Supplementary Material: News Corporation

```
This Page Is Currently Under Construction

```

*The furious mudslinging between two titanic media figures—Rupert Murdoch and new Time Warner vice chairman Ted Turner—over Time Warner's refusal to carry Murdoch's Fox News challenge to CNN, obscured the true nature of their game. Behind the personal attacks, KIM MASTERS and BRYAN BURROUGH discover, was a deadly serious battle about money and who controls the future of 24-hour news*
The key moment came in late August as executives at Time Warner's cable division in Stamford, Connecticut, were wrapping up negotiations with both Rupert Murdoch and NBC. Murdoch, who last spring flipped the economics of cable television on its head by offering to pay cash up front to any operator that would carry Fox News, had more than doubled his earliest proposals and was offering to pay Time Warner a breathtaking $125 million, or $25 per initial subscriber, to broadcast his new network on its October 7 debut. MSNBC's offer was almost as compelling.
In a perfect world Levin might have rejected both offers, thereby weakening CNN's two competitors. But Time Warner was being forced to take at least one of the new networks: the Federal Trade Commission had made carrying a competing all-news channel a condition of approving the Time Warner–Turner merger. But instead of choosing the highest offer, insiders say, Levin was backing the surprising play of his cable chief, Joe Collins, who wanted to broadcast both new networks. Everyone, it seemed, would be happy. Murdoch would get his splashy Manhattan debut, MSNBC would extend its national reach, and Time Warner would get a healthy injection of badly needed cash.
The only potential hang-up was Turner, who aides say had been excluded from the negotiations on the advice of Time Warner's antitrust attorneys, who were worried about alienating Federal Trade Commission regulators in Washington. A few days before the Labor Day weekend, Levin called Turner in Atlanta. According to an executive with direct knowledge of the conversation, Levin seemed excited. "Jerry was like 'Oh my God, isn't this a great deal? We can get all this money,'" says this executive. But if Levin expected Turner to share his excitement, he was disappointed. Turner was dumbfounded. Not only were Fox and MSNBC taking dead aim at CNN, he pointed out, they were handing over precious channels which Turner hoped to fill with several of his own new networks. "Ted was railing at him," the executive recalls. "He's basically saying, 'It's crazy, you don't want to carry both. You're not taking the long-term view…' He's not swearing, but he can't help himself. [He tells Levin], 'It's going to hurt the long-term value of CNN.' Plus it would delay the rollout of Turner Classic Movies and delay the Cartoon Network. All while you shoot CNN in the figurative dick. Jerry says, 'Gee, Ted, I don't agree with you.' But they kept negotiating and eventually he agreed Ted was right."
Levin was then faced with a tough choice: Fox or MSNBC—a choice that forced him to extricate himself from the dangerous corner he had painted himself into. Expecting to take both services, Levin had allowed both Murdoch and MSNBC to believe they already had deals with Time Warner. So, whatever Levin did, someone was going to be very, very angry: Turner, Bill Gates and NBC owner General Electric's chairman Jack Welch, or Rupert Murdoch—or, worse, all of the above. In the end, after a tortured analysis, it was Murdoch alone who got the bad news, and on that rainy evening in mid-September, Levin broke it to him in person.
The next morning Murdoch declared war.
No matter which kind of box delivers the information superhighway to homes in the next century—a television, a personal computer, a network computer, a cable box, some kind of set-top hybrid—a cornerstone of its foundation will be news. News you can use, news at your fingertips, news you can call up at midnight or noon. And in every corner of every major media conglomerate, telephone company, and computer outfit, every CEO knows it. And wants to own it. Ted Turner. Rupert Murdoch. Michael Eisner. Bill Gates. Jack Welch. Sumner Redstone. John Malone. Jerry Levin. Mike Bloomberg. Each has thrown his chips behind an entrant in the race to field an all-news outlet that will blossom and endure into the 21st century.
Until the last few months, of course, the field was owned by CNN, the bland home of stern, robotic anchors whose chronically low ratings spike up only at times of international crisis. Even inside Turner Broadcasting, there have been rumblings about CNN's never fulfilling its promise. Long mocked as the "Chicken Noodle Network," it was the brainchild of a man who once enlivened news coverage by putting a dog with peanut butter in its mouth on camera while the stories were read offscreen. The network, which was started in 1980, got its break when Saddam Hussein invaded Kuwait in 1990. Ratings soared. But in the wake of the Gulf War, CNN "has never gone to the second stage of the rocket," admits one Turner insider. What talent it has discovered—Catherine Crier, Hannah Storm—it has largely failed to retain. Never was its vulnerability more apparent than last summer after the crash of TWA Flight 800 in the Atlantic Ocean off Long Island. MSNBC, barely two days old, beat CNN with the news by eight minutes and had a helicopter on the scene with the first live pictures of the wreckage. CNN's coverage was ultimately more comprehensive, but the point had been made.
The three major networks, faced with high news costs and flagging ratings on evening shows, have pondered ways to field a competitor to CNN for years. Roone Arledge got a joint ABC-Westinghouse news channel up and running in the early 1980s, but gave up in the face of steep losses and sold it to Turner in 1983. In the mid-1980s, NBC was on the verge of launching a cable news channel when Turner called in a favor from John Malone, the nation's most powerful cable magnate, who blocked NBC's plans by refusing to carry the new service. Other plans routinely died on the drawing board, unable to get by the daunting combination of massive startup costs and meager ratings.
In 1995 the wolves again approached Turner's door. This time, ironically, it was not a newsman but a computer visionary who set the race in motion. Out in Redmond, Washington, Bill Gates realized the importance of news early on. In May 1995, Gates invited Turner to Seattle to discuss a partnership. What Gates wanted was a source for filmed news which he could place on the Microsoft Network or the Internet for subscribers to download at their leisure. Ostensibly, Turner sought Microsoft's expertise in crafting the first major interactive news network. In fact, what Turner really wanted was cash—enough to buy the television network he had been salivating over for years, CBS. During a lunch of cold salmon at Gates's mammoth dream house on the shores of Lake Washington, the two men banged out a deal in which Gates would pay $1 billion for stock in Turner Broadcasting, free access to CNN, and half of any revenues the two generated from interactive news.
The deal was dead by Labor Day after one of Turner's top executives told him, "You're about to sell the future of CNN—for $1 billion." Turner thought a moment and agreed. "You're right," he said. "That's a bad deal."
The Microsoft talks hadn't kept Turner from meeting with an array of other potential merger partners, including Jerry Levin of Time Warner and GE's Jack Welch, who controls NBC. The talks with Welch nearly led to a merger, until Turner realized, after a January 1995 meeting at Atlanta's Ritz Carlton hotel, that Welch had no intention of allowing him any meaningful continuing involvement in CNN. "It went really far," says an executive involved in the talks. "But Jack Welch doesn't like Ted and dissed him. They flew to Atlanta [and] made a very insulting business proposition. They were trying to extinguish him. Ted looks at them, laughs, and says, 'Sorry,' and walks out." (An NBC spokesperson declined comment.)
But in these myriad merger talks lay the stirrings of the first real challenges to CNN. When his talks with Turner fell through, Gates called Welch to inquire about a partnership with NBC. In October, Tom Brokaw described NBC's vision for a new cable network to Gates via speakerphone from Washington, and both sides realized that whatever network they created could also be accessed via the Internet. MSNBC was born. The deal was especially sweet for NBC. In return for commitments from Brokaw and other anchors to appear on the new channel, Gates bankrolled nearly everything. Microsoft paid $220 million, a sum that virtually covered NBC's entire $250 million investment in MSNBC. Best of all, NBC had already lined up cable operators to broadcast its lackluster America's Talking cable network to more than 20 million homes; a simple switchover to MSNBC all but eliminated the major hurdle faced by every new cable network, prying its way onto systems with no room for new channels.
"Gates made this happen for us," says Andrew Lack, the president of NBC News. "Without him, I'd still be talking about a 24-hours news service [instead of broadcasting one]."
Just as NBC was set to announce its new network in December 1995, ABC's Bob Iger launched a preemptive strike. Hearing NBC's footsteps, Iger and news division chief Roone Arledge had secured approval for ABC News's own cable network from Michael Eisner, the Disney chief, who had just taken control of ABC that summer.
On December 5, as rumors of MSNBC's debut swirled, Iger and Arledge struck first, announcing the formation of a network, tentatively called 24 Hours (but code-named "Fred" inside the network), at a Manhattan news conference. The ABC execs, notably short on details, brushed off reporters' questions about how they planned to persuade cable operators to carry the new network. "I thought we could just put this great brand name out there and people would come," Iger admits today. "Looking back, it was an incredibly arrogant position for me to take."
Over at NBC, Andy Lack seethed. "I could tell what they were doing," the affable NBC News chief says. "I felt like I was sitting in a fancy restaurant and someone just spilled the pea soup on me. It did strategically take some of the bloom off the rose that they knew was just about to flower. But I also knew, when I saw the press conference, that they didn't have a network. They only had a press release. They basically said they have no distribution. To enter the cable wars without distribution is like saying, 'Look, you're going to have the finest meal ever eaten. We don't have a kitchen, but . . . ' They had no place to cook it." NBC and Microsoft followed suit with a press conference of their own nine days later, just hours after Welch and Gates had personally sealed the last details after a frenetic night of negotiating.
Even as the two major networks settled into the blocks, there was talk that still another entrant was poised to enter the race: Rupert Murdoch's News Corporation.
It was a supreme irony that the company named after news didn't have any to speak of, at least at the Fox network. The notoriously conservative Murdoch, who had been openly critical of what he called CNN's liberal slant, had been trying to assemble an American news operation for years. In 1992 he had hired a former president of CBS News, Van Gordon Sauter, and given him a mandate to create a national news organization. Sauter came up with a short-lived newsmagazine show and little else. He was gone inside of two years.
In January 1996, Murdoch hired Roger Ailes, the rotund Republican media consultant who had just left the helm of NBC's two cable channels, CNBC and America's Talking, and assigned him the task of creating a 24-hour cable news network. Ailes was skeptical at first—"I was concerned about the false starts," he acknowledges—but signed on when Murdoch assured him he was serious. No one else was convinced. "Murdoch has been announcing… a domestic news operation every year for four or five years now, it seems," says Andy Lack. Adds an MSNBC executive, "We thought Murdoch would be a disaster."
Down in Atlanta, meanwhile, Ted Turner did his best to feign indifference toward his challengers, but Murdoch's criticism of CNN's political slant clearly got under his skin. "I'm looking forward to squishing Rupert," Turner told an audience of cable executives, "like a bug."
All three new networks now confronted the challenge of what media executives call "distribution." For all the talk of 500-channel televisions, most cable systems still have only 50 or so channels, and with few exceptions every single one on every single system is filled. New cable networks are thus forced to line up and beg for space. "Distribution is the name of the game," says Ailes. "There's a ritual dance with cable operators. They don't want you, they don't want your service, they don't want your phone call…they never want to hear from you again."
MSNBC and ABC devised traditional high-road strategies, promoting all the big names—Jennings and Gumbel and Sawyer and Couric—they were bringing to cable's starless universe. Murdoch and his broadcasting chief, a dashing Harvard MBA named Chase Carey, came up with an earthier incentive: cash. Normally, it's the cable operators who pay the networks a "subscriber fee" of a nickel or so per subscriber to carry the likes of HBO and CNN. Murdoch turned that idea on its head. Paying for space wasn't entirely without precedent; in the past, programmers had paid a million or two here and there to cover marketing costs. But in April, at the National Cable Convention in Los Angeles, word spread that Murdoch's men were willing to pay an astounding $10 per subscriber, which translated to $50 million for a good-size region of 5 million subscribers. "We had to put something on the table to grab the attention of the cable operators," says Carey.
The news floored MSNBC executives. "We got scared," admits one. "When they announced it, we said, 'Holy shit, this is a ton of money. If they can put together a compelling programming lineup, and by the way they're going to give you money, then we have a problem."
But the news hit even harder at ABC. In February, Roone Arledge had raided NBC to hire Jeff Gralnick, executive producer of Tom Brokaw's *Nightly News*, to head "Fred," which was shaping up as what MSNBC ultimately became: talk radio on television, heavy on the newsbreaks. That spring Gralnick's little group busied itself laying out programs and scouting talent; its first coup was a deal-in-the-making to simulcast radio personality Don Imus's morning show, a deal MSNBC ultimately made. (Imus, in fact, is MSNBC's most popular show.) By early May, Gralnick had signed a lease on the new network's headquarters, a two-story office building in Florham Park, New Jersey, a half-hour west of Manhattan. But the day after the lease was mailed, Gralnick was summoned to Arledge's office to receive stunning news: ABC was quitting the race.
Iger, now Michael Eisner's No. 2 at Disney and delegating the ABC duties he still had as titular head to others, and Eisner himself had made the call. Over a weekend in early May, the two men reviewed the numbers in light of Murdoch's cash payment strategy. The future looked grim. Eisner asked Iger whether he would urge his board to proceed with the new network if he were CEO. "I said, 'No, not based on what I now see,"' Iger recalls. "He said, 'I guess you've made the decision.'"
ABC's withdrawal narrowed the race to two: MSNBC and Fox News. Executives from both networks spent the spring and early summer scurrying from cable operator to cable operator attempting to strike deals for channel space. MSNBC reeled in a series of small fish, but it was Murdoch who harpooned the whale: Malone. In June, Murdoch and Malone struck a deal in which Malone's TCI—the nation's No. 1 cable system, with 14 million subscribers—agreed to furnish Fox News with 10 million initial subscribers in return for a cash payment of $200 million, or $20 per subscriber, and an option for a 20 percent equity interest in the new network. This deal alone ensured that Fox News would have enough distribution to be viable. "We never even really got into serious negotiations with Malone," admits an MSNBC executive. "Rupert took them off the table."
Buoyant after his victory, Murdoch and his men set their sights on the nation's No. 2 cable operator, Time Warner. Jerry Levin's systems covered 17 percent of the country's cable-watchers, but one of the properties, in particular, was the crown jewel: Time Warner's New York City Cable Group, the key to Madison Avenue. Murdoch's wooing of Time Warner began in early June, when Levin and Richard Parsons, Time Warner's president, crossed the Avenue of the Americas to Murdoch's midtown New York headquarters. Over lunch in Murdoch's private dining room, the News Corporation chief and Chase Carey emphasized the importance they placed on Manhattan and suggested that, whatever happened, the two conglomerates not let it interfere with the many other projects they were working on together. Time Warner programming, after all, needs Murdoch's satellite services to reach Europe and Asia. In a followup letter, Murdoch reminded Levin that he was willing to pay cash to get Fox News on as many systems as possible.
Levin's point man on the negotiations with Murdoch was Fred Dressler, a 55-year-old vice president at Time Warner Cable who serves as gatekeeper to any and all networks who want to broadcast on Time Warner systems. Dressler, a wiry, energetic man with a receding hairline and tiny hands, wasn't wild about either MSNBC or Fox News. He had run into Ailes at the National Cable Convention and asked what his new network would look like. "I'm not going to tell you," Ailes said. "It's a news channel. That's all you need to know."
"What kind of deal are you offering?" Dressler asked.
"I'm not ready to talk to you," Ailes shot back. "When I am, I'll call." The exchange left Dressler cold. "Murdoch's attitude," says Dressler, "was 'You don't need to know what we're giving you. Just take the money and shut up.'" Nor was Dressler all that excited about the prospect of Murdoch's cash. Yes, the cable operator got money up front, but it still had to pay subscriber fees to Murdoch over time; eventually those fees would outstrip the cash advance. And while most fees were in the range of a nickel per subscriber per month, Murdoch had demanded and reportedly received a whopping 25 cents per subscriber from Malone to carry FX, his other cable channel. Dressler suspected that Murdoch's cash offer masked a huge "backend" as well.
Dressler had even more problems with MSNBC. From the moment he agreed to broadcast America's Talking in 1993, Dressler, who had a host of ongoing disagreements with NBC, had suspected that NBC ultimately intended to morph it into a news channel, and had written the contract with America's Talking to explicitly prevent that. When MSNBC's lead negotiator with cable operators, David Zaslav, phoned, Dressler told him there was no way NBC could alter the America's Talking contract. Zaslav was steamed. Though Time Warner grudgingly consented to broadcast MSNBC in Manhattan at its mid-July debut, Dressler reminded him that he could yank it at any moment if the two companies' issues weren't resolved soon.
Dressler's talks with Murdoch's men, meanwhile, were moving forward nicely. Ailes and Carey continually emphasized the importance of Manhattan, and despite his ritual moaning about the difficulty of bumping another channel, Dressler appeared amenable. During a meeting at Time Warner headquarters, he suggested the possibility of jettisoning a pay-per-view channel. Says Ailes, "It was clear there was not a capacity issue. This was a deal issue. As we walked to the elevator, Chase and I looked at each other and said, 'This looks pretty easy.'"
And therein lay one of the race's great ironies. That Murdoch—the arch-conservative bane of liberals everywhere—was able to get in the door at Time Warner was due in large part to a surprising bit of help from the Clinton administration.
That June, the Federal Trade Commission was inching into the ninth month of its mammoth review of the proposed Time Warner–Turner merger. The deal was an antitrust regulator's nightmare. Most worrisome was the escalating power it would bestow on John Malone, who as Turner Broadcasting's largest shareholder would become the second-largest shareholder (behind Turner) in the combined company. There were a slew of other concerns. Time Warner, for instance, which already owned strong franchises in such cities as Houston and New York, would now be in a position to grant dwindling channel space to a host of existing and proposed Turner networks at the expense of competitors' channels. Still, few in Washington believed the famously gun-shy FTC would do anything so radical as block the merger. Instead, the new FTC chairman, Robert Pitofsky, a Georgetown law school professor who had written extensively on media concentration, was trying to tinker with it. Already Pitofsky's people had attempted to contain Malone's influence by inserting a provision into the merger agreement preventing him from voting his shares.
In the early summer, as Murdoch began talks with Time Warner, word spread that Pitofsky was considering an unprecedented move: forcing Time Warner to carry a news channel that competed head-to-head with CNN. Public interest groups quickly realized that the obvious beneficiary of such a move would be either MSNBC or Murdoch's Fox News, which had struck a deal with Malone. "We told Pitofsky that this clever idea of promoting an all-news channel was going to backfire," says Gene Kimmelman of Consumers Union. "[And] the fact that Malone could be a beneficiary of this deal was just the icing on the cake." By imposing a requirement that could help Murdoch's network, the Clinton administration would also be seen as nurturing a right-wing news channel in its cradle, giving a gift to men like Murdoch and Malone, who had spent heavily to install a Republican Congress.
Into this intricate debate on July 15 stepped NBC CEO Robert Wright. In a routine press conference announcing MSNBC's debut that day, Wright stunned reporters by casually passing on the rumor that Murdoch was about to cut a major distribution deal with Time Warner. Wright's off-the-cuff remarks were interpreted as a shot across Jerry Levin's bow—MSNBC still couldn't get in the door at Time Warner—and also as a wake-up call to the FTC and the White House. In Washington, Pitofsky went ahead and inserted the requirement, according to Washington insiders, after heavy lobbying from NBC attorneys. (Richard Cotton, NBC's general counsel, denies this.) Once Pitofsky's decision seemed set, one faction of public interest lobbyists urged him to take the unlikely step of blocking Murdoch from the slot the FTC was opening on the Time Warner cable system. "The response was 'We can't touch that,'" says one lobbyist. "They said they had to be 'content-neutral.'"
It was now clear that Time Warner would be forced to carry at least one of the new networks. His hands tied, Dressler narrowed the field of contenders to two and consented to a meeting with MSNBC's David Zaslav. The situation between Time Warner and NBC remained complicated and tense. Dressler continued to insist that NBC was breaking its contract by transforming America's Talking into MSNBC. Zaslav decided to play hardball.
"If you don't keep it, we're going to be in court, and in my book we win that lawsuit every time," Zaslav warned Dressler. Every other major cable operator had allowed him to switch to MSNBC: how would it look, Zaslav argued, if the owner of CNN was the only one who balked? "And if we get into that war," Zaslav added, "you have problems. We could yank NBC. Then we're in a war over whether your subscribers get to see Seinfeld and football, and we're in a major pigfuck." On the other hand, Zaslav argued, "you already have a deal with us; if you simply keep that deal, you're going to meet your FTC requirement." It was a persuasive argument, and by mid-August, Zaslav was telling his bosses he was confident they would have a deal for MSNBC to run in Manhattan.
The negotiations between Time Warner and Fox continued despite Dressler's irritation with Murdoch's steamroller style. "The way Rupert Murdoch negotiated is 'Here's the deal I did with John Malone, take it or leave it,'" says Dressler. Still, Levin had talked with Murdoch in mid-July and assured him there appeared to be no problems. Fox presented a proposed agreement to Time Warner on August 13, after which Dressler gave the Fox negotiators the impression that they had a "done deal." Murdoch's men were growing nervous nevertheless. Not only were they approaching their October 7 launch date, but they had glimpsed MSNBC negotiators in the hallways at Time Warner. Don't worry, Dressler emphasized; closing a deal with Fox News was Time Warner's second-highest priority behind closing the Turner merger. Murdoch himself remained calm. "Rupert felt that Jerry had told him it was fine, and it was going to be fine," says Roger Ailes. "He said, 'We have a deal. Levin gave his word.' " (A Time Warner spokesman says Levin didn't give his word.)
In fact, Time Warner was expecting to make everyone happy. Dressler and the chairman of Time Warner Cable, Joe Collins, were planning to take both new channels. The risks of yanking MSNBC were too great; they could be in court for years. And for all their fretting about Murdoch's steep "back end" fees, $125 million in cash would give Collins his best quarter in years—never mind the damage the two new channels would do to Ted Turner's beloved CNN. "[Collins] was not incentivized [to help Turner]," says an executive involved in the talks. "That's the problem with the culture there." Adds a Turner insider, "Every division is looking out for what's best for that division."
By August 30, Dressler was on the verge of signing agreements with both networks—"within a half-hour," says a Fox executive—when Time Warner's lawyers intervened. They asked that he put off finalizing the contracts until after the FTC approved the Time Warner–Turner merger. "This was about appearances," explains a Time Warner executive. The FTC needed the situation to appear as if it were forcing Time Warner to carry a second news channel. "If [we] do the deal before they rule," says Dressler, "it looks like they're coming to the table with an empty sack." Neither MSNBC nor Murdoch was happy with the delay. "We were all nervous that we were getting bullshitted," recalls Ailes.
Dressler says he began to have second thoughts about taking both channels right after Labor Day. During August his station managers and field representatives across the country had beseeched him not to do it; bumping two existing channels, whether it was the Weather Channel or the Food Network or some obscure ethnic network, would inevitably lead to howls of protests, no matter who was displaced. Then, in late August, TCI announced that it was dropping a number of networks around the country, including Lifetime, a network directed at women, to begin broadcasting Fox News. Malone's decision was met by a groundswell of anger from women's groups and several prominent legislators. "Women kind of feel like they're being rolled over so that guys who run these companies can make more money," declared Representative Pat Schroeder.
This was too much for Fred Dressler. Taking both news channels, he says he realized, "would have been a public relations disaster—we would have been fighting in every community we're in." He says he went to Collins, who reluctantly agreed to the idea of taking just one. If they had to choose, MSNBC was clearly the better deal. Not only did it eliminate the need to bump existing channels, it also erased a serious legal threat. Besides, because of Murdoch's "backend" payments, the deal with NBC was far cheaper over the long haul.
When Collins and Dressler called Jerry Levin, Levin quickly agreed that it made sense, as he put it, to "stand down" on talks with Fox News for the moment. They would go with MSNBC. Levin pointedly failed to mention the issue of Turner's opposition to taking both networks. "Obviously, Ted doesn't have any love lost for Rupert, but this was not about personalities with Ted," insists a senior Time Warner executive who spoke with Turner. "[This was about] Ted wanting to get CNNSI [a new sports network], Turner Classic Movies, and the Cartoon Network on." Adds another Time Warner executive, "[Ted] didn't really give a shit about Fox or Jack Welch or Bob Wright; despite the fact he yells about Murdoch, he didn't really care who we chose. Remember, this is a guy who a year ago was yelling that Jerry Levin was giving him a clitorectomy."
"First Ted's view was we shouldn't put anyone on, but we get this FTC thing," says the executive who spoke to Turner. At various times Turner suggested they could fulfill the FTC dictate by carrying the BBC or even Bloomberg Information Television. Neither idea flew. "So he says, 'Maybe we shouldn't do anything till next year,'" this executive continues. "But we couldn't wait."
Neither could Murdoch. Fox News was scheduled to debut in less than a month. And so, on Dressler's suggestion, Levin crossed the rainy Avenue of the Americas one last time to give Murdoch the bad news. "I said to Jerry when he left, 'Good luck,'" remembers Parsons. "[When he returned] he said, 'Actually, Rupert took it very well.' It wasn't till the next day that things started to erupt."
The next morning all hell broke loose. Though Levin's meeting with Murdoch had been brief and civil—Murdoch even thanked him for braving the rain—the News Corporation chief rose in a fury the next day. "Murdoch thought he had been lied to," says Ailes, who received one of several angry calls Murdoch made that night and the next day. Ailes urged his boss to get tough. "If these guys want to go to war," said Ailes, "let's go to war."
Meanwhile, Murdoch's broadcasting chief, Chase Carey, phoned Dressler. "He went crazy," remembers Dressler. "He called me a lot of nasty names. Said we were out to screw him, that we were disingenuous. I said, 'Chase, calm down, we can still do a deal [later].' And then he called me a lot of names I don't want to see in print." Later that afternoon Dressler was summoned to Levin's office. Murdoch had telephoned Levin that day, and the civil tone of the evening before had given way to an icy rage. "An outrage" was among the things Murdoch had called Levin's move.
"What the hell happened?" Levin asked. "I came back and everything was fine. Then Rupert called and he went crazy on me."
The furor took everyone at Time Warner by surprise. Meanwhile, at News Corporation headquarters three blocks away, Murdoch sat down with News Corporation's general counsel, Arthur Siskind, as Siskind ticked off their options. Without Manhattan, there was serious concern whether Fox News was viable long-term. As Siskind saw it, they could sue. They could appeal to the F.T.C. They could try to get Ailes's close friend New York Mayor Rudy Giuliani to intervene; New York City jobs, after all, were at stake. Or they could retaliate in Europe, where Murdoch's satellite systems carry Time Warner programming. "We don't want to burn too many bridges here," Siskind cautioned. The two empires had too many intertwined tentacles; an all-out war could badly scar both sides.
Ailes liked the idea of approaching Giuliani. In his previous incarnation as a political consultant, Ailes had advised Giuliani on his first, unsuccessful campaign for mayor, in 1989, and he still sat on one of Giuliani's advisory committees. Ailes put in the call. He says he explained the situation to Giuliani in detail. The mayor, he says, listened closely and said he would have one of his deputy mayors, Fran Reiter, look into the situation. There was no telling how vigorously Giuliani would pursue the matter, but Murdoch's men felt as if they had a couple of trump cards. One was the extensive tax relief package Siskind had negotiated just that spring with City Hall. Giuliani had wanted the package to stem the tide of broadcast studios heading across the Hudson River to New Jersey, where MSNBC, CNBC, and others had set up shop in suburban Fort Lee. Now Murdoch wanted more than tax relief—he wanted Time Warner relief.
After a briefing by Murdoch's lawyers, Deputy Mayor Fran Reiter telephoned Dick Parsons at Time Warner, leaving a message that she was "very concerned" about the Fox situation. A onetime Republican aide to Nelson Rockefeller and a former law partner of Giuliani's, Parsons was among Giuliani's few prominent African-American backers and chaired the city's Economic Development Corporation. The next day, Parsons and Levin instructed Dick Aurelio, the Manhattan cable chief, to head down to City Hall and find out what Reiter wanted. It was a questionable call: sending Aurelio, a longtime Democratic operative, to negotiate with Giuliani was like sending Madalyn Murray O'Hair to cut a deal with Jerry Falwell.
Aurelio's visit to City Hall was a disaster. Both sides later put their own spin on the meeting, but agree on what Giuliani's people proposed. By law the city controls five of Time Warner's cable channels, which it fills with civic affairs and educational programming, broadcasts of City Council meetings, and—even though municipalities are barred from broadcasting commercial programming—horse races, a nod to the city's stake in Off-Track Betting. What if, Reiter suggested, the city agreed to broadcast one of Time Warner's pseudo-educational channels—an aide mentioned The History Channel by name—to free up room for Time Warner to carry Fox News? "Are you saying you would require us to put Fox on that channel as a quid pro quo?" Aurelio asked, his surprise evident.
Aurelio said such a deal would be a clear violation of law. One of his attorneys began reading aloud a pertinent section from the 1992 cable act, but was interrupted by one of the city's lawyers, Norman Sinel of Arnold & Porter. "You don't have to lecture us on the First Amendment and the law, we know what the law says," Sinel interjected. "The mayor's office is fully aware of the risks involved here. We're willing to take those risks. The question is, is Time Warner willing to take those risks?"
Aurelio returned uptown, described the meeting to Parsons, and said he doubted the matter would go much further. "I don't know," said Parsons. "I'm not sure that's the end of it."
It was only the beginning. That night, October 1, Murdoch hosted a kickoff party for Fox News beneath a tent outside News Corporation headquarters on 48th Street. There, in a crowd strewn with the likes of Barbara Walters and Connie Chung, and just a stone's throw from Time Warner's Rockefeller Center headquarters, Murdoch and Ailes accepted a welcoming proclamation from Giuliani and New York governor George Pataki. Giuliani lavished praise on Ailes and the network, saying Fox News was of "incalculable value to the people of the city." Fran Reiter showed up and was escorted through the crowd to Murdoch himself, who spent several moments chatting with her. In another corner, Murdoch's lawyer Arthur Siskind was deep in conversation with Dennis Vacco, the New York State attorney general. It was a raw display of political power that would pay off the very next week with Vacco's announcement that he was launching an antitrust investigation of Time Warner's cable franchise. Within hours after the party both Pataki and New York senator Al D'Amato lodged calls of protest with Levin.
Over the next two weeks, as Time Warner and City Hall swapped a series of testy letters, the pressure on Levin and Parsons sharply escalated. Fran Reiter indicated she was prepared to pull Time Warner's charter altogether if Time Warner didn't carry Fox News. Alternatively, Reiter suggested Time Warner could grant City Hall a waiver to carry Fox News on one of the city's channels. Giuliani's hyperaggressive moves stunned cable executives around the country. "This is the most frightening exercise of political power that I have seen in my entire career, and I have been in politics and government for 40 years," Dick Aurelio told *The New York Times*. Murdoch, meanwhile, accelerated his attacks on other fronts. He filed suit against Time Warner for breach of antitrust laws. At a charter review hearing on October 7, Fox attorneys appeared and blasted Time Warner as an anticompetitive monopoly.
Murdoch's *New York Post*, meanwhile, launched a series of partisan attacks in its news columns, zeroing in on Turner. At its lowest moments, the *Post* portrayed Turner in a straitjacket. IS TED TURNER NUTS? YOU DECIDE, ran one memorable front page headline. Turner exploded. In various venues, he called Murdoch a "disgrace to journalism." The manic broadsides spilled over into the World Series, where Murdoch's Fox network was broadcasting the games between the New York Yankees and Turner's Atlanta Braves. As Murdoch's taunting aerial messages buzzed overhead, sportswriters wondered why Fox wasn't showing more of the usual shots of Turner and Jane Fonda watching the game. *The Times's* Richard Sandomir actually began counting the minutes between shots of Turner, who tended to pop up on Fox's coverage when he was wearing silly "rally caps" or making faces.
On October 9, Giuliani made his boldest move yet to get Fox News on the air. In a letter to Dick Parsons, Fran Reiter said that if Time Warner wouldn't grant the city a waiver to broadcast Fox on one of its own channels it would do so without a waiver. When Reiter wouldn't say more, Parsons got details on the city's plan from Charles Dolan, the chairman of Cablevision, who was facing an identical threat from Giuliani to broadcast Fox to Cablevision's 450,000 subscribers in Brooklyn and the Bronx. According to Dolan, Giuliani would make his move Thursday night, October 10.
That afternoon, pondering their options, Levin and Parsons decided not to block the city's cable signal, which was in their power. By that point they realized the matter was headed for litigation, and they decided they would rather be an aggrieved victim than the monopolistic oppressor. At 9:00 that evening, the two men headed over to the law offices of Cravath Swaine & Moore, where they began monitoring the city's cable channels in a conference room. Suddenly, around 11, a feed from Bloomberg Information Television burst onto the screen. The city had decided to broadcast Bloomberg first, Parsons had learned, in an attempt to dilute the charges that Giuliani had bowed to Murdoch's political power. Fox News was to begin broadcasting the next night.
It never got the chance. Just before midnight a Cravath attorney dropped Time Warner's lawsuit against the city through a mail slot at the federal court in Foley Square. The next morning, Judge Denise Cote, a slim woman with a graying Dorothy Hamill haircut, entered her courtroom on the 11th floor of the federal court building and listened to arguments from attorneys representing both Time Warner and the city. From the bench, she ruled in favor of Time Warner, blocking the broadcast of Fox News in Manhattan. In early November she affirmed her decision after a two-day hearing. For the moment, Giuliani and Murdoch had been foiled.
On the global scale on which today's media superpowers compete, the squabble over who gets to appear on Time Warner Cable amounts to a few shots fired over the wall at Guantánamo. But even as Time Warner and News Corporation scrapped in the canyons of New York, Sumner Redstone of Viacom was exchanging broadsides with Seagram CEO Edgar Bronfman, Jr. in a Delaware chancery court over their frayed partnership in the USA Network. The fear is that as the stakes rise, as the Levins and Redstones and Murdochs and Malones take on ever increasing loads of debt to bring their world-conquering strategies to life, these kinds of firelights will escalate. So far the rules of engagement have remained civil, with everyone concerned with keeping the wider peace. But if those rules are broken, given the intricate nature of the alliances linking all these conglomerates, there lies the prospect of real havoc.
What that future could hold was underscored in mid-November, when Fox's Chase Carey paid a visit to Fred Dressler at Time Warner's cable division headquarters in Connecticut. Once again Carey asked that Time Warner change its mind and grant carriage to Fox News. If it didn't, Carey warned, Murdoch was prepared to broaden his attacks. News Corporation is currently finalizing the acquisition of 10 major television stations, spread in key markets from Kansas City to Tampa. If Time Warner didn't agree to carry Fox News by January 1, Carey said, Murdoch would pull the Fox network off every one of the Time Warner systems in these cities, a move that would rob viewers of programming as varied as NFL football games, *Beverly Hills 90210*, and *The X-Files*. Although Dressler protested that such a move would hurt Fox as much as Time Warner, Carey says, "They have to realize that if they're going to act in bad faith, there will be consequences." Sighs Dressler, "They're going to all-out war."
For years now New Establishment chieftains have gathered at conclaves from Sun Valley to Washington to spin rosy scenarios of a cooperative future, where the Microsofts and ABCs and Bell Atlantics and TCIs will work in tandem to build an information superhighway that will bring true global communication to every American home. Now, more often than not, they appear to be at one another's throats, these robber barons whose vast corporations seem more and more to be reflections of their CEOs egos. "We're into a war of egos among superpowerful men, as opposed to what's in the best interests of shareholders," says a former Hollywood studio chief. "These big companies have to cooperate with each other or relationships will come undone and they'll be undone forever…All-out war is just that. There are only Pyrrhic victories. All sides get hurt."
*In the interest of full disclosure it should be noted that Bryan Burrough is an author under contract to HarperCollins, the publishing company owned by Rupert Murdoch, and Kim Masters is a contributing editor at* Time *magazine, which is owned by Time Warner.*

