The Freud quote was not the first time in recent memory that Murdoch had choked on his morning Times. On June 10, 2007, Murdoch opened the Gray Lady to read an editorial about his planned takeover of the Journal. “Frankly,” the piece intoned, “we hope the Bancrofts will find a way to continue producing their fine newspaper, or, failing that, find a buyer who is a safer bet to protect the newspaper for its readers.”
Murdoch was infuriated by the editorial, which he saw as yet another example, as if more were needed, of the Times’ characteristic self-interest wrapped in a cloak of high-toned moralism. The previous night, he had run into Times chairman Arthur Sulzberger Jr. at a party on Barry Diller’s yacht, and Sulzberger had assured him the piece wasn’t “faintly anti-Murdoch,” as Sarah Ellison reports in her upcoming book, War at the Wall Street Journal. Murdoch wrote Sulzberger a personal note the next morning that concluded: “Let the battle begin!”
The next day, Sulzberger was sitting in his office at the Times Building with Richard Beattie, the chairman of law firm Simpson Thacher, who had advised the Dow Jones board during the Journal deal. Sulzberger pulled out Murdoch’s note. “He was laughing at the time,” Beattie told me. “He thought it was cute.” Sulzberger never replied to Murdoch’s letter. When I called Sulzberger to ask about the competition with the Journal, he dismissed my question out of hand: “Whatever,” he said.
“I’ve given a quote to the New York Times, and you’re probably not going to like it.” — Murdoch's Son-in-Law Matthew Freud
Murdoch had coveted the Journal for as long as anyone close to him could remember, and he stalked it through the middle of the last decade, even when it became clear that the newspaper industry’s fortunes were in an irreversible spiral. Some see an Ahab-like obsession in Murdoch’s pursuit of the Times. “[Buying the Journal] was the worst deal he ever did. It never made sense,” a former senior News Corp. executive says. “He had no justification for why he should buy it—he just wanted it.”
Financially, the $5 billion acquisition couldn’t have been worse. Last year, News Corp. announced it was taking an embarrassing $3 billion write-down on its newspapers, effectively suggesting it overpaid for the Journal by half. But for Murdoch, financials are always facts to be managed, rationalized by other means. Building the Journal into a general-interest newspaper to take on the Times is a crusade. Arthur Sulzberger himself is, for Murdoch, a symbol of the Times’ hypocrisy, its smugness, and its shortcomings. Murdoch’s hatred of the Times is a product of his long-standing class antagonisms rooted in his early days as an Australian building an empire in London. But on a more fundamental level, he believes Sulzberger is a poor businessman who has mismanaged his company’s fortunes and deserves to lose.
Robert Thomson, whom Murdoch installed to run the Journal in May 2008, shares the belief that American journalism in general, and the New York Times in particular, is hidebound and decadent. “There are two personnel moves at the New York Times that I think make them vulnerable,” Thomson tells me. “One is Mr. Sulzberger remains in place. And the second is that Howell Raines lost his job. Because whatever Howell Raines’s sins were, he was clearly a reformer. And he was prepared to confront the journalistic elite at the paper and bring the New York Times into the modern ages. That process really stopped when Howell left.” (Raines’s successor, executive editor Bill Keller, declined to comment for this story.)
About a decade ago, Thomson and Murdoch had become close. They are both married to Chinese natives, and the couples vacation together on Murdoch’s yacht. In 2001, as a top editor at the Financial Times, Thomson was passed over in his bid to run the paper. He felt betrayed and quit the FT five months later to work for Murdoch as editor of the Times of London.