According to David Carr's latest Media Equation column, the former New York City schools chancellor and current News Corp. executive first officially encountered Rupert Murdoch about fourteen years ago, when he was running the Justice Department's antitrust division in Washington. And, while there's not exactly evidence that anything unseemly went on, it does shed a new light on Murdoch's recent announcement that Klein, a lawyer by training, had been assigned the task of “provid[ing] important oversight and guidance” in the investigation of the News of the World scandal while “keeping News Corporation’s board fully advised."
Apparently, back in 1997, News America Marketing, a highly profitable division of News Corp. that deals mostly in the coupon business (and now controls 90 percent of that market), announced its intention to buy Heritage Media, a major competitor. The proposed purchase drew the attention of the San Francisco office of the Justice Department, which suggested to its counterpart in Washington that the deal be challenged on antitrust grounds, a move that would usually tie things up for months. Instead, the takeover was approved within two weeks.
None of this suggests that Mr. Klein cut some sort of a deal that resulted in a job 14 years later. But the speed of the antitrust decision surprised even the people involved in the takeover. One of the participants, who declined to be identified discussing private negotiations, said he thought the sale was effectively blocked before the surprising turnaround.
“After that meeting with the San Francisco office, we all looked at each other and said, ‘This deal is not going to happen,’ ” he said.
My colleague Eric Lipton and I spent a few days trying to tease apart who made the actual decision to give the purchase the go-ahead — “It was as if a magic button had been pushed somewhere. We were all in shock,” said one of the same participants in the deal — but there is no paper trail.
Carr is careful to point out that in that same year, antitrust concerns led the Klein-led Justice Department to prevent News Corp. from selling its stake in the satellite company PrimeStar. And a News Corp. spokeswoman told him, "Joel didn’t know Mr. Murdoch at the time of the Heritage Media transaction 14 years ago ... Any suggested inference is ludicrous.” Either way, the episode does seem to support the notion that, when it comes to the halls of power — whether they be American or British — News Corp. has a long record of (mostly) outmaneuvering them all.