**"Fox Pulls Plug On New *Alien* Film," by Army Archerd, *Variety*, February 7, 1997**
20th Century Fox announced today that a new upcoming film in the *Alien* franchise, a film to be entitled *Alien: Resurrection*, has been pulled from release, despite the fact that principal photography was complete. The film, with a script by Joss Whedon and directed by French director Jean-Pierre Jeunet, was set to release late in the summer, and hopefully restore fan excitement after 1992's underwhelming *Alien 3* had seemingly closed the series. The script would have revolved around an apparent clone of Ripley, the iconic heroine portrayed by Sigourney Weaver in the last three films, being brought to life 200 years after the actual one sacrificed herself to prevent the Alien she was "pregnant" with from causing devastation, in order to create a new, more pliable Alien that has been infused with her DNA and vice versa. The film also had signed up Winona Ryder, Ron Perlman and Brad Dourif in supporting roles.
"*Alien: Resurrection* has been cancelled for a very simple reason," the statement by Fox Filmed Entertainment head Bill Mechanic reads. "The movie was simply not any good, nowhere near the standard that an entry in this series requires, especially not after *Alien 3*. Our losing the distribution of *Star Wars*(referencing Disney's purchase of Lucasfilm last year) has been a humbling experience. We came to the realization that better care must be taken with what we have left, and we want to do right by the fans of *Alien* this time around. The film simply would not have been accepted by the fans."
Mechanic's press statement does not give a timeline for when a suitable replacement film can be expected. "Maybe a year or two or three from now, maybe a decade from now, maybe two decades from now. It doesn't matter when, though. What matters is that the film be as great as can be, and all the time in the world must be taken to ensure that it is great. That's what matters most."
The film had cost $60 million to make, and about $15 million in P&A costs had been set aside. Fox's decision to cancel the film means that it will eat the costs completely. Some might consider this a worrying sign, as the *Alien* film had been greenlit in the hopes of having a hit to offset potential losses in James Cameron's massive, nearly $200 million epic disaster film *Titanic*, which has already been going well behind schedule and over budget, and worries that the movie will miss its planned July 2 release date are rising. Fox is on the hook for two-thirds of the budget in exchange for international distribution, with Paramount covering the remaining third and releasing the movie in North America.
"If Fox does not have confidence in an *Alien* film, what does this say about *Titanic*?" film critic Janet Maslin says. "The latter is already being seen in a lot of quarters as the *Heaven's Gate* of the '90s, that Jim Cameron has been given too much rope and hanged himself. If something that Fox had gotten behind as a sure hit to offset likely losses is not that secure, then things are worse than we thought."
Despite being successful at the box office, the last installment in the *Alien*franchise, *Alien 3*, which was the debut film of David Fincher of *Seven* fame, was lambasted by critics and audience alike, considering it an underwhelming followup to 1986's *Aliens*, and receiving particular vitriol for the killing off of fan favorite characters Corporal Dwayne Hicks (Michael Biehn) and Newt (Carrie Henn) from that film in the opening credits, offscreen, in Fincher's installment. Both Cameron, who directed the second film, and Ridley Scott, director of the original 1979 film, expressed their dislike of the third film and the fates of the characters. The fan backlash helped lead to then Fox film head Joe Roth resigning his position and choosing to take the studio chair job at Disney after Jeffrey Katzenberg left to found DreamWorks SKG with Steven Spielberg and David Geffen.

**"Hollywood Braces For Likely Delay Of *Titanic*," by Bernard Weinraub, *The New York Times*, April 21, 1997**
The likelihood that *Titanic*, the costliest film ever made, will delay its opening, previously set for the July 4 weekend, is sending ripples across Hollywood and turning the summer season into turmoil.
Hollywood is on a binge of producing big-budget movies: at least 15 films whose costs, with marketing, reach more than $100 million each will be released over 10 weeks this summer. So the anticipated decision to postpone the opening of *Titanic*, largely because of complicated computer-generated effects, has set off, essentially, a chain reaction across Hollywood.
Whenever the $180 million *Titanic* eventually opens - it could be later in July or at Thanksgiving - the move will alter the release dates of other mega-budget movies and leave studio executives scrambling in what has emerged as the most expensive summer ever, even with the decision by Warner Bros. to have *Batman & Robin* drop out of release this year, be reshot, and prepped for a release next summer, and 20th Century Fox cancelling a planned film called *Alien: Resurrection*, which was nearly complete in shooting but pulled before editing, and the studio eating the entire cost of that decision, as the remaining movies are just that costly.
At stake is not just the success or failure of a film or two, but the jobs of some top movie executives if some big films flop. ''The concern is pure economics,'' said Peter Chernin, president of the News Corporation, which owns 20th Century Fox. ''Too many movies are opening in a short period of time. There's never been a marketplace in the history of the movie business to support all these big movies. Every studio is terrified.''
Larry Gerbrandt, a senior analyst with Paul Kagan Associates, a research and consulting concern, put it more bluntly. ''There's going to be blood on the floor,'' he said.
The decision to delay *Titanic* by Paramount and 20th Century Fox, which are jointly financing the James Cameron movie, will probably be made over the next few days. Paramount will release the film, about the ill-fated luxury liner, in the United States, and Fox will distribute it abroad. Privately, executives at both studios said the movie would be delayed.
Robert G. Friedman, vice chairman of the Paramount Motion Picture Group, said today: ''I'm in discussions with Jim on his postproduction schedule. Once we have determined when he can deliver the film, we will confirm our release date.''
Rumors had been proliferating for more than a week about the problems facing *Titanic*, which had been set to open on July 2, the start of one of the biggest moviegoing weekends of the year. *Daily Variety* began running a ''Titanic Watch.'' At issue was the completion of the special effects for the film, for which a five-story copy of the ill-fated luxury liner had been built and as many as 1000 extras and a crew of more than 800 - which is probably a record number - had been working virtually around the clock.
Another project bearing the name *Titanic*, a $10 million Broadway musical by Maury Yeston set to open on Wednesday at the Lunt-Fontanne Theater, also had some early technical problems, though not serious enough to delay its opening. Difficulties with a hydraulic lift, which tilts a portion of the stage to a 45-degree angle during the ship's sinking, delayed the start of previews and led to the cancellation of one matinee performance.
Mr. Cameron, a 43-year-old Canadian, has a reputation as a brilliant and difficult filmmaker. He has directed such successes as *The Terminator, Terminator 2: Judgment Day* and *Aliens*. He was initially somewhat less successful with *The Abyss*, though an extended "special edition" released four years later did far better. His latest film, *True Lies*, with Arnold Schwarzenegger, grossed $146 million.
Initially budgeted at $110 million, the cost of *Titanic* has soared to at least $180 million, and possibly $200 million. Costs are reportedly still rising. Marketing will add $25 million to the bill. To recoup its investment, the film will have to rival some of of the biggest moneymakers of all time, like *Jurassic Park*, which grossed $360 million in the United States.
Compounding the problems facing the studios is that there is no merchandising for the movie, in contrast to most of the other ''event'' movies of the summer, and that it is essentially a love story with Leonardo DiCaprio and Kate Winslet, set against the backdrop of the vessel's hitting the iceberg. Nonetheless, studio executives who have seen portions of the movie said its special effects are dazzling.
Whatever decision is made about delaying *Titanic*, executives at every large studio were weighing their next moves this weekend about the release of their summer films. A move by *Titanic* - any move - would set off a number of dominoes. ''It will rearrange the schedule,'' said William Mechanic, president of Fox Filmed Entertainment.
Distributors generally seek to open expensive summer films by early August to take maximum advantage of the summer vacation period. By mid-August, many college students are returning to campuses, and high schools are opening in some Southern states. Moreover, the opening weekend of a film is considered absolutely crucial to its success or failure - and a film like *Titanic* must open with a first weekend of at least $25 to $30 million to guarantee success.
(*Waterworld*, probably the most expensive film before *Titanic*, costing about $150 million with marketing, opened at $21.1 million. It grossed only $88 million in the United States but was successful abroad.)
Moving *Titanic* to the weekends of July 18 or July 25 could result in substantial shifts to the summer schedule. Several studio executives said that one of two costly films opening on July 25 would be compelled to move to avoid facing *Titanic*. One of the films is *Conspiracy Theory*, a thriller with Mel Gibson and Julia Roberts, produced by Warner Bros. The other is Sony and Disney's *Air Force One*, in which Harrison Ford plays a United States President taken hostage by terrorists. In all likelihood, one of these films would move into the fall.
Should *Titanic* move into the first weekend in August, it would compete with six films opening that weekend, leaving numerous studios scrambling to find other dates.
Moreover, once *Titanic* moves from its July 2 berth, it would leave that big weekend almost entirely to *Men in Black*, Sony's science-fiction comedy adventure with Tommy Lee Jones and Will Smith. Paramount may move in with its own action film, John Woo's *Face/Off*, with John Travolta and Nicolas Cage, now set to open on June 27.
Paramount executives, who point out repeatedly that their stake in *Titanic* is limited to about $65 million, with Fox picking up the rest of the huge bill, insisted that efforts would be made to open *Titanic* in the summer. Delaying the movie until Thanksgiving or Christmas, which remains a strong possibility, would increase production and interest costs even further.
And the Thanksgiving season is filling with other big competitors, including Sony's *Starship Troopers*, directed by Paul Verhoeven, and Disney's *Flubber*, with Robin Williams, a remake of *The Absent-Minded Professor*.
The jockeying for opening dates - and where *Titanic* finally docks - leaves most top producers dismayed. ''It's for the big boys, not me,'' said Scott Rudin, who generally produces moderately budgeted films. ''It's great if you have *Batman* or *Jurassic Park* or *Titanic*. I'm happy to be out of there.''

**"The $200 Million Lesson of *Titanic*," by Robert W. Welkos, *Los Angeles Times*, February 11, 1998**
The man whose studio co-financed the most expensive movie in Hollywood history-the $200 million disaster epic *Titanic-*-recalls what it was like during those dark days when the film was still in production and the daily budgets reached his desk.
"During the worst of the times," Peter Chernin recalled, "I remembered saying, 'If we can just break even. . . .' "
Now, some industry insiders say *Titanic*, which Tuesday added a record-tying 14 Academy Award nominations to its $337 million box office to date, has raised the bar so high on film budgets that even movies costing $100 million may seem like a bargain.
For Chernin, the president and chief operating officer of News Corporation, parent firm of 20th Century Fox, the fact that *Titanic* has become one of the biggest-grossing movies of all time confirms the gut instinct he had when director James Cameron walked into his office three years ago carrying an armload of books about the ill-fated British ocean liner. Cameron had just signed a five-year deal at Fox and was anxious to discuss his next project with the studio executive.
As the men pored over the books, flipping through illustrations of the doomed ocean liner that included undersea photos of the actual wreckage, Cameron enthusiastically pitched his movie.
"Basically, he had the story in his mind at that point," Chernin recalled. "He wanted to do 'Romeo and Juliet.' He wanted to do a personal story against the background of the sinking of a ship."
Did Cameron mention a price tag? "When Jim walks in the room," Chernin said with a laugh, "you know it's not going to be cheap-but he didn't have a dollar figure."
Tuesday's Oscar nominations, Chernin said, were especially gratifying given the turbulent history of the project.
"The budget news was so phenomenally bad on a daily basis. We all went through a tough eight or nine months. There had just never been a movie this expensive in history. . . . You wonder, 'What happens if it fails?' And you start adding up your bank accounts and ask, 'Can my kids go to college?' "
So, he said, "It's incredibly gratifying to get this validation for a movie we're so excited about and believe so much in."
The film that resulted from that meeting between Chernin and Cameron has struck a resounding chord among moviegoers, but what ramifications does it hold for the film industry?
"People are now going to come in and say, 'My picture only cost $100 million,' " said one high-level studio executive. "If *Titanic* had failed, it would have been the end of those movies."
Even Chernin said Hollywood has not seen the last film with a $200 million price tag.
"Certainly we hear of no plans to make a $200 million movie," he said, "but there is no question a $200 million film will be made."
Cameron argued that *Titanic* has not raised the bar for production budgets.
"I think it's a complete misinterpretation to say that this film now opens the floodgates for more expensive movies," Cameron said Tuesday. "The validation for making expensive movies has always been that they tend to be the highest-grossing films."
If there are lessons to be learned from *Titanic*, the director said, it is not that films will now cost more, but "the media doesn't get to hang a movie with a rush to judgment" before it comes out.
"But more importantly," Cameron added, "if you wait and value your film and investment and treat it with respect and don't rush it into theaters just to make a [release] date, you may win all the marbles."
To be sure, Fox and Paramount Pictures, which jointly produced the film, stand to make a fortune on the movie. With worldwide box office expected to climb to nearly $1 billion, each studio stands to rake in profits of $100 million. They chose to make the leap together since they'd made a gamble that paid off before: Mel Gibson's *Braveheart*.
For Cameron, a director with a reputation for being arrogant and driven, the film has proven that his talent is not confined to action-genre films like *Terminator 2*.
But many say that it would be crazy for studios to try to replicate the success of *Titanic* by simply spending lavish sums of money on films.
Rob Friedman, who oversaw Paramount's marketing campaign for *Titanic*, said the only lesson to be learned from the film is that "lightning in a bottle can occur," but it's not something that any studio can plan.
"I don't believe anybody believes this now lets the pressure off on keeping budget prices down," he said.
One producer said it will not be easier for studios to greenlight mega-budget movies. "Why would it be easier? All people did for a year in this town was sweat *Titanic*. I think *Titanic's* cost will make people look more carefully at the cost of a movie."
Entertainment attorney Tom Hanson also doubted that *Titanic* is going to encourage studios to gamble that much money on a film.
"I don't think anyone has looked at *Titanic* and decided that it makes sense to make movies of that size," Hanson said. "I think everybody was terrified of this movie. In retrospect, it was a great idea, but certainly leading up to the opening, there was a tremendous amount of trepidation and fear."
Jim Wiatt, president of International Creative Management, calls *Titanic* an "aberrational success" that will not change the way Hollywood does business. Wiatt said all studios need big event films to fill their summer and Christmas holiday periods, but they also need movies of varying budgets if they are to succeed.
Mace Neufeld, who has produced such big-budget action films as *Clear and Present Danger* and *Patriot Games*, said that one result of soaring budgets is that studios are now entering co-financing deals to lessen the risks.
"Everybody keeps raising their eyebrows, but nobody is lowering the budgets," Neufeld said.
Neufeld said one positive result of *Titanic's* success could be a return to big studio period movies.
"Studios have been reluctant to do period pieces over the years after the failure of the western and the big costume drama," Neufeld said. "Yet here we have a picture that has this great period detail in it, which is one of the reasons it was so expensive, and suddenly it is one of the highest-grossing films of all time."
Producer Frank Price said Hollywood has always needed movies with spectacle to draw in an audience. That's as true today, he said, as it was in 1915 when D.W. Griffith released *Birth of a Nation*.
But Price said a movie depends on many elements if it is to succeed, including a good script and selecting the right actors.
"If you make a love story and discover there is no chemistry between the leading man and leading woman, you're dead," he said. "That happened with Julia Roberts and Nick Nolte [in *I Love Trouble*]."
Nirvana frontman Kurt Cobain, who attended the Hollywood premiere with his new love, promising actress Charlize Theron (recently costarring with Keanu Reeves and Al Pacino in *The Devil's Advocate* and pegged as the star of Disney's forthcoming remake of *Mighty Joe Young* alongside Bill Paxton, who has a supporting role in *Titanic*), and who have seen the movie eight times, was quite starry-eyed about the film and what it will represent.
"It's the best movie to emerge since *Braveheart*, which was already a huge deal when that came out. *Braveheart* was a massive risk going in, and it paid off considerably, especially when it won Best Picture. Special effects are evolving in leaps and bounds, working together with the story and the actors to build huge canvasses to pain your portrait. Movies are going to make a new leap forward in the 21st century, and it's quite something to realize."
Theron also had similar words to that effect. "I think people like Jim Cameron are part of a movement to really take filmmaking to a new plateau. There's your masters, people like George Lucas, Steven Spielberg, Martin Scorsese, people who have matured with time and whose skill is unparalleled. There's the new, rising talents like David Fincher who are really making a name for themselves, or Mel Gibson, proving he can do more than be an actor. And then you have the people like Jim. There's gonna be a place for all them, for the major studios and for the indies like Miramax and Artisan Entertainment, they've all got a place at the table. And all kinds of movies can be done now, especially because *Titanic* is a resounding success. Movies are going to be better and better as time goes on, and all sorts of voices will now be heard."
Chernin himself noted that some people have compared *Titanic* to *Gone With the Wind* in this respect: "It was a love story set against a spectacle."
After Cameron made repeated deep-sea dives to the resting place of the *Titanic*, the director invited Chernin up to his house to view the raw footage. Chernin said the undersea images of the ship were haunting and he particularly recalled looking at the woodwork that came into view as the camera silently proceeded down the ship's hallway. Chernin said it made him realize that this was more than just another movie.
"I don't think the lesson of this is that we should be making $200 million movies," Chernin said. "I think we should be making *great* movies."

