Beginning with a minor financial interest, he’s managed to get his 10 percent of the company. He’s been vying with Felker for dominance too. Indeed, Felker has been trying to push him out of the chairman’s slot on the board. Felker wants that job for himself. What’s more, the stock, which has traded as high as $10 a share, is down to $3.25. Patricof is looking to get rid of Felker or get out himself—at a big number.

Burden, however, holds the power. And he has a short attention span as well as a dilettante’s sense of direction. He won a seat on the city council, but this is starting to bore him. His investment in the
Village Voice
was about wanting to be a crusading publisher. He sold out to Felker and
New York
magazine because being a crusading publisher turned out to involve much too much aggravation. Now here he is, the largest shareholder in
New York
magazine, a position that should be pleasantly diverting but instead is aggravating him. If he could wash his hands of all this, he would. True, he could just sell out to Felker. But, honestly, he has come to loathe the man.

On the other hand, he doesn’t like Murdoch either. Or doesn’t think he likes him. Who is he? An Australian. Everything about him is dubious. But Burden’s lawyer, Peter Tufo, has been talking to Murdoch. Tufo seems to think he’ll pay as much as $8 a share. Get them out of this whole thing. Solve the whole Felker problem.

For Burden, the key point is not to have to think too much about it. So, sure, he’ll sell to Murdoch. Fuck Felker. Theoretically, he has to offer his shares to Felker first, but now he’s being told, on some finer reading of their agreement, he doesn’t have to.
So, fine. But don’t bother me anymore.

This is the state of play when Murdoch shows his hand to Felker: He’s picked up the votes.

Felker mounts a brief rally—in the press as much as in the boardroom. He gets his friend Kay Graham to say she’ll rescue him. This is a little bit of a guilt thing, because, after all, she introduced Murdoch to Felker. She let Murdoch in. This will all come round—so many of the players are fixed. Murdoch, understanding the Fairfaxes and Packers, knows this. Thirty years later, Dow Jones will petition the
Washington Post
to rescue it. (Graham’s lawyer, Martin Lipton, who dives into the
New York
magazine mess with the
Washington Post
’s late bid, will over the years come to know Murdoch well and do work for him, and, as it happens, be retained by the Bancroft family in the face of Murdoch’s bid.)

Carter Burden is in Sun Valley skiing and in no mood to take Graham’s or Felker’s calls. But, just to make sure, Murdoch charters a plane on New Year’s Eve 1976, flies to Sun Valley, and puts a check for $2 million into Burden’s hand. It’s done, except for the shouting.

The next two weeks will begin to define Murdoch in New York and in the media world. He’s the outsider. He’s the big guy picking on the little guy. He’s the thief. He’s the guy who forecloses on widows and orphans.

The backlash is fierce. But there is a level of the din that he just doesn’t hear. Partly, it’s that he’s used to it (and he will become ever more used to it). These kind of ad hominem attacks are what naturally accompany anybody who’s in the press. Your competitors, in the business of creating controversy, attack you. Also, he doesn’t really have to be concerned with what people think of him. If it works, it works; if it doesn’t, it doesn’t, and he can just pick up and leave. He understands that he doesn’t really belong here. Any move he makes is bound to disturb. So what the hell.

The Murdoch takeover of
New York
magazine is the big first event in one of New York’s pivotal and fateful years: 1977 (Son of Sam, the blackout and subsequent riots, and the city’s brush with bankruptcy).
Time
magazine puts him on the cover as King Kong striding over the rooftops of Manhattan.
Newsweek
declares, “Press Lord on the Attack.” Simply, Murdoch is made—in those several weeks of heated and rancorous attention, he is
created in America
.

As a parting shot, Jann Wenner’s
Rolling Stone
magazine—a key competitor of the
Village Voice
—runs an account of the
New York
magazine takeover by
New York
magazine writer Gail Sheehy. Sheehy, who will later marry Felker, sets in stone the version of Murdoch as the enemy of decent journalists everywhere, the practitioner of businesses practices so underhand and vile that no decent people could ever have a chance against him.

SEVEN
The Eighties—Business Guys

MAY
1, 2007

The cultivated courtliness, or lack of coolness, at Dow Jones that has kept it outside the media gossip world is about to be seriously upset by the e-mail Gary Ginsberg receives at 10:46
A.M
.

“I know,” reads the message from David Faber at CNBC.

Ginsberg is still recovering from the winter publicity firestorm when—not entirely unrelated to the bid for the
Wall Street Journal
—News Corp. turned against one of its stars, the publisher and Murdoch confidant Judith Regan, who was preparing to publish a theoretical “confession” by O. J. Simpson, and then to follow up with a Fox television interview. This was an entirely Murdochian event, but, faced with a sudden media backlash over the tastefulness of paying Simpson for his confession—and with a bid for the respectable
Wall Street Journal
on his mind—Murdoch uncharacteristically punted on the Regan project. Equally uncharacteristically, when Regan—the type of tabloid character whom Murdoch has always indulged—acted out in response, he fired her. Ginsberg’s immediate thought when he gets the e-mail from Faber is that for the second time in six months, he’ll be managing the biggest media story going.

A baby-faced forty-four-year-old with a perpetually rumpled open-neck dress shirt, Ginsberg hotly disputes his frequent designation as “Murdoch’s PR guy.” That implies he’s a functionary who, after the company acts, processes the information about its actions—sending out the press release. Ginsberg is sensitive on this point, not least of all because whatever he does he gets paid a healthy seven-figure salary to do it, so it’d better be more than handing out press releases. And you certainly don’t want to be perceived as the PR guy to somebody who’s perceived to be the Devil (you might be on the side of the Devil—but not as his PR guy).

Before coming to work for Murdoch, Ginsberg was planning a historic and public career as an intimate of his schoolmate at Brown University, John F. Kennedy Jr. In addition to starting a magazine,
George,
which wishfully conflated politics and entertainment, the friends were planning their political future. Ginsberg, a lawyer, worked in the Clinton White House for a stint. He was also briefly an on-air personality at MSNBC. It was idle fantasy—and something more—imagining himself with JFK Jr. in the White House.

Since joining News Corp. in 1999, six months before JFK Jr.’s death, he has had a new sort of corporate communications job. It isn’t
just
corporate communications. It’s something closer to what the communications director does in the White House. Or, considering that Murdoch is one of the most politically influential men in the world, Ginsberg’s job is a greater one. He is the point man for all of the information going out of the company, as well as all of the information coming into the company. Ginsberg has gone, in eight years at News Corp., from an unlikely figure—a liberal Ivy League yuppie and Kennedy-phile in a company that has contempt for Ivy League liberal yuppies and for the Kennedys—to a central one. His job is (although no one at News Corp. will ever say it like this) to protect Murdoch from himself. Or to protect News Corp. from its worst and basest impulses. When Ginsberg was first interviewed for the job, in the aftermath of the shit storm following Murdoch’s abrupt cancellation of Hong Kong’s last British governor Chris Patten’s book—because of negative comments Patten had made about various Chinese government officials with whom Murdoch was then trying to curry favor—the main question for Ginsberg was how they should have done it differently. Ginsberg said the obvious: They shouldn’t have canceled the book, since that just called attention to it.

Ginsberg is everybody’s point man. Peter Chernin, the president and COO of News Corp., calls Ginsberg. Murdoch’s children call Ginsberg. Wendi Murdoch calls him. He is the Murdoch interpreter.