The Murdoch Method

Notes on Running a Media Empire

Irwin Stelzer

• Éditeur: Atlantic Books
• Année: 2018
• ISBN:
  9781786494023
• Sujet: Business
• Sous-sujet: Biografie in ambito aziendale

An exclusive, insider viewpoint on the "Murdoch Method" from his right-hand man and adviser, Irwin Stelzer. Rupert Murdoch is one of the most notorious and successful businessmen of our age. Now, for the first time, an insider within the Murdoch empire reveals the formidable method behind the man. Irwin Stelzer, an adviser to Murdoch for 35 years reveals what makes Rupert tick and how he grew from humble beginnings as the owner of an Adelaide newspaper, to becoming the head of a globe-circling enterprise worth over $50 billion. But this isn't just a straight-forward business memoir. Rather, Stelzer explores what makes Murdoch so unique: whether that be down to his love of taking risks, his mistrust of the establishment, or his unconventional management style. Revealing what really happened during Murdoch's most infamous moments, Stelzer examines how Murdoch navigated both his success and his failures: including his tussles with regulators, his doomed foray into social media, his victories over trade unions, and how he handled the fallout of the News of the World phone-hacking scandal. Venerated, despised, admired and mistrusted, Murdoch has left an indelible imprint on the world of business, media, and politics. Read this engrossing account to find out how he did it.

CHAPTER 1

THE CORPORATE CULTURE

‘The psychological key to Murdoch is his capacity to continue to think of himself as an anti-establishment rebel despite his vast wealth and his capacity to make and unmake governments’ – Robert Manne, in David McKnight’s Rupert Murdoch: An Investigation of Political Power, 2012¹

‘I am suspicious of elites [and] the British Establishment, with its dislike of money-making and its notion that public service is the preserve of paternalists’ – Rupert Murdoch, 1989²

‘Throughout his [Murdoch’s] long career, he has fixed his gaze on an established competitor and picked away at its dominance … His … is … a broader grudge match against the toffs, the chattering classes, and the top drawer of society on whatever continent he happens to find himself’ – Sarah Ellison, Vanity Fair, 2010³

Never mind the composition of the Murdoch companies’ boards; never mind the organisation chart, if there is one; never mind any of the management tools that have been layered on the one thing that underpins the management of News Corp⁴ – its culture. All companies have cultures – a definable ethos, a style of thought, informal means of communication, systems of rewards and punishments. It doesn’t take a keen-eyed consultant to notice the difference in the cultures of, say, your local utilities and Google, or Facebook and General Motors. Or to notice that many of the companies in a particular industry have similar cultures; witness the distinctive dress styles and political outlook of many Silicon Valley executives, and the very different uniforms, even now, of most investment bankers and many lawyers.

Nowhere is a guiding culture as important a determinant of how a company is run as it is at News Corp. The managerial method that reflects that culture – the Murdoch Method as I have chosen to call it – has propelled the company from a single newspaper in an obscure corner of Australia into a multi-billion dollar media empire. That style, which has produced the good, the bad and sometimes the ugly, can best be described as arising from a rather unique view of the world: it is ‘them vs us’, we outsiders versus, well, just about everyone else, including ‘the elite’, any powerful incumbent that Murdoch selects as a competitive target, and most especially ‘the establishment’.

No matter that Rupert benefited from what even he must admit is an elite education at one of the finest prep schools in the world, Geelong Grammar, the ‘Eton of Australia’, which in later years he claimed he did not enjoy, ‘although I’m sure I had some happy times there – I was there for long enough’,⁵ and Oxford, which, judging from his later benefactions to Worcester College, he seems to have enjoyed.⁶ No matter how successful he has been, no matter the lifestyle that such success permits, Rupert continues to identify himself as an outsider – outside conventional cultural norms, outside the models on which other media companies are built, outside the Australian, British and (later) American establishments.