**"Is Fox News Fair?" by Neil Hickey, *Columbia Journalism Review*, March/April 1998**
*For the 3 out of 4 Americans who believe the news is biased, we present something quite rare: a news network dedicated to providing fair and balanced coverage. It's cable news for the independent thinker, 24 hours a day.*
-Full page advertisement, The New York Times, September 15, 1997
*Fox News Channel, harnessing the vast, worldwide resources of the News Corporation. Three international partnerships, broadcast sites and news rooms around the globe. Access to more reporters and news professionals than any other network. Full, fair and balanced coverage . . . The Fox News Channel; we report, you decide.*
-Promotional announcement aired throughout the day on the Fox News Channel
"I don't think there's ever been anything like it," Brit Hume declares with undisguised enthusiasm. He's talking about the Fox News Channel, Rupert Murdoch's fledgling, all-news cable network, a competitor to CNN and MSNBC launched October 6, 1996 with an estimated sticker price of $475 million and now available in 25 million U.S. homes. As the network's managing editor and chief Washington correspondent, Hume is FNC's highest profile figure - 23 years a reporter for ABC News, eight years as its chief White House correspondent, an Emmy winner in 1991 for his Gulf War coverage. In a promotional announcement aired often on FNC, Hume tells viewers: "The intention here is to do a broadcast people can trust."
"Trust." "Fairness and balance." "We report, you decide." Those terms punctuate FNC's broadcast day like a drumbeat, along with viewer mail flashed on the screen: "We are thrilled with the unbiased and fair coverage." "Thank you for finally providing a TV home for me." "Until Fox News Channel, I was about to give up on news." "It's nice to have a newsperson say, 'You can draw your own conclusions.'" "TV newsmagazines have fluff. Fox has facts." "Fox News Channel has boldly earned the right to declare they are fair and balanced." "Finally, objective journalism . . . . You're long overdue." "Thank you for putting together a team that tells the whole story."
For Murdoch, playing the FNC chip is a huge gamble. CNN, in its eighteenth year, is a pillar on the international news scene, and a cash cow for its owner, Time Warner - the world's biggest media conglomerate. MSNBC is the privileged offspring of behemoth parents, GE and Microsoft. Those two cable networks were duking it out vigorously for a share of the relatively small all-news audience - with CNN comfortably the world champ - when FNC entered the ring as a brash challenger. It's looking at losses for the two years 1997 and 1998 of $150 million, and won't be operationally solvent (say its proprietors) until sometime in 2000, with years to go beyond that before News Corp. recoups its investment.
Nonetheless, it's a briar patch that Murdoch, 68, was eager to leap into. He needed news as the final piece of his three-legged stool to be truly a major player in American television, like ABC, CBS, and NBC. Although hugely successful in entertainment (*The X-Files, The Simpsons*) and sports (National Football League games) via his Fox broadcasting network, the Australian-born magnate never was a presence in national TV news in the U.S., and his affiliated stations were a ragtag crew of mostly UHF outlets with little history of local news coverage. Now, the recently-forged Fox News division, under Murdoch's chosen instrument for progress, Roger Ailes, 56, is busily trying to change all that by building a national TV news organization and a chain of news-conscious local stations that can play on the same ball field with the big kids.
Having thus committed to a cable news network, the question for Murdoch became: What kind of network? What would be its taste and texture? How would it differ from the entrenched dynamic duo, CNN and MSNBC? The answer emerged from Murdoch's conviction that most TV journalists are far more liberal than the population as a whole.
There is some evidence that he is correct. In a 1996 Freedom Forum/Roper Center survey of 139 Washington-based newspeople, 61 percent of the sample professed to being either "liberal" or "liberal to moderate," and a paltry 9 percent "conservative" or "moderate to conservative." In 1992, Bill Clinton got 89 percent of their votes, George Bush 7 percent. In a famous *Wall Street Journal* op-ed piece in February 1996, CBS newsman Bernard Goldberg hurled a hand grenade at his colleagues, saying: "The old argument that the networks and other 'media elites' have a liberal bias is so blatantly true that it's hardly worth discussing anymore." Even Walter Cronkite declared last year that most journalists "are probably tilted toward the liberal side."
Enter Murdoch, stage right. In February 1996, he installed as chairman and CEO of the Fox News division the tough, profane political consultant and TV producer, Ailes, who'd advised a string of Republican office seekers: Nixon, Reagan, Bush, New York Senator Alfonse D'Amato, and New York Mayor Rudolph Giuliani. Ailes had been a central figure in Joe McGinniss's celebrated book about the 1968 Nixon campaign, *The Selling of the President*, which depicted Ailes as a ranting, blustery partisan whose showbiz talents cut to the core of Nixon's image problems. (Famous Ailes quote from the book: " . . . a lot of people think Nixon is dull . . . a bore, a pain in the ass . . . . He's a funny looking guy. He looks like somebody hung him in a closet overnight and he jumps out in the morning with his suit all bunched up and starts running around saying 'I want to be President.'")
Ailes went on to help create syndicated entertainments like *A Current Affair, The Maury Povich Show, The Leeza Show, Tom Snyder's Tomorrow: Coast to Coast*, and Rush Limbaugh's TV chat program. He was president of CNBC, which he turned into a profitable business news channel, but was less successful with America's Talking, NBC's attempt to build an all-talk cable network.
When NBC junked America's Talking to use that channel space for MSNBC, Ailes was a fifth wheel and resigned - not happy with his treatment. A few days later, Murdoch made him boss of Fox News, which now includes FNC; Fox News Sunday, a weekend news-and-features series on the Fox broadcast network; and a service called News Edge that feeds video news to Fox broadcasting affiliates around the country. Only 89 of 175 of those stations do local news, but Murdoch has decreed that all Fox stations must eventually have news departments as a condition of their affiliation with the network, and to make them regular suppliers to FNC of news that breaks in their locales.
Ailes's proudest hire was Brit Hume, 54, well-known among TV news people for his staunch conservative views. Then he nabbed Catherine Crier, 43, unarguably the most glamorous Republican judge ever elected in Texas, a Michelle Pfeiffer with political and journalistic savvy; she served five years presiding over the 162nd District Court in Dallas before jumping into journalism at CNN, and then to ABC where she was a correspondent on *World News Tonight* and a regular substitute anchor for Peter Jennings and Ted Koppel. Another big fish was the solidly authoritative Neil Cavuto, who transplanted his CNBC *Wall Street Market Wrap* program to FNC where it became *The Cavuto Business Report*. Bill O'Reilly, twice an Emmy winner for local TV news coverage, had anchored the tabloidy *Inside Edition* syndicated series and then got himself a master's degree in public policy at the Kennedy School at Harvard ("It was like going from Bangladesh to Beverly Hills."). For FNC he created *The O'Reilly Report*, a fast-paced nightly hour of features and chat.
Ailes also reeled in Tony Snow, a conservative syndicated columnist and chief speechwriter for President Bush; Fred Barnes, executive editor of the conservative, Murdoch-financed *Weekly Standard*, best known as a member of The McLaughlin Group; Eric Breindel, former editorial page editor of Murdoch's right-wing *New York Post*, now a senior vice president of News Corp. and host of a weekly media critique show on FNC called Fox News Watch; and, for a weekend interview show, Judith Regan, who runs her own imprint at Murdoch's HarperCollins. (She published Howard Stern's *Private Parts*.) A pair of radio talk show hosts named Sean Hannity and Alan Colmes were drafted to front a putative left-right dialogue cum interview show that massages issues in the news.
While rounding up that cast of onscreen characters, Ailes simultaneously set about creating the infrastructure for a full-service cable news network, opening bureaus in Hong Kong, Jerusalem, Moscow, and London, along with a half-dozen in the U.S. He made deals for video news pictures with Reuters, World Television News, and AP-TV; enlisted Sky TV, Murdoch's pan-European satellite news service; and arranged exchanges with News Corp. newspapers around the world.
The questions persist: Can a news network with executives and onscreen talent so conspicuously and so heavily right of center fulfill a promise of delivering "fair and balanced" news, information, and opinion? Does the oft-repeated slogan "We report. You decide" accurately describe how the network delivers news? In FNC's round-the-clock format - unlike those of its competitors at CNN and MSNBC - hard news, except for breaking stories, is mostly confined to a few minutes on the hour and half-hour, plus an hour-long newscast at 7 PM. Most of the rest is chat shows, interviews - discussions of trends, technology, health, entertainment, education, pets, as well as some old newsreels from the Fox Movietone archives.
A close monitoring of the channel over several weeks indicates that the news segments tend to be straightforward, with little hint of political subtext except for stories the news editors feel the "mainstream" press has either downplayed or ignored.
A Clinton-related story got the full FNC treatment because, according to Brit Hume, nobody else was doing it. On January 7, the FNC dinner hour news program introduced a report saying: "Hillary Clinton and the White House broke the rules. But the taxpayer may end up paying the bill." The story described a $286,000 sanction imposed by a federal judge against the administration for a "coverup" (in the judge's words) of efforts to keep the proceedings of Hillary Clinton's 1993 healthcare task force a secret. The White House had been shifty in responding to a legal request for the records, the FNC story suggested; interviewees were adamant that taxpayers ought not get stuck with paying the fine.
If Fox's collective news hole - small for an all-news cable channel - offers largely untilted coverage, its discussion programs regularly and unabashedly convey a right-of-center sensibility, sometimes subtle, at other times overt. In a promo for the *Hannity & Colmes* show, Sean Hannity declared his view that "a liberal is somebody who thinks he has a right to my hard-earned money." Bill McCuddy, the entertainment reporter, once announced: "Janet Reno - if you dressed her in drag, how could you tell?"
A talk show guest, Tim Graham of the Washington-based Media Research Center, declared it "outrageous" that the indictments of two Clinton cabinet members received only "eight or nine seconds of network airtime," and that "so many Clinton scandals don't get sufficiently covered." The host, Eric Burns, wondered if that was because "the media are so liberally biased." Graham answered that if one compares Clinton's coverage to Ronald Reagan's, it's "hard to conclude that there isn't a liberal bias here." He added: "Clearly you can say there's a liberal bias when you've got CNN's president staying in the Lincoln bedroom and nobody seems to care at CNN."
On a recent Catherine Crier program, Oliver North inveighed - largely unchallenged - against a laundry list of Clinton's perceived depredations, including what he called "cemeterygate" - the burial in Arlington National Cemetery of Clinton donor Larry Lawrence, who had wrongfully claimed wartime service in the Merchant Marine. North was pleased that Lawrence had been "repotted in San Diego where he belongs." Later on the same program, Republican Congressman Bill Paxon enjoyed a lengthy, friendly hearing of what the House leadership is up to in advancing its own proposals and dealing with Clinton's. The hour thus contained no "balance" to unalloyed right-wing views.
Asked about it, Crier called that edition of the show "one of those accidents of booking. After the fact, I said, 'This is not good.'" Still, it would be okay to have several conservatives on the same program, she suggested, "as long as I'm challenging them and not just providing a forum."
On a *Hannity & Colmes* segment, former FBI special agent Gary Aldrich defended his book *Unlimited Access*, which purports, among other things, to detail personal improprieties by Clinton - some of which Aldrich himself had declared "hypothetical." The segment was framed as a debate over whether FBI, CIA, and Secret Service agents ought to have the right to report alleged improper behavior by presidents - only Kennedy and Clinton were mentioned - when it might affect national security. But the segment's main effect was merely to ventilate the rumors about Kennedy's and Clinton's private activities.
On another *Hannity & Colmes* program, Christopher Ruddy, a writer for the right-wing *Pittsburgh Tribune-Review* (founded by conservative mogul Richard Mellon Scaife), retailed his theory that Commerce Secretary Ron Brown died of a gunshot wound to the head before his plane crashed in Croatia in 1996. Unfounded speculation had it that scandals related to Brown somehow threatened the White House, and that he was murdered aloft before the plane and its 35 passengers died in the crash. (The Armed Forces Institute of Pathology insists Brown's head wounds resulted from the crash.) Ruddy said that "people working on behalf of the White House don't want this to come out." Hannity defended Ruddy, and Fox contributor Ellen Ratner challenged him, but the effect (perhaps even the intended effect) was to leave hanging in the air the suggestion that the White House might be involved in a criminal conspiracy.
Such random gleanings from FNC programming can't be representative of the schedule as a whole, but the attentive viewer, over time, inevitably detects in the welter of talk, banter, chat, debate, repartee, raillery, and badinage an unmistakable conservative biosphere, and a tendency to launch dialogue from right-of-center assumptions that need sorting out before discourse can begin. And although you're far more likely to encounter conservative panelists like columnist Cal Thomas, *Washington Times* writer Liz Trotta, *Weekly Standard* staffer Tucker Carlson, right-wing humorist P.J. O'Rourke, and Nixon confidante Monica Crowley, you'll also spot a few notables from the left like Democratic speechwriter Robert Shrum and former White House lawyer John Quinn, as well a handful of undefinables from the vague center like McLaughlin Group veteran Morton Kondracke and *Washington Post* staffer Juan Williams. Only two well-branded and confessed liberals have a regular weekly spot on the schedule: Jeff Cohen and Laura Flanders of Fairness and Accuracy in Reporting (FAIR), who alternate in the assigned leftie chair on Eric Breindel's *News Watch* series, which also includes a bona fide rightie (often John O'Sullivan of the *National Review*) and a putative centrist like the *Los Angeles Times's* Jane Hall. (A recent topic for *Media Watch* debate: Do "radical environmentalists," as Breindel called them, receive too-friendly treatment in the liberal media?) Important administration officials do show up on FNC regularly and receive respectful treatment.
But the issue persists: Can a news network dominated by conservative hosts be genuinely "fair and balanced"? Would "fairness and balance" require hiring identifiable left-of-center figures as hosts to assure ideological equipoise? No, say FNC's overseers. The left already has a giant megaphone at all the other cable and broadcast networks.
As the only network news boss whose political colors are plainly visible, Ailes has proved an irresistible target for sharpshooters on the liberal parapets. "What would Roger Ailes say if James Carville was anointed president of CBS News?" inquired *Washington Post* media reporter Howard Kurtz in a celebrated 1997 *New York* magazine article about Ailes and FNC by David Brock. But even some of his harshest critics declare Ailes "charming," "engaging," and even "cuddly, like a Saint Bernard." He had a warmup for his current job when the Colorado brewer Joseph Coors hired him in 1974 as news director (Ailes then had no TV news experience) of Television News, Inc., which sent local stations a conservative-tinted brew of national news.
Ailes says he "makes no apology for trying to be fair and objective and reaching out to points of view that the mainstream media probably will ignore." But does that require that all the hosts of FNC talk shows be right of center? "How many conservatives do they have over at NBC?" Ailes counters. You need only watch their news, he says, to conclude that they're liberal. "Do you think there's any doubt about where Peter Jennings stands? Dan Rather? I don't. Everybody who claims they're totally unbiased is full of crap. The issue is how much of what they believe creeps into their news. We work very hard bending over backward to present more than one point of view."
That includes stories on the environment. Many reporters think "environmentalism is always good and anyone who opposes any measure related to it is always bad," says Ailes. "We don't necessarily agree with that." Being leery of environmentalists is the right-of-center, pro-business position, it is suggested to him. "But we're just as critical of business when they're doing something wrong," Ailes responds. (No fewer than eighty-two staffers from CNBC and America's Talking jumped ship and followed him to FNC, Ailes claims. When NBC complained about his recruiting their employees, Ailes says he told them: "You guys ought to know the difference between recruitment and a fucking jailbreak. They're coming down the bedsheets over there, and you better try to stop them.")
Brit Hume is even more vocal in defending FNC's ideological tone. "Surveys repeatedly and unfailingly show," he says, that most viewers believe television news is biased, but most journalists insist the public is wrong. "Our view is that the public is onto something, and that there are a lot of people out there whose sensibilities are continually offended by what they see on the other news networks." FNC does not "pander to the right," he insists, even though a lot of conservatives might flock to the network if it did so. Some of them are "furious," he claims, because FNC hasn't done more on the alleged Ron Brown murder and the supposed White House plot to cover it up. "We're not going to endorse that conclusion the way a lot of right-wing people want us to, but it's a story that's worth giving airtime to." But is it really worth airtime, since independent medical authorities who examined X-rays of Brown's skull say the theory is nonsense? Opposing voices have been presented "sharply criticizing Christopher Ruddy's work," says Hume. "We have a fair number of liberals who get on."
And how many right-wing journalists do the other networks employ, Hume wonders. "If you look at the number of conservatives in broadcasting altogether, there are almost none! There are an awful lot of people who would not admit they are liberals. But they are. They really are! Is there a single conservative on the air at NBC News? A single one at CBS? At ABC you've got George Will and Bill Kristol and that's about it."
Eric Breindel's portfolio extends to loftier stuff than merely moderating a panel show. As a close adviser to Rupert Murdoch on strategic planning, Breindel is distinctive in the News Corp. culture: Harvard (magna cum laude, Phi Beta Kappa, chairman of the Harvard Crimson), London School of Economics, Harvard Law, aide to New York Senator Daniel Patrick Moynihan. Rupert Murdoch feels strongly, says Breindel, that there's a pattern of bias in broadcast and cable TV news, "so much so that the people who run these channels aren't aware that they're governed by a bias. It is to them, for example, wholly natural that global warming be reported as a fact, not a controversy." Murdoch also feels, says Breindel that the political and fundraising scandals of the Clinton administration haven't gotten nearly the play they would have "were the occupant of the White House a Republican, a rightist, a Richard Nixon, Gerry Ford, or Ronald Reagan. Part of fairness is not letting your politics decide what you do and don't cover."
Fred Barnes, an FNC analyst and host, feels the network isn't as conservative as it has a right to be. The way to balance the news, he says, is to offer coverage "that's quite candidly conservative" as a useful counterpoint to "the more liberal tendencies of the other networks." But Kim Hume (wife of Brit), FNC's Washington bureau chief, argues that top Administration figures would boycott a self-branded, overtly conservative network. (Mike McCurry, Sandy Berger, Donna Shalala, Rahm Emanuel, Lanny Davis, and others have been interviewed on the network.) Yes, a lot of Republicans show up on FNC, Hume admits, but they control the Congress. "There are news organizations so unused to Republicans running anything," she says, "that if Senator Orrin Hatch holds a news conference, they say, 'Oh, he's a right-wing nut. We're not going to cover him.' If Ted Kennedy holds one, they cover it. We don't look at it that way."
Media critics and theorists around the country have been casting a curious eye on FNC to see how Murdoch's first foray onto the national TV news scene is evolving. Ben Bagdikian, former journalism dean at Berkeley, charges that the slogan "We report. You decide" translates to mean: "We decide what news you hear, and you make up your mind based on what we tell you." Murdoch "has never been known for giving balanced news in his newspapers or broadcasts," says Bagdikian. "If he has had a religious experience, we have yet to see the results."
Marvin Kalb, director of the Shorenstein Center on the Press, Politics and Public Policy at Harvard, says he's "leery of" and "uncomfortable" with any news operation that makes a point of political allegiance of any sort. Robert W. McChesney, associate professor in the School of Journalism and Mass Communication at the University of Wisconsin at Madison, says that "sometimes there's pretty good stuff" on FNC, but hard, digging, investigative reporting takes a back seat to the endless chat shows, and even though those programs sometimes feature left-of-center views, "that's not journalism. It's talking heads about the news." The slogan "We report. You decide" is "ludicrous," says McChesney, since they decide what to report.
*The Washington Post's* Howard Kurtz says FNC's reporting is "reasonably straightforward," but "it certainly would have been unthinkable even a decade ago for so obvious a partisan as Roger Ailes to be incarnated as a network news chief." Still, says Kurtz, we should "judge him more on the product than on his resume." Reese Schonfeld, former (and founding) president of CNN, thinks FNC is "too much talk and too little action. Too much commentary about the news and too little news." And it's too predictable, he adds. "You know it's going to be the right-wing approach to everything."
Some of FNC's severest critics are former employees, and of those interviewed by CJR, practically none would speak for attribution. Several complained of "management sticking their fingers" in the writing and editing of stories and of attempting to cook the facts to make a story more palatable to right-of-center tastes. ("I've worked at a lot of news organizations and never found that kind of manipulation.") Another detects "hypocrisy" in FNC's failing to note during coverage of Princess Diana that Murdoch tabloids around the world had bought paparazzi photos of her. Yet another declared baldly it was a "tyrannical and horrible" place to work, something "I wanted to wipe off my shoe."
A few ex-staffers are more temperate. Mike Schneider was anchor of the network's main nightly newscast at 7 PMand recalls Ailes as a "very talented manager, and in many ways a visionary." But he may have underestimated the cost and commitment needed to produce a successful news channel, Schneider says. "They still have an incredible amount of potential over there." On his own broadcast, says Schneider, "I never saw or felt the hand of Murdoch's ideology. I never had any pressure to do a story I didn't feel comfortable with."
Critics and supporters tend to agree that a high point of FNC's history so far was its wall-to-wall coverage last year of the Senate's campaign finance hearings, when the other networks gave it shorter shrift. A few cynics suggest, however, that FNC aired saturation coverage of the sessions as yet another opportunity to put the Clinton administration's alleged malefactions on national display. James Ledbetter, media reporter of *The Village Voice*, claims he detected a pattern in the coverage: "Whenever a Democratic senator began asking a question, they cut away to a commercial, so you got this remarkably one-sided view of what was going on. They did that repeatedly. It was so consistent it was funny."
No matter such criticisms, Wall Street has a generally sanguine view of FNC's chances for success in the long term. Murdoch is a risk-taker - "the greatest entrepreneur of the second half of this century," says Reese Schonfeld. Most experts in 1986 felt there was no room for a fourth broadcast network when Murdoch launched Fox - they were famously wrong - and a good case could be made that there's insufficient viewer appetite or need for three all-news cable networks. But Murdoch turned the arithmetic of the cable industry on its head when he offered to pay cable operators ten dollars per subscriber per year (for a limited period) to carry FNC - a daring tactic to get the channel off and running. Up to that time, cable owners customarily had paid cable networks for programming. Derek Baine, an analyst at Paul Kagan Associates Inc., points out that cable networks need a critical mass of about 30 million subscribers before advertisers show up in force - which means an outlay for News Corp. of $300 million just to y circulation, plus the normal budget for covering the news. Says Baine: "Murdoch has always been willing to spend a lot of money to get what he wants. Look at his purchase of NFL games. But, if ten years from now, FNC is a mainstream network, he could have a $4 billion asset, and this thing will look like a hell of a deal."
Meanwhile, FNC's 25 million subscriber base (projected by Ailes to be 40 million by 2000) trails MSNBC's 38 million and CNN's 73 million, but the actual tuned-in audience for each are tiny fractions of those numbers except when there's a Gulf War, an O.J. Simpson trial, or the like.
Quantity issues at FNC are yoked to those of quality - to the inherent character of the network. Murdoch concluded years ago that he needed a national TV news organization and a web of TV stations able to cover local news - a simulacrum of what ABC, CBS, and NBC have - as the final jigsaw puzzle piece of his global news service, with all the synergy, influence, and ad revenue that such a service promises. He chose to create an all-news cable channel as the fundament of that design. But publicly branding it (and its related daily supply of newsfeeds to stations) as "conservative" would have been unfeasible for two reasons: a large chunk of the potential audience would avoid it; and some Fox affiliates, whose owners may not share Murdoch's conservative views, would object.
But nobody can object to a "fair and balanced" news service, nor one that simply "reports" and lets you "decide." Those terms have become a marketing device and a fig leaf for Fox staffers who are otherwise perfectly candid (as they were in interviews for this article) about their right-of-center convictions. But the same yardstick must apply to them as they demand from their competitors: keeping the hard news pristinely free of ideology.
Is the output of Fox News Channel, in its totality, truly "fair" and "balanced"? The answer is a qualified no. It's no more fair and balanced than the *National Review* or *The Nation*, which flaunt no such claims. In its patchwork quilt of talk shows, FNC is, inevitably, the product of its creators, interlocutors, and guests. That makes it unmistakably a bully pulpit for conservative sentiment in America - and, consequently, robustly controversial, which, for better or worse, expands the boundaries of our national discourse. It's one more stone in what's becoming an avalanche of news and opinion hurtling at the public. But the antidote to controversial speech, as is regularly pointed out in journalistic circles, is more controversial speech - not less.

