When Rupert landed in London on July 10, NotW had published its final edition—but closing the paper was an act of desperation. That week, Parliament was preparing to vote against News Corp.’s $12 billion BSkyB bid, which would be a humiliating defeat to Rupert, but especially to James.
If News Corp. hadn’t bought Elisabeth’s company, she would have essentially been an observer. But now she had a stake and as much right to hold her brother and Brooks accountable as anyone. So, on July 12, she arrived at Wapping, News Corp.’s fortresslike headquarters on the banks of the Thames. The tenth-floor executive offices were, at that point, more war zone than war room. “The place was going nuts,” one executive recalls. On one side of the floor, James spent the morning huddled in his office, with its life-size Darth Vader statue outside the door, drinking coffee and Diet Coke. “You weren’t in control of events,” one person close to the talks recalls. “We had no idea what was happening. The stories kept breaking all around us.”
The previous afternoon, the Murdochs had gathered for a family summit. Lachlan, the eldest son, who’d given up his operational role in News Corp. in 2005 after a clash with Roger Ailes, was flying in from Sydney on Wednesday. The family agreed that no decisions regarding the resignations of Brooks or former News International CEO Les Hinton—or James—should be made until then.
But when she arrived at Wapping, Liz had changed her mind. She marched into Rupert’s office and told him that Brooks should step down and James should take a leave, for the good of the company. But Murdoch, in the habit of making up his own mind, and in any event not in the habit of taking advice from Elisabeth, demurred. “I don’t throw people under the bus” is how he later put it.
“Rupert was protecting Brooks at all costs,” a person close to Rupert says.
At one point, according to multiple sources close to the family, Liz told James to his face that he should step down, but she got essentially the same response.
The series of meetings recapitulated her earlier anger at the family business, when she was ignored by her father and overshadowed by her brothers, frozen out of the big decisions. “She wasn’t being listened to,” one executive in the room recalls. The sense of being stifled by her father, of being passed over by her brothers, was deeply familiar. What happened that day was ultimately more about Murdoch-family dynamics than about business. “There was a lot of tears,” a senior News Corp. executive says. “It was very tense.” Finally, Liz stormed out.
In the meetings that afternoon, Liz was alone, the odd woman out. But in her struggles to claim her place in her family, she has a powerful ally, one who is in many ways as bold, iconoclastic, confrontational, gossip-loving, and deeply wired as her father: her husband, the PR executive Matthew Freud. Freud, a great-grandson of Sigmund Freud, has been Liz’s defender and private counselor, guiding her through the maelstrom. Freud runs a London-based PR firm—clients include PepsiCo CEO Indra Nooyi; Sony CEO Sir Howard Stringer; the 2012 London Olympics; and Liz’s company, Shine, but his business cannot be summed up by a client list. He was the prime mover in the Murdoch era of London that’s just ended, connecting media (not only News Corp.), Downing Street, and the celebrity world in one glamorous, monetizable scrum. And, most impressively, he accomplished this while being in conflict with large swathes of the Murdoch family and entourage—around the company, he’s been referred to as Matthew Fraud. Politically liberal where Murdoch is conservative (Elisabeth even held a 2008 London fund-raiser for Obama), Freud has taken potshots at the right flank of the News Corp. empire. “I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes’s horrendous and sustained disregard of the journalistic standards that News Corporation, its founder, and every other global media business aspires to,” he told the New York Times in 2010. But Freud has also been known to take on Murdoch enemies. According to the Daily Mirror, when Hugh Grant, England’s most committed opponent of phone hacking, deployed the C-word at him at a London society party last year, Freud attacked Grant’s white shirt with a slice of chocolate cake.
Inside News Corp., Freud is a complicated figure and a subject of much heated discussion. After his attack in the Times, Liz apologized to Ailes. But the current imbroglio makes Freud’s role even more complex. Senior executives believe it is Freud who has encouraged the negative press coverage against James. Rupert is said to openly loathe him, and relations between Freud and Rupert have gotten so bad that the two don’t even speak. But, as much as Rupert dislikes Freud’s tactics, he has so far resisted the urge to openly challenge him. “Liz is Freud’s human shield,” a media executive who knows all the players tells me.