Definitions of the ‘establishments’ vary, some using the rather vague ‘its members know who they are’. Owen Jones is more specific: ‘Powerful groups that need to protect their position … [and] “manage” democracy to make sure that it does not threaten their own interest.’⁷ Perhaps the most useful for our purposes is Matthew d’Ancona’s definition of a member of this ‘caste’ as ‘the privileged Englishman: such an individual grew up surrounded by Tories, took for granted the fact that he would have homes in the country and in London … and inhabited a social milieu in which everybody knew everybody.’⁸ Rupert, owner of The Times, which media commentator Stephen Glover is not alone in calling ‘the newspaper of The Establishment’, believes the establishment inhibits social mobility, and will fight fiercely to retain its privileges. Sitting atop the establishment pyramid is the Royal Family, many of the members of which Murdoch often characterises as ‘useless’, and supporting the structure from the bottom are the deferential cap-doffers. Here is the way Rupert, invited to address the 750th anniversary celebration of the founding of University College, Oxford, hardly a rally of radicals seeking to ‘occupy’ the Sheldonian Theatre, chose to describe the virtues of the technological revolution in the world of communications:

You don’t have to show your bank statement or distinguished pedigree to deal yourself into a chat group on the Internet. And you don’t have to be wealthy to e-mail someone on the far side of the globe. And thanks to modern technology … you won’t have to be a member of an elite to obtain higher education and all the benefits – pecuniary and non-pecuniary – that it confers.

In this regard, Rupert is rather like all my Jewish friends who rose in the professional and business worlds in New York City despite (I rather think because of) an effort by ‘the establishment’ to keep us in our place. No amount of success can change our view of ourselves as outsiders even though many of the previously restricted clubs and apartment buildings are now officially, and in some cases actually, no longer off-limits. In Rupert’s case, it was first the Australian establishment that found him unacceptable because his father’s attacks on the Gallipoli campaign had been unwelcome reading for the powers that be in the government and the armed forces. Then, the British establishment would not accept an Australian interloper, especially one who published the irreverent Sun. Add to the establishment charge sheet against Rupert the rumours that he is a republican at heart, stifling his anti-monarchy views in deference to his mother and her memory, and aiming his media products specifically at those outside of the establishment, at men and (according to Rupert) women who deemed it harmless fun to ogle semi-clad girls in The Sun until that feature was dropped, who prefer sport to opera on TV, families that prefer to watch a popular movie to listening to some elevating lecture, and people who enjoyed the first-rate political commentary featured in The Sun. I was occasionally called upon to contribute the typical 600-word commentary, and the standards of exposition required of such political commentary and reporting on America were exacting indeed.

No matter that Page Three girls are gone, and that they were not introduced into the paper by Rupert. That feature, which passed its sell-by date a few years ago, was the invention of Larry Lamb, the first editor of The Sun. Rupert was in Australia when the first such photo appeared, and professed himself ‘just as shocked as anybody else’, although he later called what became a national institution ‘a statement of youthfulness and freshness’.⁹ Rupert’s mother undoubtedly disagreed, as she did with other features of the tabloid. In a widely watched television interview, she complained of his gossip columnists’ invasion of the privacy of the royals, celebrities and others who made it onto the pages of the Murdoch tabloids. To critics confronting him with his mother’s comments, a chuckle and ‘She’s not our sort of reader’.

No matter that Murdoch’s Sky Television offers significantly more ‘high culture’ programming such as operas than the establishment’s beloved BBC ever did: to the elites you are either ‘in’ or ‘out’, and Rupert, by his choice and theirs, most definitely is ‘out’, even though by ordinary metrics – wealth, power, influence – he most definitely is ‘in’.