**"Transcript from Borat Sagadiyev interview on Fox News' *Hannity & Colmes*", May 2, 2005**
SEAN HANNITY: OK, as you may well remember, earlier this year, a rodeo in Salem, Virginia, was crashed by a bizarre speech. A reporter from the former Soviet republic of Kazakhstan, Borat Sagadiyev, made what he apparently considered was a rousing, patriotic speech in the middle of the arena, which caused considerable uproar on the local news and even across the nation.
(FROM GRAINY VIRGINIA LOCAL NEWS VIDEO) "BORAT": We support your war of terror. May we show support for our boys in Iraq. May US & A kill every single terrorist. May George Bush drink the blood of every single man, woman and child of Iraq. May you destroy their country so that for the next 1000 years, not even a single lizard will survive in their deserts!
HANNITY: The entire rant drew considerable attention, especially when Borat decided to sing the Kazakhstan national anthem to the melody of "The Star-Spangled Banner."
"BORAT:" Kazakhstan is the greatest country in the world/All other countries are run by little girls/Kazakhstan is number one exporter of potassium/All Central Asian countries have inferior potassium.
HANNITY: As you can tell from the video, the crowd did not like that moment. But joining us here tonight to give his side of the story is the man himself. Please welcome to our show, Borat Sagadiyev.
"BORAT:" Wa-wo-we-wa. Jagsemash. My name-a Borat.
HANNITY: Yes, I know that. So, it's great to have you on the show tonight.
"BORAT:" I so excite to be here. Hello. Hello, US & A!
HANNITY: OK, so, Borat, what exactly was on your mind when you were speaking at the rodeo in Virginia?
"BORAT:" I speak to show support for greatest country in the world, US & A, and support US & A military forces.
HANNITY: That's certainly a very noble endeavor, but the thing is...
"BORAT:" I have to make a shit.
HANNITY: Um, well, I have to say-
"BORAT:" Where can I find the shithole?
HANNITY: Look, Borat, we don't say that on TV, and you should hold it in until the interview is done.
"BORAT:" So, is US & A apparatchik?
HANNITY: Excuse me?
"BORAT:" This-a show, is US & A's Sputnik News or BBC.
HANNITY: No, you're probably thinking of PBS.
"BORAT:" (Cackling) You just said BS.
HANNITY: Yes, well...
"BORAT:" So when do reporter suck Premier Bush's ballsack?
HANNITY: Um, what are you...?
"BORAT:" In Kazakhstan, reporter suck Premier Nesumbumchen's ballsack every week.
HANNITY: Look, Borat, I don't know what you've been led to believe, but here in America, we don't do those kinds of things.
"BORAT:" Then how do US & A get reportings from dear leader?
HANNITY: In America, the President tells us what is happening by having press conferences. Reporters show up and ask him questions.
"BORAT:" This so confusing. This sond more like late night talk show.
HANNITY: If you want to think of it that way.
"BORAT:" Is this "Tonight Show" with Premier Jay Leno?
HANNITY: No, this is a news program, Jay Leno's a late night talk show host.
"BORAT:" You trying to pull leg of mine, Mr. Jay?
HANNITY: I'm not Jay Leno.
"BORAT:" I choose Premier Jay Leno because I don't want to be on show with filthy Jew Jon Stewart.
HANNITY: Borat, you can't say that on the air, you should know this, you're a reporter, right?
"BORAT:" I second-biggest reporter in Kazakhstan, I cover yearly Running of the Jew.
HANNITY: "Running of the Jew?"
"BORAT:" Either Kazakhstan runners die, or filthy Jew dies. Kazakhstan has four big problems: economic, social, transport and Jew.
HANNITY: Well, let me just say...
"BORAT:" May US & A destroy Jew hivemind evil base Israel once done with Iraq.
HANNITY: Um, well, we're about to go to commercial and...
"BORAT:" Kazakstan is the greatest country in the world/All other countries are run by little girls...
"AZAMAT:" ("Foreign" language) Stop, stop this right now! Don't you see you are ruining us right now?!
"BORAT:" I just having fun with Premier Jay Leno. He great comedian!
HANNITY: Borat Sagadiyev, everyone. Up next, the latest overreach of political correctness on a college campus.

**"Fox News Rocked By Sexual Misconduct Allegations," *The Washington Post*, April 6, 2006**
Yesterday, Fox News Channel, the highly-rated news service owned and operated by Rupert Murdoch's News Corporation and known for it positioning of conservative-leaning reporting, was buffeted by allegations of sexual harassment and assault. Several women alleged that the network's CEO, Roger Ailes, a former Nixon campaign adviser and speechwriter and head of the network for the last decade, has engaged in repeated fondling, off-color jokes, groping and even sexual penetration, of employees and female news talent, and that Ailes uses nondisclosure agreements to help ensure their silence.
Ailes is not alone in being targeted. Bill O'Reilly, the network's main talent and host of "The O'Reilly Factor", has been accused of the same behaviors, most notably by a young Fox News intern named Andrea Mackris. Mackris claims that O'Reilly has groped, humiliated and sexually violated her with impunity during her tenure at the network.
Both Ailes and O'Reilly have gone on the offensive. During last night's broadcast of "The O'Reilly Factor", half of the time slot was focused on viciously attacking the women who came forward and the rest of the press for reporting the allegations. Ailes was personally hosted for an interview by O'Reilly, and both men basically marched together in lockstep in their firebreathing denunciations.
At one point, they both accused the "liberal media" for conspiring to frame them for false allegations, and even stated that they were doing the bidding of disgraced former PBS and CBS anchor Charlie Rose, who was accused of sexual harassment of underlings last year, and whose employment was terminated after an internal review judged the allegations to be credible. O'Reilly specifically declared, "Charlie Rose is a prime mover and shaker in the liberal media, who used his power to cloak his wrongdoings, proving their immorality."
Fox News has long positioned itself as the counterpoint to the "liberal media bias" of the "mainstream media", offering a voice to Republican voters "whose views are not being respected, but instead are silenced under the guise of political correctness." Fox News has also showcased that aim under their tagline of "Fair and Balanced." However, many observers say the reverse is true, that Fox News is not a news network, but instead working as a propaganda arm of the Republican Party, and that the media as a whole is hardly liberal. David Brock's watchdog group Media Matters for America, and its prime correspondent, former *Salon* writer Eric Boehlert, frequently make such statements in blog posts on their website, particularly in addressing how Fox News, but even media as a whole, has apparently acted like "lapdogs" in the era of the George W. Bush administration, while targeting the Democratic Party, particularly the Clintons and Al Gore with far more intensity and harassment.
Under such a cloud of continual controversy, Fox News was at one point the highest-rated cable news network in America, before CNN resurged and ABC's new 24-hour network, ABC Cable News, took off like a rocket two years prior. ABC's broadcast news network, as well as those of CBS and NBC, and the MSNBC and CNBC cable networks have also gained considerable ground and battered Fox News' ratings.

**"Drumbeat Of Fox News Allegations Rises To Deafening Roar," *The Washington Post*, April 8, 2006**
Dozens of women have come out of the woodwork, accusing Fox News CEO Roger Ailes and the network's prime talent, Bill O'Reilly, of sexual harassment and assault, adding to the initial claims reported several days ago.
The picture they paint is one in which Ailes and O'Reilly have continually preyed upon female employees, interns and even news talent, with absolute impunity during the network's 10-year existence; one that is actively aided and abetted, and even encouraged, by Rupert Murdoch, the billionaire owner and chairman of News Corporation, the corporate parent of Fox News as well as its sister financial markets channel Fox Business. News Corporation also owns the Fox Broadcasting Channel, Fox Sports, 20th Century Fox, and various notable newspaper publications such as *The New York Post* and the book publisher HarperCollins. It also recently entered cyberspace by purchasing the massively popular social network MySpace.
The women have launched a massively visible barricade and protest around any and all News Corporation buildings in New York, especially Fox News, complete with picket signs, megaphone chants, and so on. They particularly made signs referring to Ailes and O'Reilly's attempt to deflect from the allegations by claiming that they were orchestrated as revenge by Charlie Rose, the former PBS and CBS anchor who was fired over claims of sexual harassment. One notable sign says, "If Bill and Roger want to deflect onto Charlie Rose, we'll just scream louder!"
As of this moment, no statement from Fox News or News Corporation has come to comment on the allegations. Murdoch himself refused to comment.

**"O'Reilly Dropped By Fox," *The Wasington Post*, April 12, 2006**
Bill O'Reilly, the blustering, bloviating lead talent of Fox News Channel, has officially been terminated today from the network by James Murdoch, son of Rupert, the head of News Corporation, Fox News' corporate parent.
"It is with a heavy heart that we say goodbye to Bill O'Reilly," the younger Murdoch's statement reads. "His long service with Fox News Channel since its inception are an important part and legacy of what has helped make it one of America's leading news networks today. But we take reports and allegations of like this completely seriously, and it is within everyone's best interest to take this action."
Last week, O'Reilly, alongside Fox News CEO Roger Ailes, were accused of a continual pattern of sexual harassment and sexual assault by dozens of women. Though both men angrily denied the claims, the women turned a glaring spotlight onto the network and claims of a culture of deep misogyny and continual "rape culture", aided and abetted, encouraged, even, by Rupert Murdoch. The news became so massive, that advertisers who had bought airtime to go with O'Reilly's slot, started severing ties. By the point of James Murdoch's announcement, 75 percent of all O'Reilly's advertisers had left, effectively leaving him floundering like a fish on land.
No word was given about the status of Ailes at the network, though it appears that the younger Murdoch attempted to convince the board to fire him, to no avail. Rumors have also surfaced that he did not have express permission to take charge and fire O'Reilly, as it appears that Rupert Murdoch did not give express authority for the act, but that his son seized the opportunity and took it unilaterally.
Reports of who will take O'Reilly's slot have not been confirmed, though many expect that Sean Hannity and Alan Colmes' show will be moved there, or that former CNN *Crossfire* talent Tucker Carlson, the conservative-leaning section of the show who was famously trounced and humiliated by comedian and *The Daily Show* host Jon Stewart in 2004, may be hired to do so.

**"Ailes Out At Fox News, Network Morale Shaken," *The Washington Post*, September 8, 2006**
Yesterday, the board of directors at Fox News Channel, including Rupert Murdoch's son James, officially removed Roger Ailes as CEO of the network, as well as booting him from the board itself. The news means that Ailes, who has guided the network since it was founded in 1996, is out, and Fox News is left without its main guiding voice.
"Today, the board has formally voted to remove Roger Ailes," the younger Murdoch's statement reads. "Though Roger has long been an integral part of helping make Fox News what it is today, and whose vision has helped shape it, we cannot in good conscience continue any longer with him at the helm. Bill Shine is Fox News' new CEO and chairman, and we expect that Bill will help us and be the leader we need now."
Inside Fox News, the results are quite polarizing. Half the employees and talent are quite hopeful that the network will turn a corner, especially in light of a new set of rules and guidelines of ethics and behavior written up by James Murdoch, to be applicable not just to Fox News but to any and all subsidiaries of News Corporation, in America, Great Britain, and Australia.
Alan Colmes, the "token liberal" (as described by Fox News detractors) hired by Fox News as a counterpoint to his colleague and cohost Sean Hannity, praised the actions and guidelines. "I think a new day is dawning on all of us, and the fact that we are moving to reform our workplace culture is a welcoming sign. I think Bill Shine will be a great choice as CEO."
However, the other half is apoplectic and livid at Ailes' ouster, especially the fact that James Murdoch has allegedly done so unilaterally, without getting express permission from his father or being given the official power to do so. They see the removal of Ailes, and of Bill O'Reilly months ago, as a sign that Fox News is losing sight of its mission and purpose, and kowtowing to the "forces of political correctness and the liberal media to steamroll all over conservatives."
Sean Hannity particularly went on quite a venomous tirade during last night's broadcast of his show, saying, "Roger Ailes is a true patriot, a proud American doing his duty, and he's being punished for it. Bill O'Reilly is one of my best friends, an absolute mensch, a man of integrity and his word, and he was removed despite having done nothing wrong! Despite the fact that the charges against him are thoroughly baseless and proven lies."
Hannity even went further in that, tying in the ousters of Ailes and O'Reilly with recent purges of "hate speech" content on the Internet (especially on the free streaming video library site YouTube), the David Geffen trial, and Springbok Productions' role in the trial and the the recent barrage of unflattering press for its now-cancelled alliance with Mel Gibson, completely ripped up after his recent DUI arrest and anti-Semitic tirade. "All of this comes together. Kurt Cobain is the Pied Piper of the left, leading them in lockstep to a cliff, a cliff that they will gladly throw America off of. The left is continuing on their crusade to outlaw conservative thought in this country. Why? Because they don't like President Bush, they refuse to do their patriotic duty to fight terrorism abroad, they push their dangerous and foolish eco-nut agendas to put oil workers, coal miners, farmers, ranchers and lumberjacks out of work and into economic ruin. They're coming for your guns, they're coming for your Bibles, they're coming for your horses and cows, they're coming for your pigs, they're coming for your light bulbs, and they're coming for your cars. They will not stop until they've completed their mission."
Calls for Rupert Murdoch to comment were answered with the announcement that the elderly billionaire has been hospitalized for a bad case of pneumonia, and is not expected to return to work for some time, possibly months. In the meantime, his sons, James and Lachlan, are dividing his duties between them.
The brothers are as opposite as can be, as James is more left-of-center compared to the rest of his family, while Lachlan is a true unreconstructed neoconservative who thinks that News Corporation's news holdings aren't conservative enough. How they will manage to hold down the fort in their father's absence remains to be seen.

**"Hannity Quits On Air (And It's All Borat's Fault)," *The Washington Post*, January 6, 2007**
Last night, during the broadcast of *Hannity & Colmes*, cohost Sean Hannity stunned his employer, Fox News Channel, and the millions of households tuned in to the show, by resigning on air. This came after several days' worth of rumors that he might do so.
The specific reason doing so was because of being reminded of an earlier broadcast in 2005 when Hannity was interviewing a reporter from Kazakhstan, who had made a stir after giving an incoherent, supposedly patriotic speech at a rodeo in Salem, Virginia, where he then sang what he said was the Kazakh national anthem to the tune of "The Star-Spangled Banner." The interview did not go well, as the figure in question made Hannity thoroughly uncomfortable with his behavior and statements.
However, it turned out to be an elaborate prank. The man in question was not actually a Kazakh journalist, but instead the actor Sacha Baron Cohen, star of *Da Ali G Show*, in disguise for a mockumentary entitled *Borat: Cultural Learnings for Make Benefit Glorious Nation of Kazakhstan*, directed by *Masked and Anonymous* director Larry Charles, produced by *Austin Powers* director Jay Roach and Springbok Productions, and ironically distributed by 20th Century Fox, a corporate sibling of Fox News.
The movie, released a few months ago, concerns Baron Cohen's character, Borat Sagadiyev, who goes on assignment to make a report about America with his producer, Azamat Bagatov (Ken Daviditan), but who gets sidetracked when he suddenly falls in love with Pamela Anderson and goes cross-country to find her. On the way, Borat interviews and insults feminists, driver's ed instructors, a doctor, a souvenir stand owner who owns a lot of Confederacy-centric items, random citizens while ostensibly talking about the trial of Harvey Weinstein (this particular scene was shot in the spring of 2005 at that time), a Pentecostal revival gathering, cowboys at the aforementioned rodeo, Jewish citizens (this is a running theme, with Kazakhstan supposedly hosting "The Running of the Jew" and, in a clip from *Da Ali G Show* spliced into the movie, Borat goes onstage at a country-western bar and sings a song with the chorus of "Throw the Jew down the well,") horribly racist college students in a Winnebago, politicians, and yes, Sean Hannity. All of this continues until Borat and Azamat reach Hollywood and find Ms. Anderson (who was in on the joke) at a signing of her roman a clef *Star* and attempts to kidnap her into a forced marriage, to no avail.
The movie has been a rousing success, receiving universal acclaim and having been a box office smash, for its incredibly clever satire and ability to get the unsuspecting interview subjects to reveal their true selves so fully. When the Hannity interview's context was revealed by the film's release, he was ribbed incessantly for falling for the prank, but Hannity went on incredibly unhinged tirades against Baron Cohen, Springbok, and those who had bought tickets to the movie. He especially aimed venomous barbs at comedians Bill Maher and Jon Stewart, who made several pointed jokes at Hannity's expense.
It all came to a head last night, when a beet-faced Hannity, sweating profusely down his flushed cheeks, exploded into yet another tirade, the climax of which was: "I cannot take the endlessly vitriolic attacks from the left through their sick entertainment, the type that Mr. Baron Cohen is profiting off of unfairly. And just like one of our most misunderstood Presidents once said, you won't have Sean to kick around anymore." The show ended 20 minutes before schedule, with the channel practically silent and stunned.
When news of Hannity's resignation came out, Rupert Murdoch's sons James and Lachlan, who have been running News Corporation while their father recuperates from recent health setbacks, allegedly got involved into a blazing fistfight and apparently caused significant collateral damage. Calls for Fox News, News Corp, and the Murdoch siblings to comment went unanswered.

**“Murdoch Papers Paid £1 Million To Gag Phone Hacking Victims,” by Nick Davies, *The Guardian*, July 8, 2009**
Rupert Murdoch’s News Group newspapers has paid out more than £1 million to settle legal cases that threatened to reveal evidence of his journalists’ repeated involvement in the use of criminal methods to get stories.
The payments secured secrecy over out-of-court settlements in three cases that threatened to expose evidence of Murdoch journalists using private investigators who illegally hacked into the mobile phone messages of numerous public figures as well as gaining unlawful access to confidential personal data, including tax records, social security files, bank statements and itemized phone bills. Cabinet ministers, MPs, actors and sports stars were all targets of the private investigators.
Today, the *Guardian* reveals details of the suppressed evidence, which may open the door to hundreds more legal actions by victims of News Group, the Murdoch company that publishes the *News of the World* and *The Sun*, as well as provoking police inquiries into reporters who were involved and the senior executives responsible for them. The evidence also poses difficult questions for:
-Conservative leader David Cameron’s director of communications, Andy Coulson, who was deputy editor and then editor of the *News of the World* when, the suppressed evidence shows, journalists for whom he was responsible were engaging in hundreds of apparently illegal acts.
-Murdoch executives who, albeit in good faith, misled a parliamentary select committee, the Press Complaints Commission and the public.
-The Metropolitan police, which did not alert all those whose phones were targeted, and the Crown Prosecution Service, which did not pursue all possible charges against News Group personnel.
-The Press Complaints Commission, which claimed to have conducted an investigation, but failed to uncover any evidence of illegal activity.
The suppressed legal cases are linked to the jailing in January 2007 of a *News of the World* reporter, Clive Goodman, for hacking into the mobile phones of three royal staff, an offense under the Regulation of Investigatory Powers Act. At the time, News International said it knew of no other journalist who was involved in hacking phones and that Goodman had acted without their knowledge.
But one senior source at the Met told the *Guardian* that during the Goodman inquiry, officers found evidence of News Group staff using private investigators who hacked into “thousands” of mobile phones. Another source with direct knowledge of the police findings put the figure at “2000-3000” mobiles. They suggest that MPs from all three parties and cabinet ministers, including former Deputy Prime Minister John Prescott and former Culture Secretary Tessa Jowell, were among the targets.
Last night, Prescott said: “I think Mr. Cameron should be thinking of getting rid of Coulson.”
However, a spokeswoman for Cameron said the Tory leader was “very relaxed about the story.”
News International has always maintained it had no knowledge of phone hacking by anybody acting on its behalf.
Murdoch told Bloomberg news last night that he knew nothing about the payments. “If that had happened, I would know about it,” he said.
A private investigator who had worked for News Group, Glenn Mulcaire, was also jailed in January 2007. He admitted hacking into the phones of five other targets, including the chief executive of the Professional Footballers’ Association, Gordon Taylor. Among the phones he hacked were those of the Lib Dem MP Simon Hughes, Prince William, Princess Diana[1], model Elle MacPherson and football agent Sky Andrew. News Group denied all knowledge of the hacking, but Taylor last year sued them on the basis that they must have known about it.
In documents initially submitted to the high court, News Group executives said the company had not been involved in any way in Mulcaire’s hacking of Taylor’s phone. They denied keeping any recording or notes of intercepted messages. But, at the request of Taylor’s lawyers, the court ordered the production of detailed evidence from Scotland Yard’s inquiry in the Goodman case, and from an inquiry by the Information Commissioner’s office into journalists who dishonestly obtain confidential personal records.
The Scotland Yard files included paperwork which revealed that, contrary to News Group’s denial, Mulcaire had provided a recording of the messages on Taylor’s phone to a *News of the World* journalist who had transcribed them and emailed them to a senior reporter, and that a *News of the World* executive had offered Mulcaire a substantial bonus for a story specifically related to the intercepted messages.
Several famous figures in football are among those whose messages were intercepted. Coulson was editing the paper at this time. He said last night: “This story relates to an alleged payment made after I left the *News of the World* two and half years ago. I have no knowledge whatsoever of any settlement with Gordon Taylor.
“The Mulcaire case was investigated thoroughly by the police and by the Press Complaints Commission. I took full responsibility at the time for what happened on my watch but without my knowledge and resigned.”
The paperwork from the Information Commission revealed the names of 31 journalists working for the *News of the World* and *The Sun*, together with the details of government agencies, banks, phone companies and others who were conned into handing over confidential information. This is an offence under the Data Protection Act unless it is justified by public interest.
Senior editors are among those implicated. This activity occurred before the mobile phone hacking, at a time when Coulson was deputy and the editor was Rebekah Wade, now due to become chief executive of News International. The extent of their personal knowledge, if any, is not clear: the *News of the World* has always insisted that it would not break the law and would use subterfuge only if essential in the public interest.
Faced with this evidence, News International changed their position, started offering huge cash payments to settle the case out of court, and finally paid out £700,000 in legal costs and damages on the condition that Taylor signed a gagging clause to prevent him speaking about the case. The payment is believed to have included more than £400,000 in damages. News Group then persuaded the court to seal the file on Taylor’s case to prevent all public access, even though it contained prima facie evidence of criminal activity.
The Scotland Yard paperwork also provided evidence that the *News of the World* had been involved with Mulcaire in his hacking of the mobile phones of at least two other football figures. They filed complaints, which were settled this year when News International paid more than £300,000 in damages and costs on condition that they signed gagging clauses.
Taylor declined to make any comment. Goodman, now out of jail, said: “My comment is not even ‘no comment.’” A spokesman for News International said: “News International feels it is inappropriate to comment at this time.”
Last night, John Whittingdale, the Conservative MP who chairs the culture, media and sport select committee, said the revelation “raises a number of questions that we would want to put to News International.”
He added: “The fact that other people beyond the royal family had their calls intercepted was well known. But we were absolutely assured by News International that none of their journalists were aware of that, that Goodman was acting alone and that Mulcaire was a rogue agent.”
Asked if the committee would reopen the issue, he said: “The committee will want to discuss it very urgently. I think we will do so tomorrow morning, and if we decide that there are further questions to ask, then certainly we would summon back witnesses and ask those questions.”
Former *Sunday Times* editor Andrew Neil described the story last night as “one of the most significant media stories of modern times.” “It suggests that rather than being a one-off journalist or rogue private investigator, it was systemic throughout the *News of the World*, and to a lesser extent *The Sun*,” he said. “Particularly in the News of the World, this was a newsroom out of control.”

**“Tabloid Hack Attack On Royals, And Beyond,” by Don Van Natta, Jr., Jo Becker and Graham Bowley, *The New York Times*, September 1, 2010**
In November 2005, three senior aides to Britain’s royal family noticed odd things happening on their mobile phones. Messages they had never listened to were somehow appearing in their mailboxes as if heard and saved. Equally peculiar were stories that began appearing about Prince William in one of the country’s biggest tabloids, *News of the World*.
The stories were banal enough (Prince William pulled a tendon in his knee, one revealed). But the royal aides were puzzled as to how *News of the World* had gotten the information, which was known among only a small, discreet circle. They began to suspect that someone was eavesdropping on their private conversations.
By early January 2006, Scotland Yard had confirmed their suspicions. An unambiguous trail led to Clive Goodman, the *News of the World* reporter who covered the royal family, and to a private investigator, Glenn Mulcaire, who also worked for the paper. The two men had somehow obtained the PIN codes needed to access the voice mail of the royal aides.
Scotland Yard told the aides to continue operating as usual while it pursued the investigation, which included surveillance of the suspects’ phones. A few months later, the inquiry took a remarkable turn as the reporter and the private investigator chased a story about Prince William’s younger brother, Harry, visiting a strip club. Another tabloid, *The Sun*, had trumpeted its scoop on the episode with the immortal: “Harry Buried Face in Margo’s Mega-Boobs. Stripper Jiggled . . . Prince Giggled.”
As Scotland Yard tracked Goodman and Mulcaire, the two men hacked into Prince Harry’s mobile phone messages. On April 9, 2006, Goodman produced a followup article in *News of the World* about the apparent distress of Prince Harry’s girlfriend over the matter. Headlined “Chelsy Tears Strip Off Harry!” the piece quoted, verbatim, a voicemail Prince Harry had received from his brother teasing him about his predicament.
William and Harry’s mother, Princess Diana, was likewise targeted by the hacking reporters. Some embarrassing, sexually explicit voicemails between her and her then-current boyfriend were reported verbatim in *News of the World*, some of the lines even recalling ex-husband Prince Charles’ macho boasting to his future wife, Camilla, that “I fill your tank,” and referring to himself as wanting to be like a tampon.
The palace was in an uproar, especially when it suspected that the two men were also listening to the voice mail of Prince William, the second in line to the throne. They were even upset that Diana, someone who is hardly that close to Buckingham Palace anymore since her and Charles’ divorce in 1996, was targeted, and put old differences aside to make a united front against this intrusion. The eavesdropping could not have gone higher inside the royal family, since Prince Charles and the queen were hardly regular mobile phone users. But it seemingly went everywhere else in British society. Scotland Yard collected evidence indicating that reporters at *News of the* World might have hacked the phone messages of hundreds of celebrities, government officials, soccer stars — anyone whose personal secrets could be tabloid fodder. Only now, more than four years later, are most of them beginning to find out.
As of this summer, five people have filed lawsuits accusing News Group Newspapers, a division of Rupert Murdoch’s publishing empire that includes *News of the World,* of breaking into their voicemail. Additional cases are being prepared, including one seeking a judicial review of Scotland Yard’s handling of the investigation. The litigation is beginning to expose just how far the hacking went, something that Scotland Yard did not do. In fact, an examination based on police records, court documents and interviews with investigators and reporters shows that Britain’s revered police agency failed to pursue leads suggesting that one of the country’s most powerful newspapers was routinely listening in on its citizens.
The police had seized files from Mulcaire’s home in 2006 that contained several thousand mobile phone numbers of potential hacking victims and 91 mobile phone PIN codes. Scotland Yard even had a recording of Mulcaire walking one journalist — who may have worked at yet another tabloid — step by step through the hacking of a soccer official’s voicemail, according to a copy of the tape. But Scotland Yard focused almost exclusively on the royals case, which culminated with the imprisonment of Mulcaire and Goodman. When police officials presented evidence to prosecutors, they didn’t discuss crucial clues that the two men may not have been alone in hacking the voicemail messages of story targets.
“There was simply no enthusiasm among Scotland Yard to go beyond the cases involving Mulcaire and Goodman,” said John Whittingdale, the chairman of a parliamentary committee that has twice investigated the phone hacking. “To start exposing widespread tawdry practices in that newsroom was a heavy stone that they didn’t want to try to lift.” Several investigators said in interviews that Scotland Yard was reluctant to conduct a wider inquiry in part because of its close relationship with *News of the World.* Police officials have defended their investigation, noting that their duties did not extend to monitoring the media. In a statement, the police said they followed the lines of inquiry “likely to produce the best evidence” and that the charges that were brought “appropriately represented the criminality uncovered.” The statement added, “This was a complex inquiry and led to one of the first prosecutions of its kind.” Officials also have noted that the department had more pressing priorities at the time, including several terrorism cases.
Scotland Yard’s narrow focus has allowed *News of the World* and its parent company, News International, to continue to assert that the hacking was limited to one reporter. During testimony before the parliamentary committee in September 2009, Les Hinton, the former executive chairman of News International who now heads Dow Jones, said, “There was never any evidence delivered to me suggesting that the conduct of Clive Goodman spread beyond him.”
But interviews with more than a dozen former reporters and editors at *News of the World* present a different picture of the newsroom. They described a frantic, sometimes degrading atmosphere in which some reporters openly pursued hacking or other improper tactics to satisfy demanding editors. Andy Coulson, the top editor at the time, had imposed a hypercompetitive ethos, even by tabloid standards. One former reporter called it a “do whatever it takes” mentality. The reporter was one of two people who said Coulson was present during discussions about phone hacking. Coulson ultimately resigned but denied any knowledge of hacking.
News of the World was hardly alone in accessing messages to obtain salacious gossip. “It was an industrywide thing,” said Sharon Marshall, who witnessed hacking while working at *News of the World* and other tabloids. “Talk to any tabloid journalist in the United Kingdom, and they can tell you each phone company’s four-digit codes. Every hack on every newspaper knew this was done.”
Bill Akass, the managing editor of *News of the World*, dismissed “unsubstantiated claims” that misconduct at the paper was widespread and said that rigorous safeguards had been adopted to prevent unethical reporting tactics. “We reject absolutely any suggestion or assertion that the activities of Clive Goodman and Glenn Mulcaire, at the time of their arrest, were part of a ‘culture’ of wrongdoing at the *News of the World* and were specifically sanctioned or accepted at senior level in the newspaper,” Akass wrote in an email.
He accused *The New York Times* of writing about the case because of a rivalry with a competing media company, specifically against Murdoch’s News Corporation, which owns Dow Jones (*The Wall Street Journal, Barron’s*), *The New York Post*, book publisher HarperCollins, 20th Century Fox, Fox Broadcasting Channel, Fox News Channel, Fox Business Network and Fox Sports, in addition to the News International assets in Britain and Australia.
In February, the parliamentary committee issued a scathing report that accused *News of the World* executives of “deliberate obfuscation.” The report created a stir yet did not lead to a judicial inquiry. And Scotland Yard had chosen to notify only a fraction of the hundreds of people whose messages may have been illegally accessed — effectively shielding News of the World from a barrage of civil lawsuits. The scandal appeared to be over, especially for Coulson, who had been hired by the Conservative Party to help shape its message in the run-up to the general election. In May, when David Cameron became prime minister, he rewarded Coulson with the top communications post at 10 Downing Street.
But the hacking case wouldn’t go away. Two victims notified by Scotland Yard sued the paper and negotiated agreements, one for a million pounds. Emboldened, lawyers began rounding up clients and forcing the Metropolitan Police (known as Scotland Yard) to reveal whether their names were in Mulcaire’s files. Cases are being brought by a member of Parliament, a woman who was sexually assaulted when she was 19 and a prominent soccer commentator who happens to work for one of Murdoch’s companies. “Getting a letter from Scotland Yard that your phone has been hacked is rather like getting a Willy Wonka golden ticket,” declared Mark Lewis, a lawyer who won the first settlement. “Time to queue up at Murdoch Towers to get paid.”
For decades, London tabloids have merrily delivered stories about politicians having affairs, celebrities taking drugs and royals shaming themselves. Gossip could end careers, giving the tabloids enormous power. There seemed to be an inverse relationship between Britain’s strict privacy laws and the public’s desire to peer into every corner of other people’s lives. To feed this appetite, papers hired private investigators and others who helped obtain confidential information, whether by legal or illegal means. The illicit methods became known as “the dark arts.” One subspecialty involved “blagging” — getting information by conning phone companies, government agencies and hospitals, among others. “What was shocking to me was that they used these tactics for celebrity tittle-tattle,” said Brendan Montague, a freelance journalist. “It wasn’t finding out wrongdoing. It was finding out a bit of gossip.”
Steve Whittamore, a private investigator who worked for numerous tabloids, himself became the subject of headlines in 2005, after the authorities seized records from his home that revealed requests by hundreds of journalists for private information. “There was never an instance of me doing anything other than what I was asked,” said Whittamore, who now runs a website that tracks local crime. He eventually pleaded guilty, though no journalists were ever charged. Among Whittamore’s clients was *News of the World*, where he worked for 19 reporters and editors.
Rupert Murdoch purchased the once-sleepy Sunday tabloid in 1969. Although the paper was not immune to the industry’s decline — its circulation is now 2.9 million, down from 4 million a decade ago — it remains a powerful presence. Sex scandals aside, the paper has exposed wrongdoing resulting in dozens of criminal convictions.
Murdoch unabashedly uses his London papers — which also include *The Sun, The Times of London* and *The Sunday Times* — to advance a generally conservative, pro-business line, much as he has also done in Australia, and certainly has done in America. Beginning in the late 1970s, his papers supported Margaret Thatcher and the Conservative Party, attacking her Labour Party rivals in editorials and news articles. Years later, Labour’s Tony Blair assiduously courted and won Murdoch’s backing for his more centrist politics. “You had huge influence as editor,” said Phil Hall, who ran *News of the World* from 1995 to 2000.
One standout at News International was Andy Coulson, who made his name as a young reporter in the early 1990s writing for *The Sun’s* showbiz column. A native of blue-collar Essex in southern England, Coulson had a sharp instinct for what readers wanted. He famously once asked Prime Minister Tony Blair and his wife, Cherie, whether they were members of the mile-high club. In 2000, Coulson moved to *News of the World* as second in command under the editor, Rebekah Brooks. When she left three years later, Coulson, only 34 at the time, was the obvious choice to succeed her.
When a bottlenose whale became stranded in the Thames River in January 2006, the London tabloids raced to put reporters and photographers on boats. One *News of the World* reporter watched in horror as a wetsuit-clad rival from *The Sunday Mirror* jumped into the freezing water while a colleague snapped pictures. Back at *News of the World*, editors were not happy.
“If he doesn’t get into that river and get a picture of us saving the whale by pushing it out to sea,” one journalist recalled Coulson saying of his reporter, “he doesn’t need to bother coming back.” Not to be outdone, Coulson dispatched another reporter to the North Sea to “find the whale’s family.”
The episode was vintage Coulson, who ruled the newsroom with singleminded imperiousness: get the story, no matter what. Reporters donned lingerie to infiltrate suburban swinger parties. Others were deployed within the paper’s headquarters, on the sprawling News International campus in East London, seemingly for the amusement of editors. One reporter was ordered to spend 24 hours inside a plastic box, in the newsroom, to emulate a stunt by the magician David Blaine.
Despite the earlier arrest of the private investigator Steve Whittamore, the dark arts were still widely in use. Former reporters said both the news and features desks employed their own investigators to uncover medical records, unlisted addresses, phone bills and so on. Matt Driscoll, a former sports reporter, recalled chasing a story about the soccer star Rio Ferdinand. Ferdinand claimed he had inadvertently turned off his phone and missed a message alerting him to a drug test. Driscoll had hit a dead end, he said, when an editor showed up at his desk with the player’s private phone records. They showed Ferdinand had made numerous calls during the time his phone was supposedly off. Driscoll was disciplined for supposed inaccuracies and later dismissed; he proceeded to win 800,000 pounds in court, which found he had been bullied by Coulson and other editors.
Around the newsroom, some reporters were getting stories by surreptitiously accessing phone messages, according to former editors and reporters. Often, all it took was a standard four-digit security code, like 1111 or 4444, which many users did not bother to change after buying their mobile phones. If they did, the paper’s private investigators found ways to trick phone companies into revealing personal codes. Reporters called one method of hacking “double screwing” because it required two simultaneous calls to the same number. The first would engage the phone line, forcing the second call into voicemail. A reporter then punched in the code to hear messages, often deleting them to prevent access by rival papers. A dozen former reporters said in interviews that hacking was pervasive at *News of the World*. “Everyone knew,” one longtime reporter said. “The office cat knew.”
One former editor said Coulson talked freely with colleagues about the dark arts, including hacking. “I’ve been to dozens if not hundreds of meetings with Andy” when the subject came up, said the former editor, who spoke on condition of anonymity. The editor added that when Coulson would ask where a story came from, editors would reply, “We’ve pulled the phone records” or “I’ve listened to the phone messages.”
Sean Hoare, a former reporter and onetime close friend of Coulson’s, also recalled discussing hacking. The two men first worked together at *The Sun*, where, Hoare said, he played tape recordings of hacked messages for Coulson. At *News of the World*, Hoare said he continued to inform Coulson of his pursuits. Coulson “actively encouraged me to do it,” Hoare said.
Hoare said he was fired during a period when he was struggling with drugs and alcohol. He said he was now revealing his own use of the dark arts — which included breaking into the messages of celebrities like David and Victoria Beckham — because it was unfair for the paper to pin the blame solely on Goodman. Coulson declined to comment for this article but has maintained that he was unaware of the hacking.
Reporters knew they would be rewarded or ostracized based on their ability to beat the competition. It made for an unusual pecking order. On top was Neville Thurlbeck, whose fervor for scoops was legend. He was acquitted of bribing a police officer for information. But in another case, the paper was found to have violated the privacy of the subject of his front page story headlined “Sick Nazi Orgy.” The paper’s parent company paid a £60,000 settlement, and Thurlbeck retained his title as chief reporter.
Clive Goodman, the veteran royals reporter, seemed to be on the opposite trajectory. In the 1990s, Goodman crushed competitors with exclusives on Princess Diana. Now, clad in a waistcoat and wearing a pocket watch, he cut the figure of an old-school Fleet Street character whose best stories were behind him, especially given Diana’s moves, between 1998 and 2005, to regain a considerable measure of privacy. If Glenn Mulcaire, the paper’s top investigator, could help him break stories by hacking into the messages of the royal household, Goodman could revive his career.
On the morning of August 8, 2006, Scotland Yard detectives arrived with a search warrant at *News of the World*. For six months, officials had tracked Clive Goodman and Glenn Mulcaire as they hacked into the voicemail of the royal household, according to people with knowledge of the investigation. One royal aide’s voice mail was called 433 times, records show. In the newspaper’s lobby, detectives faced resistance from executives and lawyers for the paper over searching the newsroom, former police officials said. As word of the detectives’ arrival ricocheted around the office, two veteran reporters stuffed reams of documents into trash bags, one reporter recalled, and hauled them away. The precaution proved unnecessary. Detectives limited their search to Goodman’s desk. “We only had authority to do that desk,” a senior Metropolitan Police official said. “We were nervous about doing any extra search.”
At the same time, other detectives descended on Mulcaire’s modest home in Cheam, a southwestern suburb of London. Inside, the police found what one investigator called “a massive amount of evidence” — dozens of notebooks and two computers containing 2978 complete or partial mobile phone numbers and 91 PIN codes; at least three names of other *News of the World* journalists; and 40 tape recordings made by Mulcaire. Both Mulcaire and Goodman were arrested that day, charged with conspiracy to intercept communications without lawful authority. *News of the World* editors said they were stunned by the arrests and vowed to conduct an internal investigation.
At Scotland Yard, the task of investigating the case fell to the counterterrorism branch, which was responsible for the security of the royal family. It was an extraordinarily busy time for the unit, which was dealing with the aftermath of the 2005 London transit bombings and was now involved in a complex surveillance operation of two dozen men believed to be plotting to bomb transoceanic airliners. Several former senior investigators said the department was dubious about diverting resources. “We were distracted, obviously,” one former senior Scotland Yard investigator said. Scotland Yard also had a symbiotic relationship with *News of the World* spanning decades. The police sometimes built high-profile cases out of the paper’s exclusives, and *News of the World* reciprocated with fawning stories of arrests. One notable such “glory moment” was in 1967, with the “Redlands bust” of Mick Jagger and Keith Richards for possession.
Within days of the raids, several senior detectives said they began feeling internal pressure. One senior investigator said he was approached by Chris Webb, from the department’s press office, who was “waving his arms up in the air, saying, ‘Wait a minute — let’s talk about this.’” The investigator, who has since left Scotland Yard, added that Webb stressed the department’s “long-term relationship with News International.” The investigator recalled becoming furious at the suggestion, responding, “There’s illegality here, and we’ll pursue it like we do any other case.” In a statement, Webb said: ‘‘I cannot recall these events. Police officers make operational decisions, not press officers. That is the policy of the Metropolitan Police Service and the policy that I and all police press officers follow.’’
That fall, Andy Hayman, the head of the counterterrorism branch, was in his office when a senior investigator brought him 8 to 10 pages of a single-spaced “target list” of names and mobile phone numbers taken from Mulcaire’s home. It read like a British society directory. Scotland Yard officials consulted with the Crown Prosecution Service on how broadly to investigate. But the officials didn’t discuss certain evidence with senior prosecutors, including the notes suggesting the involvement of other reporters, according to a senior prosecutor on the case. The prosecutor was stunned to discover later that the police had not shared everything. “I would have said we need to see how far this goes” and “whether we have a serious problem of criminality on this news desk,” said the former prosecutor, who declined to speak on the record.
Scotland Yard officials ultimately decided the inquiry would stop with Mulcaire and Goodman. “We were not going to set off on a cleanup of the British media,” a senior investigator said. In fact, investigators never questioned any other reporters or editors at *News of the World* about the hacking, interviews and records show. A police spokesman rejected assertions that officials failed to fully investigate. He said the department had worked closely with prosecutors, who had “full access to all the evidence.” A former senior Scotland Yard official also denied that the department was influenced by any alliance with *News of the World.* “I don’t think there was any love lost between people inside the investigation and people in the press,” the former official said.
In addition to the royal household (including those not as directly intertwined anymore like Diana or Sarah Ferguson), Scotland Yard alerted five other victims whose names would appear in the indictment of Mulcaire. Of the remaining hundreds who potentially had their phones broken into, the police said they notified only select individuals with national security concerns: members of the government, the police and the military.
On August 24, 2006, George Galloway, a member of Parliament, was alerted by a detective that his messages had been hacked. Galloway said the detective urged him to change his PIN code. But when Galloway asked who had accessed his phone, the man from Scotland Yard “refused to tell me anything.”
With their heads bowed, the private investigator Glenn Mulcaire and the reporter Clive Goodman stood in a London courtroom on January 26, 2007, and apologized to the princes and their aides for the “gross invasion of privacy.” The men were awaiting sentencing after having each pleaded guilty to one count of conspiracy to intercept communications of the royal aides. But there was no pretense that the abuse was confined to that single count. Mulcaire admitted to hacking the messages of the five other victims: Gordon Taylor, chief executive of the Professional Footballers’ Association; Simon Hughes, a member of Parliament; the model Elle Macpherson; Gordon Ramsay, the hot-tempered celebrity chef; and Sky Andrew, who represented some of England’s biggest soccer stars.
The judge concluded from this that Mulcaire had not just worked with Goodman, who wrote exclusively about the royal family, but also with “others at News International.” In Mulcaire’s defense, his lawyer told the judge that his client thought others were hacking, “which for him was one of the reasons why he did not believe it was illegal.” Goodman’s lawyer noted that his client, too, “lived his life in a world where ethical lines are not always so clearly defined or at least observed.” Both men were sentenced to several months in prison and were dismissed by *News of the World*. Andy Coulson resigned, accepting “ultimate responsibility” for the hacking during his watch. Not long after, the parliamentary committee opened hearings on the matter. On March 6, Les Hinton, then the executive chairman of News International, told members that as far as he was aware, Goodman was “the only person” at the paper who knew about the hacking. “I believe absolutely that Andy did not have knowledge of what was going on,” Hinton said. Goodman and Mulcaire proceeded to sue the paper for wrongful dismissal. Court records show that News International paid 80,000 pounds to Mulcaire. Goodman received an undisclosed amount. Both men, who signed confidentiality agreements, declined to be interviewed for this article.
That May, Coulson was hired to head the communications team of the Conservative Party. The position was colloquially known as chief spin doctor, and filling it with a tabloid editor was not without precedent. Years before, Tony Blair had chosen a former political editor at *The Mirror* to perform the job for the Labour Party. In Coulson, the Tories also got someone with inside connections to Rupert Murdoch’s influential media empire, whose support the Tories were trying to wrest from Labour and Prime Minister Gordon Brown.
For *News of the World*, the events that summer seemed auspicious. Goodman and Mulcaire were no longer at the paper, evidence remained filed away at Scotland Yard and countless people had no idea their phone messages might have been hacked. But like the many secrets *News of the World* famously exposed, the paper’s own would not stay hidden. Less than six months later, in early 2008, trouble was reignited by a lawyer for Gordon Taylor, the soccer association executive whose phone Mulcaire had admitted to hacking. The lawyer, Mark Lewis, said he believed that he could explicitly link the eavesdropping to an article the paper had prepared a year earlier alleging an affair between Taylor and his assistant. Both Taylor and the woman had adamantly denied the affair, but *News of the World* claimed it obtained the story through “proper journalistic inquiry.” Lewis ultimately persuaded the paper to kill the story, but the phrase stuck with him. He now suspected “improper” was a more fitting description.
In the spring, Lewis met with Tom Crone, the chief legal counsel for News International, to try to settle the matter without going to court. “We thought it had all gone away,” Crone said, according to three people with knowledge of the meeting.
“I want £250,000,” Lewis told Crone.
Crone laughed and walked out. (Crone declined to discuss details of the meeting but disputed that Lewis asked for that amount.)
Lewis, who is 45, hardly fit the profile of a high-powered London lawyer with the resources and gumption to take on News International. He worked in the more proletarian city of Manchester, where he sometimes showed up at the office wearing black jeans and a punk T-shirt, his hair a spiky peroxide blond. Nonetheless, shortly after the meeting, he filed a lawsuit on Taylor’s behalf against News International and Mulcaire. Lewis’s suspicions on the eavesdropping were confirmed later that year, when Scotland Yard was compelled to produce the relevant evidence it had collected at Mulcaire’s home. A draft of the paper’s unpublished article about Taylor’s alleged affair indicated it was based on a voicemail message he had received from his assistant. Lewis said the message went: “Thank you for yesterday. You were great.” The paper assumed “she was talking about shagging,” Lewis explained. In reality, she was referring to a speech Taylor gave at her father’s funeral. “The story had been made up,” Lewis said.
Other items turned over by Scotland Yard pointed to additional journalists at *News of the World.* One was an email containing the transcript of hacked messages that had been sent by a reporter at the paper. The email opened, “This is the transcript for Neville.” There was only one Neville on staff: Neville Thurlbeck, the paper’s chief reporter, who helped write the original story on Prince Harry’s strip club escapades. (The paper has said Thurlbeck had no knowledge of the email.) Another item was a contract signed by an editor for Mulcaire to work on a story about Taylor. Also turned over was the audiotape that Mulcaire made instructing a journalist on how to access Taylor’s voice mail. (It’s unclear whether investigators tried to figure out his identity. Dialing the phone number deduced by listening to the tape led The Times to a reporter, but one who may not have worked at *News of the World*.)
On June 27, 2008, the judge in the case ordered Mulcaire to identify the journalist and release other information. Within 24 hours, the paper’s lawyers called Lewis to settle. Taylor received a £700,000 settlement, which included legal expenses. Two of Taylor’s associates whose phones were also hacked received additional money. The package approached one million pounds. The settlement remained under wraps until July 9, 2009, when *The Guardian* broke the story.
While occasional articles appeared about the various goings-on at *News of the World*, the scandal was somewhat of a nonscandal in the other tabloids. But *The Guardian*, a Labour-oriented paper with an undisguised disdain for Murdoch’s publications, aggressively pursued the hacking episode. Its exclusive on the Taylor settlement prompted the parliamentary committee to convene new hearings. John Whittingdale, the committee’s chairman and a Tory, said he felt misled by News International executives who testified two years before that Goodman and Mulcaire acted alone. At the new hearings that July, Coulson maintained he had been unaware of the illegal activities. “I have never condoned the use of phone hacking, and nor do I have any recollection of incidences where phone hacking took place,” he said.
As television cameras rolled, Adam Price, a committee member, pointed to the paper’s story about the lapdancing message Prince William had left on his brother’s phone. As editor, Price asked Coulson, you “would not have checked the provenance of that story?”
“Not necessarily, no,” Coulson replied, “and I do not remember the story.”
Two months later, his former boss, Les Hinton, who was now running Dow Jones, testified by videoconference from New York. Hinton rejected suggestions by committee members that the payments made to Goodman and Mulcaire after their dismissals were intended to buy their silence. “I cannot actually see what silence there was left” after months of police investigation, said Hinton, who declined to comment for this article.
During a recent interview, the committee chairman reread portions of that testimony, pausing to laugh at Hinton’s repeated “I do not recall” or “I do not know” responses. “This was just a masterful performance by Les Hinton,” Whittingdale said. “We all sat in awe.”
When the committee released its findings this past February, it criticized the police, saying Scotland Yard officials had evidence that merited a wider investigation. The committee reserved its harshest words for News International executives, whom it assailed for “collective amnesia.” Tom Watson, a committee member, later said that the eavesdropping “went to the heart of the British establishment, in which police, military, royals and government ministers were hacked on a near industrial scale.”
When *The Guardian* kept publishing details about the Taylor settlement as well as further scoops about the scandal, the litigation floodgates opened. More than three years after Scotland Yard closed the official investigation, solicitors and barristers now scrambled to bring new cases against News International and the police. Charlotte Harris, who represented various victims, said that because of the way Scotland Yard handled the cases, “it has fallen upon the potential victims to make their own inquiries.” As a first step, potential plaintiffs needed to get confirmation from Scotland Yard on whether their names or phone numbers were found among the evidence. Scotland Yard initially promised prosecutors it would alert everyone named in the files, but it didn’t. One of Harris’s other clients, the victim in a high-profile sexual assault investigation seven years ago, wrote to the police in January to see if her name was in the files. The woman suspected her phone may have been hacked because details about her life appeared in *News of the World* and other tabloids during coverage of her ordeal. She had been convinced the police or her friends were selling the information. Two months after writing to the police, she received a letter confirming that her number had been found among Mulcaire’s records. The letter said the evidence did not necessarily mean her messages had been accessed and suggested she contact her phone service provider, “who may be able to assist further.” The woman and other potential hacking victims said that by sitting on the evidence for so long, the police have made it impossible to get information from phone companies, which do not permanently keep records. “It was disingenuous, to say the least, for Scotland Yard to say that,” the woman said. The police recently confirmed that the phone numbers of two friends were also found in Mulcaire’s records, she added. “I think I could have been spared a lot of angst about who I could trust and who I couldn’t trust had they told me,” she said.
Three plaintiffs are jointly seeking a judicial inquiry into Scotland Yard’s handling of the hacking case. The plaintiffs, who include a former deputy assistant commissioner of the Metropolitan Police, say their rights were violated when the police failed to inform them that their names were found in Mulcaire’s documents. The former official, Brian Paddick, scoffed at Scotland Yard’s explanation that the appearance of his name didn’t necessarily mean that he was hacked. “It’s a mealymouthed way of saying, ‘We’re not telling you any more, that maybe something happened but we can’t be bothered to investigate,’” he said. A police spokesman said the department has been “as open as possible whilst maintaining and protecting individuals’ personal information and respecting privacy.” Andy Hayman, who ran the case for Scotland Yard, has since retired. He declined to comment for this article. He is currently a columnist for *The Times of London*, where he has written in defense of the police investigation and maintained there were “perhaps a handful” of hacking victims. The paper is owned by News International.
By the spring of this year, News International’s papers had firmly switched their support from Labour to the Tories. An avalanche of unforgiving coverage culminated on April 8, one month before the general election, in a *Sun* story headlined “Brown’s a Clown.” Brown’s strategists assumed that Murdoch’s motives were not purely ideological. They drew up a campaign document conjuring Murdoch’s wishlist should David Cameron become Prime Minister. Among the top items they identified was the weakening of the government-financed BBC, one of Murdoch’s biggest competitors and long a target of criticism from News International executives. On May 11, David Cameron officially assumed the position and elevated Coulson to the head of communications. Within the week, Rupert Murdoch arrived at 10 Downing Street for a private meeting with the new Prime Minister. Cameron’s administration criticized the BBC in July for “extraordinary and outrageous waste” during difficult financial times and proposed cutting its budget.
At *News of the World*, editors said they had imposed a policy of zero tolerance of hacking. Whittingdale, the head of the select committee, said he was also assured by News International executives that hacking would not be permitted. “We have seen no evidence to suggest that it is still continuing,” he said. But in recent months, *News of the World* executives were notified of another suspicious episode. A phone company had alerted a television personality that someone called her mobile phone in a possible unauthorized attempt to access her voicemail, according to two people with knowledge of the incident. A court order ensued, compelling the phone company to divulge the source of the call. The number was traced to a reporter at *News of the World*. The paper said the journalist “has been suspended from reporting duties” while it conducts an investigation.