In America, the old establishment quite rightly sees in Murdoch’s Fox News Channel a threat to its ability to control the political agenda and consensus, and in his New York Post an assault on its notions of propriety. Homes in Sydney, London, New York and Los Angeles, among other places, flitted to and from by private jet, possession of a beautiful yacht and other trappings of great wealth cannot change Rupert’s vision of himself as an outsider opposed to and at times reviled by a ‘them’ that he believes to be impeding economic growth with their sloth and aversion to innovation, and upward mobility by their snobbery and dislike of ‘new money’. For a child of a child of the manse, imbued with a demanding work ethic, it is perfectly consistent with material success to retain the outlook of an outsider, especially for an Australian-born mogul, raised in ‘an unofficial culture imbued with … hostility towards the country’s class society and snobbery. Above all, Australian culture … celebrated the ordinary citizen, opposing the elite.’¹⁰

That the culture of the Murdoch enterprise has deep Australian roots there can be little doubt. Rupert puts it this way: ‘Our Australian company … will always be the cultural heart of what we are – adventurous, entrepreneurial, hard-working and with a special loyalty and collegiality in all that we do.’¹¹ His eldest son, Lachlan, echoed that sentiment years later: ‘An Australian influence nourishes the family, even in the States ... I have got to say that I love both countries deeply, and they are both an essential part of my identity.’¹² To which his father added, ‘I share my son’s sentiment.’¹³

The Murdochs’ pride in their Australian heritage exists despite Sir Keith Murdoch’s constant battle with the establishment there over his decision to publicise the senseless slaughter of Australian soldiers at Gallipoli. Then a young reporter, Keith defied military censorship while reporting on the First World War Gallipoli campaign, the Allies’ failed attempt to knock Turkey out of the war by seizing control of the Dardanelles and capturing Constantinople (modern Istanbul). Keith Murdoch drafted what is now the famous Gallipoli Letter, laying out in vivid prose and great detail the mismanagement of the campaign by British officers selected on the basis of their social standing, the poor morale of the troops and the unnecessary waste of young lives.¹⁴ He delivered it to the Australian prime minister and to Britain’s minister of munitions, David Lloyd George, who passed it on to Prime Minister Herbert Asquith, all in violation of Keith’s signed agreement ‘not to attempt to correspond by any other route or by any other means than that officially sanctioned … [by] the Chief Field Censor’. The result was the sacking of General Sir Ian Hamilton as commander of the Allied Mediterranean Expeditionary Force, the removal of Winston Churchill from the Admiralty and, soon after, the withdrawal from the Dardanelles of Australian and other Allied troops, but not before suffering 142,000 casualties, 28,000 of them Australian. Of the 44,000 killed, 8,700 were Australian,¹⁵ this in a country of under five million at the time. The United Kingdom, with almost ten times the population of Australia, took fewer than three times as many casualties. That Aussie casualty rate, the result of poor leadership, proved to Rupert that his father had done the right thing, and that the criticism of him was unjust. Some sixty-six years after his father’s letter was published, Rupert funded Gallipoli, a movie set on the Anzac battlefield, graphically illustrating the futility of the campaign. It won the award for ‘best film’ and numerous other ‘bests’ from the Australian Film Institute. Murdoch family ties run deep and long.

Rupert styles himself not only an outsider, but also a revolutionary. In his student days, he kept a bust of Lenin in his rooms at Oxford, rooms that were ‘one of the best rooms in college – the De Quincey room’.¹⁶ He dismisses such behaviour with ‘I was young and even had other hare-brained ideas’.¹⁷ My guess is that the episode was not due to the mere youthful innocence of a university student, but was aimed at upsetting the British establishment.

The list of establishment insiders includes a number of formidable enemies, whom I shall describe in terms that I believe capture Rupert’s attitudes. First on the list are the trade unions and their resistance to technological progress and sensible staffing. He jousted with the unions early on in Australia, won them over to his side in Britain when they supported his acquisition of The Sun and the News of the World as a superior alternative to his rival, Robert Maxwell, and then more or less destroyed them on the battlefield of Wapping. If you are a union leader of printers and related crafts, or merely a trade unionist who watched as Murdoch took on and defeated the print unions in Britain, you see him as evil incarnate. Rupert probably won no friends in the UK when he compared the Australi...