**“The Dark Arts,” by Sarah Ellison, *Vanity Fair*, June 2011**
*It started when* News of the World *hacked into the voicemails of the British royal household, in 2005, touching off a scandal that Rupert Murdoch’s News Corporation-and, apparently, the British authorities-tried to contain. After a score of lawsuits and new arrests, the cover-up is falling apart.*
The Pugin Room in the Houses of Parliament is a small chamber where tea and other refreshments are served in a comfortable setting overlooking the Thames. Named for the architect who designed the elaborate Gothic Revival interiors of the parliamentary complex, it is wood-paneled and ornate, with small, low tables that can’t quite hide a worn red carpet. The quiet conversations are occasionally interrupted by the clanging of a bell that notifies members of an upcoming vote.
In these surroundings I recently sat with John Prescott, the former Deputy Prime Minister to Tony Blair and currently (as Baron Prescott of Kingston-upon-Hull) a member of the House of Lords. In 2006 one of Britain’s tabloid newspapers, *The Daily Mirror*, revealed that Prescott had been carrying on with a secretary in his office. *The Daily Mirror’s* competitors, eager to catch up, were scrambling for additional details. One of them, Rupert Murdoch’s *News of the World*, allegedly hacked the voicemail messages left on the telephone of Prescott’s chief of staff, Joan Hammell. Prescott had been aware at the time of something amiss—messages known to have been left had somehow been deleted—but he put it down to a technical glitch. Only later, as the dimensions of Britain’s widening phone hacking scandal began to emerge, was he able to piece a larger story together and then locate his own part of the story inside it.
After years of virtually ignoring evidence of phone hacking that it held in its possession, on April 5 Scotland Yard arrested the former assistant news editor of the *News of the World*, Ian Edmondson, and the paper’s chief reporter, Neville Thurlbeck, in connection with a new investigation. Three days later, after deftly stonewalling parliamentary inquiries and paying more than $2 million in settlements to keep the matter under wraps, Murdoch’s News Corporation offered an “unreserved apology and an admission of liability” to Joan Hammell and seven other victims of phone hacking. The seven are British actress Sienna Miller and her stepmother, Kelly Hoppen; a British member of Parliament, Tessa Jowell, and her husband, David Mills; a former Sky Sports commentator, Andy Gray; the soccer agent Sky Andrew; and Nicola Phillips, a London-based publicist. All of these seven have filed lawsuits. The following day the company sent letters to nine more plaintiffs. Seven additional lawsuits have yet to be officially filed but appear imminent. News Corp. says it plans to offer a settlement to those with “justifiable claims” of phone hacking. “Every day there were more damaging disclosures, death by a thousand cuts,” one News Corp. executive close to the phone-hacking case recently told me, explaining the company’s decision to apologize.
On April 14, the police arrested a third reporter from the *News of the World*, James Weatherup. The next day, many of the players on the victims’ side of the story gathered in London’s Royal Courts of Justice to learn how the presiding judge planned to deal with their lawsuits. The judge identified four test cases that could proceed later this year—the suits brought by Miller, Hoppen, Gray, and Andrew.
The phone hacking scandal is the story of a breathtaking moral logjam, a cautionary tale about what can happen when the boundaries between powerful entities blur—when the police and the politicians and the media are jockeying for self-preservation, even as they are aligned in a common interest not to run afoul of one another. It is also what happens when one group, in this case News Corp., Murdoch’s media conglomerate, holds the goods on all the others.
Acting Alone?
Phone hacking is illegal in Britain, but that is a technicality. By all accounts, it was a practice that was indulged in by many reporters at many newspapers. “It started as a playground trick,” Paul McMullan, a former editor at the *News of the World*, told me. “It was so easy that everybody did it, and there was absolutely no reason not to.” No reason, that is, until there was a very good reason—when the practice suddenly went too far. In 2005, senior aides to the royal family noticed that voicemail messages they had never listened to were showing up as saved messages in their in-boxes. At the same time, the *News of the World* was running stories about the princes and their mother that could have been known only to a small circle of intimates. One article quoted verbatim from a voicemail message left by Prince William for his brother, in which William imitated Harry’s girlfriend, Chelsy Davy. A sexually explicit voicemail from Princess Diana to her then-boyfriend was leaked verbatim. Tipped off by the Palace, Scotland Yard launched an investigation.
In 2006 a reporter at the *News of the World*, Clive Goodman, and a private investigator who worked for the newspaper, Glenn Mulcaire, were found guilty of illegally listening in on the voicemail messages of the royal household. The two men received short prison terms. The editor of the newspaper, Andy Coulson, resigned from his position, though he stated that he had no personal knowledge of phone hacking being done by anyone in his newsroom. Coulson described the phone hacking of the princes as the work of a “rogue reporter.” He was backed up by other executives at News Corp., which owns Fox Entertainment, *The Wall Street Journal, The New York Post*, and several of the biggest newspapers in Britain, including the *News of the World*.
But the “rogue reporter” story wasn’t true. Phone hacking was common practice at the *News of the World*, and News Corp.’s stance finally crumbled amid a raft of lawsuits, a serious police investigation, and a steady stream of departures from the paper. Besides the victims already mentioned, the alleged targets of the *News of the World* apparently included the actor Hugh Grant, the comedian Steve Coogan, the model Elle Macpherson, the soccer stars John Terry and David Beckham, Beckham’s wife, former Spice Girl Victoria, and even (the British press has suggested) Prime Minister Gordon Brown. Nobody knows exactly how many people were targets altogether—a conservative estimate would be 2000, but the true figure could be double or triple that number. The scandal has touched some of the most prized executives at News Corp., such as Rebekah Brooks, the chief executive for its UK newspapers, and Les Hinton, the chief executive of Dow Jones & Co., who used to have Brooks’s job. Rupert Murdoch, 80, now must deal with allegations that some of his editors encouraged criminal activity and then repeatedly lied about it—sometimes under oath—to cover it up. The possible ramifications extend to British politicians of all stripes, who have for decades done what they could to curry favor with Murdoch, and to Scotland Yard, which has its own cozy relationships with the tabloids and is widely suspected of having tried to keep a lid on the revelations.
In the Pugin Room, Prescott is happily reliving the story of his unsatisfactory interactions with Scotland Yard. Prescott is something of a court jester and street brawler. When a protesting farmer appeared at one of his campaign rallies in 2001 and threw an egg at him, Prescott threw a punch back. A former ship’s steward and trade union activist, he revels in his northern accent and his outspoken and brusque persona.
Prescott’s barrel chest puffs out as he sips his tea. He leans back, his legs splayed. For nearly two years, ever since T*he Guardian* published a story revealing that his name had appeared on a list of public figures in handwritten notes belonging to Glenn Mulcaire, Prescott and his lawyers had been asking the police if they had any evidence of his voice mails being intercepted. He had received multiple letters in response, and gave me photocopies of them all.
When I look through the pages, I see that early letters informed him that the police had not uncovered “any evidence to suggest his phone had been tampered with.” The police wrote that they had referred the matter to the mobile phone companies, which would “take appropriate action,” if warranted.
Prescott persisted, and continued to be told that there was no evidence to indicate that Goodman and Mulcaire had attempted to intercept any of his voice messages. And yet, in some of those same letters, the police told Prescott that in Mulcaire’s files they had found two invoices from News International Supply Company, a subsidiary of News Corp., to Mulcaire’s private investigation company, for more than $400 each, with references such as “STORY: OTHER PRESCOTT ASSIST-TXT.” Scotland Yard added, “We do not know what this means or what it is referring to.”
When I look up at Prescott, he nods back. “So I said, ‘Why don’t you bloody open them up and see, and then we’ll know whether it is tapped. That’s what investigation is about!’ They still refused to do an investigation.”
“Coulson Had to Know”
Sean Hoare has a smooth and relaxed voice over the phone. He speaks slowly, almost with a drawl, and it seems as if he might chuckle at any moment. He sounds young. It’s hard to square his voice with the man who greets me at the train station in the working-class town of Watford, outside London. Hoare’s face is covered with broken blood vessels, and he walks stiffly, with a limp. He apologizes multiple times for the inadequacy of the restaurant we walk to for a coffee. Hoare is unemployed, though he takes occasional jobs around town. His days as a reporter have clearly taken their toll. “I was paid to drink and do drugs with rock stars,” he tells me, by way of explanation.
Hoare has agreed to talk to me about phone hacking at the *News of the World*, where he worked for more than 10 years. He is cagey on specifics, worried—as he needs to be—about the legal implications. What seems to offend Hoare more than anything is the fact that the practice of phone hacking, and digging into people’s private lives in general, was so widely encouraged by the paper’s top brass—and yet, when Goodman was found guilty of hacking into phones, he was abandoned by his former colleagues.
Hoare had worked closely with Andy Coulson for a long time. He described an enormously competitive tabloid culture: “Your brief, above all else, was to deliver.” The advantage of phone hacking, Hoare said, was that it provided verification of rumors. Once a journalist had confirmed a story through phone hacking, he could take the tidbit to the celebrity’s publicist and begin trading. “You’d say, I’ve got this detail. I don’t want to fuck over your client, but what do you have for me?” Then the publicist would offer an alternative story, and Hoare would back off, all the while knowing he had the initial piece of information if he ever needed it. “It’s not really about journalism,” he said. “It’s negotiation. It’s basically like Wall Street with words.”
The *News of the World* is no stranger to criticism of its methods. For instance, it employs “the Fake Sheikh,” who conducts sting operations on politicians and businessmen. In 2001 he recorded Prince Edward’s wife, Sophie, Countess of Wessex, making disparaging comments about certain members of the British government and appearing to use her royal status in order to gain clients for her public relations firm. To prevent publication of her comments, she agreed to an interview with the *News of the World* about her views on pregnancy and the possibility of undergoing IVF treatments. The paper published the story under the headline MY EDWARD’S NOT GAY, nodding to continued gossip about the prince’s sexuality. Last year, the Fake Sheikh taped Sarah Ferguson, the Duchess of York, offering access to her former husband, Prince Andrew (disgraced and exiled for his role in the Jeffrey Epstein saga), for more than $700,000.
The *News of the World* can be a cutthroat environment. Hoare recounted the story of a former colleague, Matt Driscoll, who was dismissed by the newspaper and then sued it, citing the bullying behavior of Coulson and other editors. In November 2009, the court found in favor of Driscoll, and the *News of the World* was required to pay him about $1.3 million.
Hoare left the paper in 2005, in part because of his drug and alcohol problems. He is an easy witness to discredit, and people I speak to at News Corp. don’t hesitate to try to do so. But it’s not hard to see why Hoare was such a good journalist in his day. He speaks softly enough that I have to lean halfway over the table to hear him. He often sounds as if he walked off the set of a Guy Ritchie movie. He asks as many questions as I do. About Coulson, he says, “Either Andy was a dreadful editor or a liar. You cannot run a newspaper and not know where things come from.” Phone hacking at the *News of the World*, Hoare goes on, “was encouraged as long as you didn’t get caught. Andy was aware that the practice was going on.”
Paul McMullan told me that phone hacking “was so common that I reckon a quarter of the British population was doing it. Coulson had to know.” McMullan explained that phone hacking was in fact a step down from what he used to do when mobile phones became popular and ran on analog technology. “You could go and legally buy a scanner and sit outside Hugh Grant’s house and listen to his calls as they happened,” McMullan said. “I remember transcribing Prince Charles’s conversations with Camilla just by scanning mobile phones. And Diana talking to her lovers. This goes back a long time.” When the mobile carriers switched to digital technology, scanning became much more expensive, so reporters settled for hacking into people’s mobile phone messages.
Hugh Grant recently wrote an article, “The Bugger, Bugged,” for the April 11 issue of the *New Statesman*, guest-edited by his former girlfriend Jemima Khan, in which he interviewed McMullan. Grant wrote that just before Christmas, when his car had broken down on a country road, a white van pulled over, not to help him, but to snap pictures. The man at the wheel of the van was McMullan, who now runs a pub in the seaside town of Dover. McMullan still keeps a camera in the glove compartment, so that he can practice his old craft on a freelance basis when the opportunity arises, as it did with Grant. In the end McMullan offered Grant a ride, and on the way McMullan told the actor that he had been a victim of phone hacking.
When Khan asked Grant to write an article on the subject for the magazine, he returned to McMullan’s bar and secretly taped the conversation. With regard to phone hacking, McMullan told Grant that Andy Coulson “knew all about it and regularly ordered it.” Because he didn’t know he was being taped, he was generous with his accusations. He said Rebekah Brooks, too, knew that the practice was common, and that because she rode horses regularly with David Cameron, he also must have known. McMullan added that “20 percent of the Met [Metropolitan Police] has taken backhanders from tabloid hacks. So why would they want to open up that can of worms?”
During the investigation into Mulcaire and Goodman, in 2006, Scotland Yard seized a trove of computer records, audiotapes, handwritten notes, and paperwork of various kinds. The records yielded 4332 names or partial names of people in whom the two men had an interest, along with 2978 mobile phone numbers, 40 tapes that appeared to contain recordings of voicemail messages, and 91 PIN codes to access voicemail boxes. The number of victims was potentially enormous, in other words, and the raw material for a thorough investigation was essentially sitting on the table.
But Scotland Yard notified only five people (beyond the princes and the royal household) that their voicemails may have been intercepted, then let the matter rest. Those five appeared in Mulcaire’s indictment: Liberal Democrat member of Parliament Simon Hughes; Elle Macpherson; soccer agent Sky Andrew; Gordon Taylor, chief executive of the Professional Footballers’ Association; and Gordon Ramsay, the hot-tempered celebrity chef and host of the reality competition show *Hell’s Kitchen*. In May 2007 the Press Complaints Commission, a self-regulatory body overseeing the newspaper industry, published a report on phone hacking in which it said that it had found no evidence of wrongdoing other than the episodes that had already come out.
One person notified by Scotland Yard—Gordon Taylor—sued the *News of the World*. In an effort to prevent additional names from coming to light, the paper settled with Taylor in 2008 for more than $1 million.
Rupert Murdoch seemed to have had no knowledge of the Taylor deal a year later, in the summer of 2009, when *The Guardian* reported on the settlement. “If that had happened, I would know about it,” Murdoch said when asked about the payment in an interview from the annual Allen & Co. conference, in Sun Valley, Idaho, with Bloomberg news service, the night *The Guardian* story went up on the Web. The Taylor payment had been personally approved by Murdoch’s son Lachlan, to whom Rupert had handed control of his company’s operations in Europe, Asia and Australia.
After revelations about the Taylor settlement, *News of the World* executives and the author of the *Guardian* story, Nick Davies, were called before a parliamentary inquiry. Les Hinton testified that “we went to extraordinary lengths” to investigate phone hacking. “There was never any evidence delivered to me that suggested that the conduct of Clive Goodman spread beyond him.” But in the course of his appearance, Davies produced evidence that implicated two other *News of the World* reporters, Neville Thurlbeck and Greg Miskiw, in phone hacking. That evidence included emails from a junior reporter at the *News of the World* delivering transcripts of what appeared to be Taylor’s hacked voicemail messages to Thurlbeck. And Davies provided another document, a contract signed by Miskiw offering Mulcaire a bonus if he could nail down a story the *News of the World* was pursuing about Taylor’s personal life. Miskiw is widely remembered for a remark caught on tape, 10 years ago, in which he sought to explain the purpose of tabloid journalism to a young reporter: “That is what we do—we go out and destroy other people’s lives.”
The British press gave virtually no attention to Davies’s testimony. The theory at *The Guardian* is that the use of phone hacking had become so common that many newspapers were loath to point fingers. Indeed, in 2003 the Information Commissioner’s Office—the agency charged with enforcing data privacy and government transparency—had looked into the activities of another private investigator, Steve Whittamore, who worked for many British newspapers. Over a three-year period, the ICO revealed, more than 300 journalists had hired Whittamore. The newspapers spanned Fleet Street and were not limited to the tabloids. *The Daily Mail* was the most frequent client. The *News of the World* ranked fifth. News Corp.’s *Times of London* and *Sunday Times* were also among Whittamore’s clients, as was the Guardian Media Group’s *Observer*. The report covered not just phone hacking but other “dark arts,” such as blagging (tricking organizations such as phone companies and banks into disclosing personal information), illegal searches of police and other government records, and using cell phone numbers to get private addresses.
Operation Weeting
For a long time, *The Guardian* was the only newspaper that would cover the phone hacking story seriously. Frustrated by the lack of attention in Britain, Guardian editor Alan Rusbridger emailed *New York* *Times* executive editor Bill Keller and encouraged him to look into the phone hacking story. In September 2010, more than a year after the *Guardian* revelations, *The New York Times* ran a lengthy story on the scandal which quoted Sean Hoare saying that Coulson actually encouraged phone hacking. Unnamed Scotland Yard detectives alleged that they had deliberately curtailed their investigation because of a close relationship with the *News of the World*. *The Guardian* followed up with another story and quoted Paul McMullan, who stated that Coulson surely knew what was going on.
By the fall of 2010, references to Coulson were more newsworthy than they would have been several months earlier, because Coulson was now the chief communications officer for the new prime minister, David Cameron. Under pressure, Scotland Yard reopened its investigation to look at “new” evidence—in other words, evidence other than the ample evidence it already had in its files—and it questioned Hoare and McMullan “under caution,” which meant that anything they said could be used to prosecute them. It was unusual to interview potential witnesses in a case as suspects, a tactic that was likely—perhaps intended—to intimidate others who might otherwise speak out. John Prescott, meanwhile, had been confirmed in his suspicions, and he formally applied for a full judicial review of Scotland Yard’s handling of the case.
In December, Scotland Yard announced that it had found no new evidence of crime in its latest inquiry, but civil lawsuits were beginning to unearth what the police had not. Lawyers for Sienna Miller claimed that one of the *News of the World’s* most senior journalists, news editor Ian Edmondson, had instructed investigator Glenn Mulcaire to listen to Miller’s voicemails, as well as those of her ex-boyfriend Jude Law and Law’s personal assistant. Other lawsuits uncovered more names of *News of the World* reporters in Mulcaire’s notes, exploding News Corp.’s “rogue reporter” defense.
Just before Christmas, News Corp. suspended Ian Edmondson. On January 13, the Crown Prosecution Service said it would mount a “comprehensive review” of phone hacking material held by Scotland Yard. On January 21, Andy Coulson resigned as David Cameron’s director of communications, saying that “continued coverage of events connected to my old job at the *News of the World* has made it difficult for me to give the 110 percent needed in this role.” He went on to observe, “When the spokesman needs a spokesman it’s time to move on.” Coulson stood by his position that he was not aware of any phone hacking that had occurred on his watch. Five days later, after News Corp. handed over a trove of emails, Scotland Yard announced a new investigation into phone hacking—Operation Weeting, it is called—run by Deputy Assistant Commissioner Sue Akers of the Serious and Organized Crime Command, the division that usually deals with organized crime. There are now about 45 officers working on the case.
The Plaintiffs
It’s hard to find anyone among a certain stratum in London these days who doesn’t believe his or her phone was hacked by the *News of the World*. Alastair Campbell, Tony Blair’s communications czar, told me he felt sure his phone had been hacked—he remembers arranging private meetings via cell phone, only to be surprised by a *News of the World* photographer when he arrived. So far, two dozen people have been willing to step forward and take on the newspaper in the courts. The names of all the litigants are not known, because many of the actions have been brought privately. Here are some of the plaintiffs:
-Steve Coogan: British comedian and actor. In August 2005, the *News of the World* wrote that Courtney Love claimed she was pregnant with Coogan’s child. The story came out shortly after Coogan and his wife had divorced. Both Coogan and Love dismissed the story. Coogan is suing the paper and Glenn Mulcaire on the grounds that they intercepted his voicemail messages and misused his private information.
-Brian Paddick: A former deputy assistant commissioner at Scotland Yard (and the highest-ranking openly gay police officer), Paddick came to the conclusion that his phone had been hacked after the *News of the World* reported that he had bought his partner a watch while on vacation in Sydney, Australia. Paddick had told no one else of the purchase, but had called his bank from his cell phone to lift the limit on his credit card.
-Nicola Phillips: A former assistant to disgraced former PR agent Max Clifford (who was later brought as part of Britain’s “pedo ring” cabal in the late ‘90s), she claims that the newspaper accessed her voicemail in order to match a story that was being published in the *Sunday Mirror* and the *Mail on Sunday*, alleging that Ralph Fiennes had cheated on his girlfriend with a Romanian singer, Cornelia Crisan. Phillips was a friend of Ian Edmondson’s. When I talked to her in April, she told me that Edmondson called her when she first filed her court papers, in March of last year, to discourage her from moving forward. “I’m risking everything by taking this case, in terms of who I’m taking on, and that of course is a worry,” she said. “I’m small. I’m of no interest to anybody. I’m not a celebrity. I’m not famous. I’m still having to live day to day and having to go out and work to pay my bills. I’ve been up and down over this.” She added that she has been tempted to drop her case, “but then I can’t run away because I’ll bankrupt myself and be on for everybody’s legal costs.” If a plaintiff drops a legal case, British courts require the plaintiff to pay the defendant’s legal fees.
-Leslie Ash: A British TV star, she is married to Lee Chapman, a former soccer star. When Ash went to the hospital for a cracked rib and contracted a potentially fatal hospital infection, she and her husband were hounded by paparazzi. She has seen evidence from the police that shows the names and phone numbers of her sons, who were 11 and 13 at the time of her hospitalization, in Mulcaire’s files. She believes that the News of the World was listening to messages her sons left her when she was in the hospital.
-George Galloway: A former member of Parliament, he was informed of evidence last fall that Glenn Mulcaire had hacked his phone. He told the BBC that the *News of the World* had offered him “substantial sums of money” to settle his suit.
-Paul Gascoigne: A former soccer star, Gascoigne alleges that the *News of the World* invaded his privacy, thereby hindering his drug and alcohol recovery.
-Chris Tarrant: The host of Britain’s *Who Wants to Be a Millionaire?,* Tarrant decided to sue after he found out that Mulcaire had his cell phone number and three others linked to him, including that of his estranged wife.
-Kelly Hoppen: She is Sienna Miller’s stepmother and an interior designer. Earlier this year, her lawyers obtained evidence from her phone company, Vodafone, that on June 22, 2009, the day after the *Mail on Sunday* wrote that Hoppen was having a relationship with Guy Ritchie, her cell phone had been called by someone who hung up when Hoppen answered, and then called back to dial into her voice mail for about 25 seconds. Vodafone disclosed that the calls had been made from a cell phone registered to the News of the World in the name of feature writer Dan Evans. In High Court in February, lawyers for the *News of the World* said Evans had dialed the number in error.
-Sienna Miller: Miller was one of the first to file a suit, and her case has driven many of the most important revelations. The 29-year-old’s relationship with actor Jude Law was intense tabloid fodder. They had met on the set of *Alfie*, in 2003, and become engaged. Then, in 2005, Law admitted he was having an affair with his children’s nanny. The two split up. When they reunited, the tabloids speculated furiously that they had become engaged again, reporting that Law had bought Miller a grand piano for Christmas, with a diamond ring worth more than $200,000 hidden under the lid.
Miller sued News International last fall and has been tight-lipped ever since. (Jude Law, for his part, recently won an order for disclosure against the Metropolitan Police.) Miller did give an interview recently to *The Guardian* to promote her role in the play *Flare Path*, in London’s West End. “I don’t think I’m going to be in too many Murdoch papers from now on,” she said in the interview. “I’ve bought my freedom, in a way.”
“Out of the Woodwork”
John Prescott is recalling his meeting with Sue Akers, of the Serious and Organized Crime Command, in mid-February. For two years he had been running into a wall with Scotland Yard.
One school of thought about the behavior of the police throughout the phone-hacking affair is that they engaged in a more or less benign cover-up—something akin to triage. The messages of Prince William, Prince Harry and Princess Diana were intercepted at a time when Scotland Yard was busy with counterterrorism in the wake of the London bombings in July 2005. The police, according to this interpretation, limited the initial investigation and then moved on.
A second school of thought, widely subscribed to in London’s newsrooms and among lawyers involved in the case, sees a far more nefarious dynamic at play. It is that the police sat on evidence because they were eager to stay in the good graces of Murdoch’s tabloids, and also because key police officials had their own dirty laundry to hide. Both Andy Hayman, who took charge of the initial inquiry, and John Yates, who was responsible for the later inquiry, in 2009, have been targeted by the tabloids for alleged indiscretions. More broadly, tabloid newspapers and police departments routinely rely on one another: the tabloids want good stories, and the police want good coverage. Rebekah Brooks, testifying before a parliamentary inquiry in 2003, admitted that the News of the World had paid the police for information, which is illegal. (She has since backtracked from this admission.) After leaving the police force, Andy Hayman went to work for Murdoch’s *Times* as a columnist.
When Sue Akers sat down with Prescott, she had some news for him. “We met in this room, over there, with a cup of tea like this,” Prescott says, gesturing to a table across the room. “And then she told me that they have discovered that my chief of staff, Joan Hammell, had her phone tapped into 45 times with messages from me.” He pauses. “Now, what is significant in all these things is that the date they did the tapping was the date that I was exposed as having an affair, and what they wanted was more information about the affair.”
Prescott relates the story matter-of-factly. The date was April 26, 2006. On that day the *Daily Mirror* published its story about John Prescott’s affair with his appointments secretary, Tracey Temple. “Then it was all the press who wanted me. ‘Oh, Prescott, let’s get him,’” he growled. “So they want a story, any story, any information to get ahead because the story had broken somewhere else. Anyway, I was surprised how it broke and I rang Joan.” He pauses. “I admitted it right away, by the way. I never go into such a ducking and diving. There’s no point once the press are on it. You might as well put your hands up”—he puts his hands up—“and say, ‘That’s it.’ So I rung Joan. When I tried to get her, she often said to me, ‘You never left me a message.’ But I left her messages to ring, and she never got them.” It is Prescott’s suspicion that those messages had been intercepted by Glenn Mulcaire or someone else working for the *News of the World*, and deleted.
When I ask Prescott why he thinks it took so long for the police to get in touch with him and provide specific information about his case, he doesn’t hesitate. “Murdoch left it to this woman called Rebekah Wade, who I can’t bloody stomach.”
Rebekah Wade—now Rebekah Brooks—at the time was the editor of Murdoch’s *Sun* newspaper and is today chief executive of News International. She once famously spent a night in jail after her first husband, British soap opera star Ross Kemp, of *EastEnders*, called the police, saying she had struck him during a domestic dispute. Brooks has become a central figure in the phone hacking scandal because of her steadfast loyalty to the Murdochs and her perceived influence in British society and politics. At her wedding in 2009, to her second husband, Charlie Brooks, a racehorse trainer, David Cameron and Gordon Brown were both guests.
As Prescott tells it, Rebekah Brooks was used to manipulating the press, the police, and politicians, and so must have thought News Corp. could control the phone hacking story. Certain aspects of it would have made her especially nervous. The investigator Mulcaire had a habit of writing the name of any reporter he was working with in the top left corner of his notes. Mulcaire’s notes mention four first names that appear to be those of reporters and editors at the *News of the World*: Clive Goodman, Ian Edmondson, Greg Miskiw, and Neville Thurlbeck. There was great incentive at News Corp. to keep the story bottled up. Perhaps the police could help with containment? That possibility aside, the first line of defense had been the “rogue reporter” story. A second defensive maneuver consisted of the settlement payouts. Eventually an editor, Edmondson, had to be fingered.
Prescott said, “They thought [the early settlements] would put it to bed, because News Corp. were so powerful. ‘We’ll forget this story—it’s yesterday’s news.’ That’s what they thought they could do. They had the police on their side. So this whole structure was working to this one bloody stupid story, which was the rogue reporter. They knew if it opened up it would go right down the line, so they tried to hold it. Then Murdoch discovered that whatever she had done wasn’t holding the line at all—if anything, it was, most of it, coming out from the civil inquiries, and then more people started coming out of the woodwork.” Eventually, Murdoch went to London to assess the situation for himself. “The story that she kept telling, I presume, was ‘Don’t worry—we’ve got it in hand.’”
Prescott needs no encouragement to think ill of Rebekah Brooks. He is convinced that she ingratiated herself with British politicians, then used her position to pit them against one another. “When I was trying to keep the balance between Brown and Blair, who didn’t always get on, Blair would complain that Brown had said something, and I would say, ‘Where did you find that out?’ ‘Well, Rebekah Wade told me.’ Then the other one would have dinner with Rebekah Wade and tell Brown about Blair.” He looks scornfully into the distance. “I said, ‘This bloody woman is playing the two of you off each other—will you bloody dump her, for Christ’s sake!’” (Rebekah Brooks declined to be interviewed for this story.)
A “Berlusconi Moment”
From the perspective of News Corp., the expanding attention to the phone hacking scandal has transformed it from a local nuisance in London to something that represents a major headache for the entire company. By the fall of 2010, for the first time, top executives in New York were paying attention. As Murdoch saw it, media coverage of phone hacking was just an example of his competitors using their news pages to attack his commercial interests—intolerable when done by others. Specifically, he believed, they were trying to scuttle his company’s deal for the satellite broadcaster BSkyB by making News Corp. seem to be a criminal enterprise.
BSkyB is a public satellite broadcasting company with more than 10 million subscribers. It offers broadband Internet and telephone service and distributes television programs and movies through its on-demand offerings. Lachlan Murdoch and his brother James can both be credited with its impressive growth. But some commentators have referred to Rupert Murdoch’s takeover of BSkyB as Britain’s “Berlusconi moment,” referring to Italian Prime Minister Silvio Berlusconi, who in addition to serving as the country’s Prime Minister also controls three national television channels, a publishing house, an advertising-and-publicity agency, and two newspapers.
In June 2010, less than a month after David Cameron became prime minister, News Corp. announced its offer to purchase the portion of BSkyB that it did not already own—some 61 percent. Negotiations duly got under way. In October, an alliance of media companies opposed to News Corp.’s acquisition of BSkyB wrote to Vince Cable, the business secretary, saying the deal could have serious consequences for “media plurality” (that is, competitiveness) in Britain. The following month, Cable asked British and European regulators to investigate the merger.
Throughout January, there was a flurry of correspondence among News Corp., BSkyB, and Jeremy Hunt, the British member of Parliament in charge of reviewing the merger. Most of it had to do with Hunt’s requirement that News Corp. insulate Sky News from the rest of the company and limit News Corp.’s sizable market share in Britain. As he had before with *The Times of London, The Sunday Times*, and *The Wall Street Journal*, Murdoch proposed an “editorial independence” committee for Sky News—a patently unworkable scheme that has previously come to naught. On January 25, Hunt gave his view that the merger “may operate against the public interest in media plurality,” and said that he intended to refer the matter to the Competition Commission. But he gave News Corp. one more chance to amend its proposal. Rupert Murdoch flew to London to deal with the matter directly.
The British press gave considerable coverage to Murdoch’s arrival. It would be a busy week for him. On January 26, Ian Edmondson, the suspended *News of the World* editor, was formally dismissed from his job. The same day, Scotland Yard announced its new inquiry.
Over the past several months I’ve asked News Corp. executives what they think of the phone hacking story and where it will end. They have done their best to shake their heads and look amused, if a bit beleaguered. I sat down with several of them in February in the company’s new London headquarters, not far from the famous Wapping compound that Murdoch secretly built in the 1980s so he could print his papers outside London and break the print unions. The headquarters, unlike the Wapping fortress, is light and airy. Across the courtyard, I could see James Murdoch’s office through the large windows around it. He was not in there. I noted that James had moved from the old office his life-size Darth Vader statue, a totem he has carried with him since his days running News Corp.’s Star TV in Asia, which competitors referred to as “the Death Star.”
The News Corp. executives told me that, from their perspective, there were three main elements of the phone hacking story that needed to be dealt with. They believed they had two of them pretty well in hand.
The first was political. The resignation of Andy Coulson, they said, had slaked the Labour Party’s fervor for the cause. Indeed, they pointed out that, just two weeks after Coulson resigned, Labour MPs received a widely publicized -mail from a top Labour adviser (and former *Times of London* journalist) to stop stoking the phone hacking debate: “We must guard against anything which appears to be attacking a particular newspaper group out of spite.”
The second element was the business fallout. When I met with them, the News Corp. executives seemed optimistic that the BSkyB deal would go through—and once it did, rivals would stop using phone hacking as a battering ram. In early March, the British government announced that it had indeed cleared the deal after News Corp. agreed to spin off Sky News.
The third element is the private civil lawsuits. These are proving more difficult to contain. The executives I spoke with felt that, once people realized there wasn’t much money to be made in chasing the News of the World for breaches of privacy, lawyers would have a difficult time signing up new clients. That may be wishful thinking. The police have identified 91 alleged victims of phone hacking in their latest investigation—a list that is likely to grow. Tom Watson, one of the British members of Parliament most critical of News Corp.’s handling of the episode, recently noted that solicitors are buying Google ads that pop up whenever you search for the phrase “phone hacking.” One lawyer suing the *News of the World* recently estimated that damages from the suits could result in settlements totaling between $150 million and $250 million. News Corp. is hoping it can settle the cases for less than $30 million.
Beyond Britain
Those who have decided to challenge the *News of the World* in court have an unexpected ally in the person of Max Mosley. The mild-mannered Mosley did not have his phone hacked, but he has been on the receiving end of the *News of the World’s* attentions. Mosley had been largely an unknown figure, outside of Formula One circles, where he served as the president of the governing body, until the *News of the World*, in 2008, plastered photos of him engaging in what the paper called a “SICK NAZI ORGY WITH 5 HOOKERS.” Mosley sued the *News of the World* for invasion of privacy. He admitted to engaging in consensual sadomasochism with the women, but denied that the episode had any Nazi overtones. He was particularly sensitive to any reference to Nazism, given that his father, Sir Oswald Mosley, had founded the British Fascist party and married his mother, Diana Mitford, at the home of Hitler’s propaganda chief, Joseph Goebbels.
Mosley won his suit, and the judge ordered the paper to pay him $120,000, the largest ever award in a privacy case. *News of the World* also had to pay Mosley’s legal fees, which neared $900,000. Mosley has pursued the case all the way to the European Court of Human Rights, in Strasbourg. He is seeking to require by law that British newspapers notify their subjects before printing a story about their private lives.
More pointedly, Mosley has agreed to use his own resources to fund phone hacking lawsuits against News Corp.: “In a number of cases, I’ve said to people, ‘If you lose, I’ll stand behind you.’” Because of the way the British legal system operates, such backing is significant. As noted, unlike in the U.S., in Britain, if a party brings a suit and loses, that party is typically required to pay legal fees for the defendant. “In Britain, to bring a lawsuit, you either have to have no money at all or be eccentric,” Mosley says. He places himself in the latter category.
There will continue to be fallout, beyond the recent arrests and the admission of guilt by News Corp. It is likely that other current and former *News of the World* journalists will find themselves in legal jeopardy. If one of them switches sides and starts to talk, the repercussions could be significant. In the meantime, News Corp. has been covering Glenn Mulcaire’s legal fees.
The position of Rebekah Brooks inside News Corp. at the moment appears secure. In January, she took her top executive team to Babington House, a private club in Somerset, in part to discuss how to minimize the damage from the phone hacking inquiry. It was there that they started hammering out the settlement strategy. In late March, she delivered her three-year plan for the UK newspapers to Murdoch himself, which executives at the company took as a sign that his support for her remains undiminished.
In March, James Murdoch was named deputy chief operating officer of the company, a position that brings him to News Corp.’s headquarters in New York. Lachlan, who unlike his brother’s more left of center beliefs is an unreconstructed neocon, remains in charge of the News International division. Lachlan lost bids for his father’s American division to double down on the right-wing bloviating, and resents the fact that James has moved to push it to tamp down its rhetoric. Lachlan has delegated most of his duties, if not the title, clearly moving to try and shore up his image. He may not shake the impression that he has mishandled this affair, or that his father had to fly in personally to sort it out. (“He’s an idiot,” Prescott told me. “The kids are never up to their fathers, are they?”) But James and Lachlan are in fact good businessmen, and such perceived weaknesses are hardly going to keep Rupert Murdoch from handing his company over to his children.
The phone hacking scandal is in some ways a quintessentially British affair, the product of a small and inbred society in which the elites in every sector are connected with one another through ties of business, family, politics, money, and sex. The connections are hard to disentangle, and a tug on any thread is felt by all the others. But the lessons go beyond Britain. They would apply, for instance, to the United States, where many of the potential Republican nominees for president have been on the payroll of Murdoch’s Fox News. They apply to any society in which relationships between press and public servants cross a line of intimacy, and deciding where one’s loyalty lies takes more than a moment’s thought.

**“Hack Work,” by Anthony Lane, *The New Yorker*, July 25, 2011**
*A tabloid culture runs amok*
On March 21, 2002, a 13-year-old English schoolgirl took the train home. Usually, she took it all the way to Hersham, 17 miles from London, where she lived, but on that day, she got off one stop before, at Walton-on-Thames, to get something to eat. From that decision flowed two events, one terrible and final, the other more ambiguous and by no means complete. The first was the death of the girl, whose name was Milly Dowler. Walking home from Walton, she was abducted and murdered by a man named Levi Bellfield. Her body was found six months later, in a field 25 miles away, by mushroom pickers. The second consequence has been the fraying of an empire, and the sight of its emperor under siege. Many people have dreamed of such a day; far fewer would have predicted the swiftness with which it arrived; others view it as an overreaction tinged with hypocrisy and hysteria; and only the unworldly would claim that the end is nigh. Empires strike back.
The emperor is, of course, Rupert Murdoch, the chairman and CEO of News Corporation; the owner of 20th Century Fox, Fox News, and *The Wall Street Journal;* the proprietor, in Britain, of the *Times*, the *Sunday Times*, and *The Sun*, and the holder of a 39.1 percent stake in BSkyB, the country’s leading satellite broadcasting company; an Australian by birth and an American by choice; the proud father of six children; the 38th-richest person in this country; and, in the words of his mother, the adamantine Dame Elisabeth Murdoch, now 102 years old, “that wretched boy of mine.” Never underestimate the wish, in the heart of a child, even a child aged 80, to please the matriarch and prove himself less wretched in her eyes. It takes only three minutes, near the start of *Citizen Kane*, to shift from the stony stare of Mrs. Kane, as she watches young Charles leave forever, to the bullish proposal of the grown lad: “I think it would be fun to run a newspaper.”
In the past weeks, the fun has leached away. Readers and viewers who know Murdoch purely as a name—or as one of those figures so wealthy, and granted such frictionless mobility by their wealth, that they never seem to be in the part of the world that you expect them to be—were startled to see a senior gent, with sparse white hair and a clownish smile, descend upon London. He was seen jogging in one of the parks, in the thrall of a personal trainer. She was blond and wholly fearsome, like someone whom Sylvester Stallone very nearly married before changing his mind and hiding under the bed. As for her trainee, he was photographed with milk-white shanks exposed unkindly to the elements. This was Rupert Murdoch? The man to whom Prime Ministers bend the knee? More unfamiliar still was the contrite figure who emerged from a meeting in a London hotel and pronounced himself “appalled to find out what had happened.” He was also “humbled to give a full and sincere apology to the Dowler family,” according to the Dowlers’ solicitor. Of all the words one never thought to find in the vicinity of Murdoch, “humbled,” especially in the passive voice, would top the list. But what was he apologizing for?
Chronology matters here, if one is to chart the rising tide. Bellfield, who is serving life imprisonment for two other killings, committed in 2003 and 2004, was tried for Milly’s murder and convicted, on June 23rd of this year. The following day, the Dowlers complained of their legal ordeal; Milly’s father, Robert, who had been an early suspect, had endured fierce cross-questioning. So had Milly’s mother, Sally, who was made to listen to Milly’s private notes, and who collapsed after giving evidence. “My family have had to pay too high a price for justice for Milly,” Robert Dowler said. On June 25th, the chief constable in charge of the investigation, Mark Rowley, said that the Dowlers’ privacy had been “destroyed.” He contrasted their position with that of celebrities who seek to guard their follies through legal injunctions—Ryan Giggs, for instance, a Manchester United soccer player, whose sexual exploits had been concealed, protected by such an injunction, until unloosed on the Internet.
What links all these disparate details is a confused and volatile concern about how, and even whether, our lives still belong to us. Who can possibly remain a closed book, when others try to open it and leaf through? Have the millions who volunteer their thoughts, on Facebook and in other social media, made it more treacherous for others—and for themselves—when a secret begs to be kept? The hungering quest to know, in short, and the debatable right to pry were already being stirred in the public mind. A sportsman with too many girlfriends could be jeered like a baited bear, but bereaved parents, who had sought no fame, were another matter. Something had to give, and it came on July 4th, with the allegation that the *News of the World*, the Sunday paper owned by Murdoch, had hacked into Milly Dowler’s cell phone. In the days after she vanished, it was said, journalists had deleted messages on her phone, in order to clear space for more. This may have compromised the police inquiry, and had also, more damnably, given her family false hope that she might be alive.
The story was broken by *The Guardian*, the upmarket daily paper that has been pursuing the matter of illegal conduct by the tabloids since 2002. The royal editor of the *News of the World* and a private investigator employed by the paper had already been jailed for hacking into phones used by members of the Royal Family, yet it would be fair to say that such occurrences had been met, by the wider public, with a shrug. So what was different now? The received wisdom—that the extreme sufferings of ordinary folk do not merit exploitation—is correct. There was, furthermore, a sense that the hacking of Milly Dowler’s messages represented a desecration of the dead. The obloquy deepened in the ensuing days, during which it was reported that the cell phones of families of British soldiers killed in Iraq and Afghanistan may also have been hacked. These are, as yet, allegations: nothing has been proved, although little has been denied. What hackers could conceivably have gleaned from such activity, apart from listening to messages of condolence, is hard to imagine; maybe hacking, profitable or not, had stiffened into a reflex.
From here, the outcry gathered force, and rolled over those who stood in its path. On July 8th, Andy Coulson, a former editor of the *News of the World*, who later became the communications director in the office of David Cameron, the Prime Minister, was arrested in connection with the allegations. On July 14th, the same fate befell Neil Wallis, who had been the deputy editor first of *The Sun* and later of the *News of the World*, where he rose to become executive editor. The next day, Les Hinton, the CEO of Dow Jones, a subsidiary of News Corporation, and a colleague of Murdoch’s for half a century, resigned his post, as did Rebekah Brooks, the chief executive of News International, which publishes all the Murdoch newspapers in Britain. She had edited *The Sun* from 2003 to 2009, and before that the *News of the World*, from 2000 to 2003—the period that included the alleged hacking of Milly Dowler’s phone. Brooks is evidently close to Murdoch, who, on July 10th, having arrived in London to limit the damage, was asked what his greatest priority was. “This one,” he replied, indicating Brooks. A week later, she was arrested.
Later that day, Sir Paul Stephenson, the commissioner of the Metropolitan Police, and thus the senior law enforcement official in the land, also quit his job. He had been hobbled by the revelation—and here we are treading close to farce—that Neil Wallis, after leaving the *News of the World*, in 2009, had been hired by the Metropolitan Police (the Met, as it is known), as a public relations consultant. Stephenson, in his resignation speech, pointed out that Wallis, unlike Andy Coulson, had not been forced to resign from the paper. The Prime Minister had nonetheless gone ahead and hired Coulson. Cameron was, and remains, under fire not just for his naïveté in that appointment but for the ease with which he had mingled with members of News International; lips were pursed at his personal amity with Brooks, who was a neighbor of Cameron’s, in Oxfordshire. (Her husband, a racehorse trainer, was educated at Eton, as was the Prime Minister: nothing suspicious about that, but it does oil the wheels.) How high would this scandal rise? Could it not merely corrode but pull down a government?
Of all the charges being levelled, the social one—that the Prime Minister was fraternizing with the wrong sort—is at once the most splenetic and the weakest, especially to anyone familiar with the dance that politicians and newspapers have led one another in the past hundred years. No waltz could have been merrier than the weekend gathering in November 1923, at Cherkley Court, a resplendent country house, in Surrey. The guests included David Lloyd George, Winston Churchill, Austen Chamberlain (a former Chancellor of the Exchequer), and Lord Birkenhead, until recently Lord Chancellor. Their plan was to discomfit the Prime Minister, Stanley Baldwin, and form a new coalition—a scheme abetted by their host, Lord Beaverbrook, the owner of the Daily Express, then a newspaper of great potency and reach. “I think Baldwin will be defeated,” Beaverbrook wired to another press baron, Lord Rothermere, who owned not just the *Daily Mail* but also the *Daily Mirror*. Later, in the Second World War, Beaverbrook became, at Churchill’s invitation, Minister of Aircraft Production. His colleague Ernest Bevin, the wartime Minister of Labour, said that, when it came to Beaverbrook, Churchill “was like a man who’s married a whore; he knows she’s a whore but he loves her just the same.” Churchill himself, incidentally, once wrote for the News of the World.
The joke is that the anti-Baldwin plotting petered out; when it comes to moguls and ministers, not all convenings are conspiracies, and few conspiracies succeed. It is natural, in the present frenzy, that Carl Bernstein, writing in *Newsweek*, should claim that comparisons with the Watergate affair are “inevitable.” But is that so? On the Presidential watch, men were hired to commit criminal acts; Cameron, by comparison, took on a man, Coulson, who had been tarnished by association with criminality, and gave him a respectable (if serpentine) job, which by all accounts Coulson performed with aplomb. The Prime Minister erred, but was he guilty of anything darker than lousy judgment? Ian Katz, the deputy editor of *The Guardian*, may well be right when he says, “The conspiracy reading is that Cameron wasn’t prepared to risk the ire of News International by dumping Coulson overboard, because once he dumped Coulson, the whole thing would chase back up the ladder towards Murdoch. I don’t really buy that. I think it was more a combination of arrogance and a reluctance to confront a really difficult situation.”
If the Nixonian shadow falls anywhere in this case, it is not on Cameron but on Murdoch, for it was doubtless under his aegis that cell phones were allegedly hacked, and the law transgressed. As he admitted, “I don’t know any better than anyone else where the electronic age is taking us, or how it will affect a large newspaper company.” Those words were quoted in Fortune, in February, 1984. Whether he is wiser now, more than a quarter of a century later, God only knows. And, as yet, no one has hacked His phone.
For a small nation, Britain has an awful lot of national newspapers. Six days of the week, you can choose among five tabloids, some of them known, for reasons of design rather than of ideology, as “red-tops” (*The Sun*, the *Daily Mirror*, the *Daily Express*, the *Daily Star*, and the *Daily Mail*), and five broadsheets—the *Times*, *The Guardian*, *The Independent*, the *Financial Times*, and the *Daily Telegraph*. Only the last two are still technically broadsheets, in terms of their page size, but the term has adhered to anything that lays claim to higher ground. (There is also a new kid, simply called *i*, which *The Independent* launched last year, and which fillets much of its content from its elder brother.) On Sunday, there is the *Sunday Times*, the *Sunday Telegraph*, the *Independent on Sunday*, and *The Observer*, and, at the more perspiring end of the market, the *Sunday Mirror*, the *Mail on Sunday,* the *Daily Star Sunday*, the *People*, and the *Sunday Express*. There was the *News of the World*, the heaviest breather of all, but its final edition came out on July 10th. Murdoch, in a bid to avert the hacking crisis, shut the paper, like a veterinarian who takes one look at your boisterous, nippy, but otherwise healthy mastiff and puts it down.
This barrage of print has one overriding effect: in Britain, you cannot hear yourself think. You never really notice this until you leave the country, whereupon the white noise suddenly stops. The noisiest paper, without doubt, was the *News of the World*, which resounded with three continuous notes. The first and most defensible was sport; last year, the paper laid bare a match fixing racket in Pakistani cricket—a bigger and more lucrative deal than it sounds. Then, there were television performers, who furnished an astounding proportion of the paper’s stories. (When historians come to measure the age of Murdoch, that symbiosis between media will loom large.) Last and most cacophonous, there was the assumption, or the ardent hope, that somebody, somewhere, was having sex with somebody he should not be having sex with. Viewed from outside, what this fixation suggested was a giggling braggart, fidgeting in the school playground, and pointing at girls with whom he would never stand a chance.
The resulting product was the best-selling newspaper in the country; make of that what you will. Murdoch certainly did. He bought the paper in 1969, acquiring *The Sun* later that year, and both *Times* titles in 1981. The *News of the World* had been alive since 1843, but, at the time of Murdoch’s approach, it had not been kicking for some while. In 1950, its circulation stood close to 8.5 million, an astonishing command of the reading public, but had since fallen to around 6 million. This was in line with a general subsidence; as Kevin Williams explains in his book *Read All About It*, “the decline of the mass Sunday newspaper is attributed to the incorporation of its values into the mainstream daily papers. The reader did not have to wait for the sleaze, scandals, and sex that up until the 1960s had only been available on Sundays.” Lurking somewhere behind this is a sulfurous inversion of religious practice: it’s not enough to confess your faith on the Lord’s day; you must go out and live it every day of the week.
One of the last people to inveigh, with any effect, against that heresy was Cardinal Heenan, the Archbishop of Westminster, who took Murdoch to task, in 1969, for having bought and splashed, or resplashed, the memoirs of Christine Keeler in the *News of the World*. She was the woman who had enjoyed simultaneous affairs with the Secretary of State for War, John Profumo, and a Soviet attaché—a grave security risk and, by any standards, a superheated news story. But that had all happened six years earlier; Profumo had resigned and devoted himself to work among the poor, in the East End, and the saga had grown cold. Murdoch was warming it up again, because his instinct, as keen as ever, told him that the will to forgive is weaker, in the communal conscience, than the urge to drool. He was reported as saying, “People can sneer all they like, but I’ll take the 150,000 extra copies we’re going to sell.”
Nonetheless, he apologized to the Cardinal, thus setting a pattern that persists to this day. Murdoch would preside over an exclusive, reap the reward, and, if necessary, express contrition, while his underlings readied themselves for the next scoop. On July 16th of this year, as the hacking scandal bloomed, News Corporation placed full-page advertisements in several newspapers—including, with some panache, the *Guardian*—headlined “we are sorry,” and adding, “Our business was founded on the idea that a free and open press should be a positive force in society. We need to live up to this.” That is a direct descendant of a statement that Murdoch issued in 1995: “This company will not tolerate its papers bringing into disrepute the best practices of popular journalism.” The fault, on that occasion, was a story, in the *News of the World*, about Victoria, the troubled wife of Earl Spencer, Princess Diana’s brother. Included were photographs, described by the paper’s editor, Piers Morgan, as “evocative,” of Victoria Spencer on the grounds of a private clinic. The matter was referred to the Press Complaints Commission, the invertebrate body that oversees the misdeeds of British newspapers. “That press complaining thingamajig,” Murdoch called it, according to Morgan, when they spoke a few days later.
Morgan owes much to Murdoch. He ran “Bizarre,” the showbiz column at *The Sun*, before taking the helm at the *News of the World*, in 1994, at the age of 28. From there, he left to edit the *Mirror*, the Sun’s enduring—and traditionally more left-wing—rival, from which he was sacked in 2004, having published photographs of British troops abusing Iraqi civilians. The front page showed a soldier urinating on one of his victims. It was more than possible that such images could stoke retaliation against British forces, and Morgan soon had a fresh problem: the pictures were fakes. (He has said that he is still uncertain of this.) For anyone who wishes to learn how the cycle of contumely and pardon—or simple forgetfulness—spins in England, note the consequence. Morgan went on to become a judge on *Britain’s Got Talent*, on ITV, and on *America’s Got Talent*, on NBC.
Morgan’s diary, published as *The Insider*, in 2005, is a tour guide to the freakery of life among the red-tops. What stands out is not the crowing thrills, or the major foul-ups, but the run-of-the-mill assumptions on which the tabloid press relies; they are the secret of the Murdoch mill. In the *News of the World,* on November 13, 1994, Morgan ran a photograph of Spike Milligan, once a harebrained figure in British comedy and now, apparently, whittled to what the caption called “a shadow of his former self.” The picture, it turned out, was not of Milligan at all, but, as Morgan reassured himself, “Spike will see the funny side, I’m sure. He’s a comedian.” Four days later, when a letter arrived from Milligan’s lawyer, expressing a grievance and requesting compensation, Morgan wrote, “I genuinely cannot believe how prickly Spike is being over all this.” Such is the quintessence of the tabloid: to bruise and bully, and then to back off, exclaiming, Come on, we’re only having a laugh. Can’t you take a joke? The British sense of humor is both an invaluable broadsword and an impenetrable shield.
The most thickly armored warrior, in this regard, was Kelvin MacKenzie, who edited *The Sun* from 1981 to 1994. When it comes to ethical discrimination, MacKenzie makes Morgan look like Ronald Dworkin. Students of the period should consult *Stick It Up Your Punter!,* by Peter Chippindale and Chris Horrie, much of which is consumed by MacKenzie’s reign. Here you will find, for instance, details of the interview with Marica McKay, the widow of a British sergeant who died in the Falklands and was honored with a posthumous Victoria Cross, the highest British award for gallantry—an interview compromised by the fact that she never actually spoke to the Sun. Or, there was the mission to out Peter Tatchell, the Labour candidate for the London constituency of Bermondsey, who was finally snared by the headline “Red Pete ‘Went to Gay Olympics.’” MacKenzie was informed that Tatchell had not, in fact, attended the Gay Olympics in San Francisco, but, undaunted, the editor simply inserted the claim between single quotation marks and ran it anyway. It suited MacKenzie’s bellowing homophobia, which, in turn, was consonant with his racial fears. “Botha has said the days of white power are over in South Africa. What he doesn’t say is what’s going to happen when the darkies come down from the trees,” he said. That was reported in the *New Statesman*, in 1985, by Peter Court, who had briefly worked as a graphic designer for the Sun.
When *Stick It Up Your Punter!* first came out, in 1990, it was hailed for its comic momentum, and the back cover of the paperback is strewn with snippets of admiring reviews from, among others, *The Economist*, the *London Review of Books*, and, yes, *The Guardian*—the well-bred visitors laughing at the tabloid zoo. Read now, it seems less amusing, and what previously felt like a string of highjinks comes across as a tireless parade of emotional cruelty. Court had a colleague in the art department who was instructed by MacKenzie to “do us all a favor, you useless cunt—cut your throat.” According to Matthew Engel, in *Tickle the Public: One Hundred Years of the Popular Press*, a news editor was discovered whacking his skull against a wall, in an effort to preempt what he thought a raging MacKenzie would do to him later.
All of which suggests that the seeds of the current crisis were planted long ago. If your attitude toward the lives of others is that of a house burglar confronted by an open window; if you consider it part of your business to fabricate conversations where none exist; and if your boss treats his employees with a derision that they, following suit, extend to the subjects of their inquiries—if those elements are already in place, then the decision to, say, hack into someone’s cell phone is almost no decision at all. It is merely the next step. All that is required is the technology. What ensues may be against the law, but it goes no more against the grain of common decency than any other tool of your trade. This has been confirmed by Paul McMullan, a former deputy features editor at the *News of the World*, who started by blowing the whistle on phone hacking and now appears, for the hell of it, to have switched from a whistle to a trumpet. Questioned on the BBC, on July 5th, he said that, having pondered the matter of Milly Dowler’s messages being hacked, he has come to view it as “not such a big deal.”
McMullan cuts exactly the figure that one would hope: the stained white suit, the tie askew, the despairing beard, the eruptive complexion, and the hair that no comb would dare engage. Yet, at present, he is perhaps the only player in this drama who speaks without a trace of caution—cheerfully confessing to what he hardly perceives as wrongs, and manfully struggling to grasp those moments when even he may have exceeded his brief. On BBC Radio, he spoke, with a fuddled melancholy, of Jennifer Elliott—no celebrity, but the daughter of the actor Denholm Elliott, who was in *Trading Places* and *Raiders of the Lost Ark.* He died in 1992. She had a drug problem, and McMullan wrote about her in the News of the World, in 1995, alleging that she was a beggar and a part-time prostitute. Just to coarsen things, he admitted that the tipoff came from a policeman who had taken payment from one of his colleagues. Jennifer Elliott later hanged herself. Asked by the BBC, “Do you think that decision had anything to do with what you wrote and what you did?,” McMullan replied:
*Yeah, I totally humiliated and destroyed her. It wasn’t necessary, she didn’t deserve it. She was having a bad time after her own dad had died. Yeah, I went a step too far. And it was based on a now criminal act, and so you gotta sometimes question, well, in some cases, criminal acts perpetrated by journalists aren’t always justified. And in this case, not only was it not justified, it was downright wrong, I sincerely regret it, and, again, if there was anyone to apologize to, I would. But they’re all dead. If you want to track down a forebear of McMullan, try George Flack:*
*That’s about played out, anyway, the idea of sticking up a sign of “private” and thinking you can keep the place to yourself. You can’t do it—you can’t keep out the light of the Press. Now what I’m going to do is to set up the biggest lamp yet made and to make it shine all over the place. We’ll see who’s private then!*
Flack was a fiction—a journalist dreamed up by Henry James, for his 1888 novel *The Reverberator*. To pass from the author of *The Golden Bowl* to the *News of the World* is to range from one end of the human pH scale to the other, yet James detected the note of pure threat, and wondered how we might cower beneath it. Fear and loathing of the press is as old as the press itself, and the press would argue that the mighty in their seats have much to be fearful about; but the British tabloid press, in particular, spends much less time on the mighty, from day to day, than on the lowly, the lecherous, and the foreign. *The Sun*, July 4, 2003: “Police swooped on a gang of East Europeans and caught them red-handed about to cook a pair of Royal swans.” The Press Complaints Commission found that the newspaper “was unable to provide any evidence for the story.”
Yet the story ran, deftly hardening the readers’ xenophobia, though its primary purpose, in the land of the gray sky, was surely to dispel their clouded gloom. As one scans the history of Murdoch’s rise, this mission to entertain assumes far more importance than his political agenda. Unlike Rothermere and Beaverbrook, he relishes not the orotundity of power (“It is the duty of newspapers to advocate a policy of optimism in the broadest sense,” Beaverbrook said, in 1922) but the more subtle power of suggestion. (When Murdoch was angling to buy the *Times*, he entered a committee room “like someone visiting a friend in hospital”—the recollection of Harry Evans, who was about to cross over as editor of the Sunday paper to editor of the daily paper.) Murdoch is not prone to intellectual nicety, and his support for any given government has been determined, more often than not, by its willingness to strike the fetters from the market; once the Conservatives chose not to refer his takeover of the *Times* and the *Sunday Times* to the Monopolies Commission, it was easy to guess where Murdoch’s fealty would lie. But if one had to isolate an instant, in the 30 years of his ownership, that best portrayed the Murdoch touch it would be the dictum that he issued, over the phone, on the evening of Saturday, April 23, 1983. *The Sunday Times*, poised to publish the “Hitler diaries,” had hit a wrinkle; the historian Lord Dacre, who had verified their authenticity, was having second thoughts. Stop the presses, or forge ahead? Over to Murdoch, in New York: “Fuck Dacre. Publish.”
That is a sheer tabloid instinct, in a broadsheet world. It paid off, too; the diaries were soon exposed as forgeries, but, as William Shawcross explains in his 1992 biography of Murdoch, “the circulation of the Sunday Times rose 60,000 while the controversy raged, and 20,000 of those readers stayed with the paper.” Shawcross admires Murdoch, with reservations—more so than detractors like Evans, who noted a “bleak hostility,” or Evans’s successor, Frank Giles, who found Murdoch “intemperate and disagreeable.” Then, there is Michael Wolff, who, throughout *The Man Who Owns the News*, his 2008 exploration of Murdoch, is openly fascinated by the elusiveness of his prey: “He uses his newspapers to change himself. It’s as though he can’t express himself without one.” This notion of an Australian chameleon is not easy to accept, especially for those who prefer to label Murdoch a cantering rhino, yet on one thing all the commentators, warm or frosty, are agreed: the guy likes newspapers, or at any rate the rough business of newspapers. Less has changed than Wolff proposes, perhaps, in the years since Murdoch bought the *News of the World* and declared:
*Since a paper’s success or failure depends on its editorial approach, why shouldn’t I interfere when I see a way to strengthen its approach? What am I supposed to do, sit idly by and watch a paper go down the drain, simply because I’m not supposed to interfere? Rubbish! That’s the reason the* News of the World *started to fade. There was no one there to trim the fat and wrench it out of its editorial complacency.*
That could be Margaret Thatcher, acquiring an equally faded Britain ten years later. Fat-trimmers, like all diet obsessives, understand one another; in the words of Charles Moore, Thatcher’s authorized biographer, “they were both trying to do something against the status quo; what’s happened since is that Murdoch has become the status quo.” He is hardly the first outsider, or upstart, to make that switch; like a *News of the World* reporter writ large, he loitered on the doorstep of the British establishment, then muscled his way in and decided to hang around. Whether he likes the look of the joint, after all these years, is far from certain. America suits him better. Britain, for its part, has never really liked the look of Murdoch, thus confirming the prejudices of the youngblood who turned up from Australia in the 1960s and found himself tussling with bishops. Spurned by the British as a colonial, from an uncouth continent, he exacted the perfect revenge: he colonized their imagination.
That is why witnesses at the House of Commons Select Committee for Culture, Media, and Sport, which summoned Rupert Murdoch and his sons James and Lachlan to appear on July 19th, were so taken aback. Almost the first move of the father, as the session began, was to cup his ear toward an interlocutor, and, with that tiny gesture, he broke the spell—the wicked charms that he had wreathed around the United Kingdom for decades. Here was no beast, no warper of souls or glutton for companies; here was an oldster, tortoise-slow on the uptake, with head drooping, shoulders slumped, rousing himself now and then to make a point by slapping the table before him. Though meant to sound decisive, the slap reminded some viewers of a grumpy grandpa asking when his Jell-O would be served. What ensued was equally bewildering, for Murdoch’s answers to the committee denoted at once a Kane-like power (“The *News of the World* is less than one percent of our company. I employ more than 53,000 people around the world”) and minimum control, as the chief executive officer declared himself scandalized by events, while also appearing ignorant of what many of those events were and when they had occurred. Even the fact that News Corporation had paid the sums of £725,000 ($1.2 million) to a victim of phone hacking, in an out-of-court settlement, seems barely to have flickered on his radar.
Seasoned Murdoch watchers, who have pursued the man since he appeared on the cover of *Time*, in 1977, clambering towers in the guise of King Kong, were not convinced. He may have voiced his belief, before questions began, that “this is the most humble day of my life,” and he may have deflected many of those questions onto the Prince Kong who sat, alert and in possession of the facts, at his side, but might this not have been the greatest impersonation of semi-senility since Harold Pinter performed “Krapp’s Last Tape,” in London, in 2006? Could it be that Murdoch, once the quizzing was done, had leaped into a limousine, cracked open a beer with his teeth, and started barking orders into half a dozen phones? He could even have paused, despite himself, to applaud the efforts of *The Guardian*, which, in its doggedness to unveil illicit dealings in the labyrinths of those who rule and police the nation, is doing precisely what the younger, keener Murdoch had in mind. To make trouble for an Etonian in Downing Street: nothing would have been sweeter.
Whatever the case, the last laugh has been his. Murdoch knows something that his assailants will seldom concede, and that renders their call for radical change, in the rapport between governance and the media, both tardy and redundant. The change has already happened; culture, media, and sport are not in Murdoch’s pocket, but the British, not least in their yen to watch soccer and cricket on Sky, have reached into their pockets and paid for his feast of wares. The country is in uproar just now, but outrage en masse functions like outrage in private: we reserve our deepest wrath not for the threat from without, which we fail to comprehend, but for forces with which we have been complicit. The British press has long reveled in the raucous and the irresponsible; that was part of its verve, and it was Murdoch’s genius, and also the cause of his current woes, to recognize those tendencies, bring the revelry to a head, and give the people what they asked for. He reminded them of themselves.
Look at an average copy of the *News of the World*, from March 27th, well before the latest outcry. There are only scraps of news here, and almost nothing of the world. No woman in the first six pages wears anything warmer than lingerie. An entrant from a televised ice dancing contest is granted a double-page spread to muse upon his newly transplanted hair. And the column on the op-ed page is by Fraser Nelson, the editor of the *Spectator*—a respectable weekly journal, loosely tied to the Tories, with a strong showing in arts and books coverage. Over the course of four decades, under Murdoch’s approving gaze, the lowbrow has paid no more attention to the highbrow than it ever did, while the highbrow has paid both heed and obeisance to the low—submission, in the weird wrangling of British class consciousness, being preferable to condescension. The most telling piece in the Guardian, in the wake of the hacking scandal, came from a former editor of the paper, Peter Preston, who analyzed the sales figures and showed that more ABC1 readers (that is, those with better education, employment, and pay, and thus close to advertisers’ hearts) read the *News of the World* than the *Sunday Times*—more, indeed, than the *Observer*, the *Sunday Telegraph*, and the *Independent on Sunday* put together. Murdoch must have closed the Screws with a pang.
The front page of the March 27th edition bore an archetypal story, in that it was barely a story at all. The headline read “Jordan drove me to suicide.” Now, this could not literally be true, unless the paper’s foreign desk was even more foreign than we knew. Rather, the lucky survivor was Alex Reid, a professional cage fighter, and formerly the paramour of Jordan—the defining, improbable deity of the past ten years, acclaimed for her volcanic breast implants, for her crowning appearance on a jungle-based reality show *I’m a Celebrity, Get Me Out of Here!,* and for the five bestselling novels that she engendered but did not actually write. In short, like other personae in the Murdochian drama, she scarcely exists outside the appetites of the tabloid press—and there, you might expect, she would remain, as safe a standby as Christine Keeler was. Should you wish, however, to delve into all that Jordan means, and the reasons for her reign in the jungle that is Great Britain, there were two lengthy, in-depth interviews published last year, one with her and the other with Alex Reid. Both were in the *Guardian*.

**"Dinner At Rupert's," by Greg Farrell, Jonathan Browning, Erik Larson and Eric Schine, *BusinessWeek*, February 9, 2012**
*What happened on the fateful night last May when Rupert Murdoch decided how News Corp. would manage its phone hacking scandal?*
Red wine in hand, Rupert Murdoch chatted with guests at his London townhouse on what would be one of the most important nights to the future of his company. Gathered for cocktails were Rupert's son James, heir apparent to the family media empire; James' brother Lachlan, who personally oversaw the European, Asian and Australian media divisions out of spite after his liberal-ish brother moved to revamp the American division; Rebekah Brooks, the chief executive of News Corp.'s UK unit; and Chase Carey, the New York-based president and chief operating officer. Joining the executives were a pair of legal heavyweights: Joel Klein, former New York City schools chancellor, and Brendan Sullivan, Jr., the well-connected Washington lawyer brought into the Murdoch fold at Klein's request.
It was May 19, 2011. The senior Murdoch had flown in two days earlier for a whirlwind of meetings with his top London executives. He had called the dinner party to hash out once and for all how to handle the phone hacking scandal that had been hanging over the company for months and was suddenly spinning out of control. A lawsuit filed by actress Sienna Miller—charging that a senior editor at the company's British Sunday tabloid, *News of the World*, was behind a campaign to hack into her phone—sparked a police investigation, producing a steady drip of disclosures about repeated incidents of phone hacking at Murdoch's British tabloids.
In the weeks leading up to the dinner, Murdoch had been presented with two opposing strategies for dealing with the mess. None of the people present at the dinner was willing to speak on the record. The events reconstructed in this story are based on interviews with four at the dinner who spoke on the condition that they not be identified. (A News Corp. spokeswoman declined to comment on the record for this article. Bloomberg LP competes with several units of News Corp.)
Klein, Brooks, and Lachlan Murdoch recommended that Brooks continue to manage the company's response from London. Doing so could reduce any chance of the scandal ensnaring Rupert Murdoch or Lachlan, who oversaw the division in question, and to especially reduce the chance of affecting James, who had recently been posted to the U.S. as deputy chief operating officer of the parent company, a move that positioned him as his father's probable successor. Over the previous five years, Brooks and her predecessors at the UK unit, News International, had successfully stymied similar police investigations. There was no reason, the executives argued, for a radical shift now.
Lon Jacobs, News Corp.'s general counsel, disagreed. For weeks he had urged Murdoch to get out in front of the widening scandal and launch an independent investigation into wrongdoing at *News of the World*. Jacobs had joined News Corp. 15 years earlier from the company's primary outside law firm and rose to general counsel in 2004. With an office two doors down from Murdoch, he had been the chairman's most trusted legal adviser. Jacobs wanted headquarters—New York—to take control of the matter instead of letting the London operation run what amounted to an investigation of itself. (James Murdoch said nothing, refusing to get involved.) Murdoch, however, did not want another arm of his own empire to potentially expose Brooks and Lachlan. Rejecting Jacobs's advice, Murdoch chose that evening to stick to the London-based containment strategy, with Brooks supervising it.
Nine months later, the consequences of that decision still reverberate. Though none gathered at Murdoch's home that evening could have foreseen the slew of allegations, arrests, and public outrage that loomed, by sticking with London's effort to quarantine the scandal, Brooks and Lachlan Murdoch were, in particular, suspected of a cover-up. In retrospect, Rupert Murdoch's instinct to be loyal to his son that night could possibly even affect James' chances of inheriting News Corp.
Murdoch's multimillion-dollar, multistory townhouse sits at the end of a cul-de-sac not far from Buckingham Palace. As Murdoch discussed legal strategy with his top executives over drinks, there was a notable absence: Jacobs. He and three lower-ranking advisers—Jeff Palker, William Lewis, and Simon Greenberg—had been told to stay away until right before the dinner began. They shared a drink at the Stafford Hotel nearby and then walked over at the appointed hour. Once Jacobs joined the gathering, the chemistry abruptly changed. In the month leading up to the dinner, he had chafed at Klein's recommendation of Sullivan as outside counsel and sparred with the powerhouse defense attorney over his approach to the case.
The far side of the living room opened onto a balcony with a stunning view of Green Park. Off in another direction was the dining room with a large rectangular table. The assembled executives fragmented into smaller groups, cradling their drinks and wandering around the room and onto the balcony to take in the fresh air.
Brooks was typically at the center of any small gathering involving Murdoch, but as the other executives mingled, she and Sullivan migrated to a corner of the balcony. According to one observer, Sullivan spoke to her sternly, reminding her not to hold anything back from him. Brooks returned from the tête-à-tête looking slightly shaken.
When it was time to sit down for the meal, everyone took assigned positions. Murdoch sat in the middle of the long table, flanked by Klein and Sullivan. Directly across from him was Brooks, and next to her was James. At one end of the table sat Jacobs, Palker, and Carey. At the other end sat Lewis, Greenberg, and John Villa, Sullivan's right-hand man from Williams & Connolly. Lachlan pulled up an extra chair to be on the periphery. Before the group could settle into their chairs, Brooks expressed mild embarrassment at being in the prime position, even though she had arranged the seating personally. She turned to Carey and coyly insisted that he switch seats with her. Carey demurred. She made the same offer to Jacobs, who also declined.
As the meal began, Murdoch laid out the ground rules for the company's legal strategy, according to people at the dinner. "This is going to be handled by Joel and Brendan," Murdoch said. "I will handle the board." Then, in a growl, he added: "Everyone else stay out of it."
Over steak, Klein introduced Sullivan. "Rebekah is innocent," Sullivan told the guests. The attorney, who rose to fame by defending Lieutenant Colonel Oliver North in the Iran-Contra hearings in the 1980s, cited his long experience dealing with individuals accused of wrongdoing. Based on his conversations with Brooks and his preliminary review of the evidence at hand, he continued, criminal charges against her would not be warranted. Sullivan outlined the game plan he was recommending to the company. The most important aspect was that Rupert, Lachlan and James Murdoch be kept at arm's length from the scandal, he said. The matter would be run by the News International team in London, an effort headed by Brooks.
As the flinty, spectacled Washington lawyer spoke, Brooks watched him intently, appearing to follow his every word. At the far end of the table, Jacobs slumped in his chair. Despite his history advising Murdoch, his counsel in this matter had been ignored. The next day, Murdoch boarded his corporate Boeing 737, along with his New York team and the Williams & Connolly lawyers, for the trip back home. Jacobs later lamented to a friend that he felt like someone who was made of "cellophane" during the transatlantic flight. Klein, Sullivan, and others kept passing back and forth in front of him discussing legal issues as if he weren't there. Two weeks later, Jacobs resigned his post with News Corp.
Over the next month, Brooks led the efforts of an internal "management and standards committee," comprising Lewis, Greenberg, and Palker, which would respond to specific police requests for information while not actively searching for any evidence of wrongdoing. The short-term goal following the dinner was for the committee to reconstruct a file of some 2500 internal emails gathered in 2007 and have them reviewed by an outside expert, presented to News Corp.'s board of directors, and then handed over to Scotland Yard.
On June 16, Murdoch hosted a party at the Orangery in Kensington Gardens, an annual affair that he usually scheduled around News Corp.'s London board meeting, and attended by Prime Minister David Cameron and opposition leader Ed Miliband. It also seemed like a pre-party for News Corp.'s bid for 100 percent control of BSkyB, or British Sky Broadcasting Group, the largest pay-TV company in the UK and Ireland—a deal that was mere days from final approval. (News Corp. already held—and still holds—a 39 percent controlling stake in BSkyB, which has a market capitalization of approximately $20 billion.) A sudden lightning storm drove the revelers inside at one point, the only blemish on a splendid evening.
Two weeks later lightning struck again. On July 4, *The Guardian* reported that phone hacking at *News of the World* extended beyond eavesdropping on celebrities and sports stars to Milly Dowler, a 13-year-old girl who disappeared in April 2002 and was eventually found murdered. Over the next week, News Corp. withdrew its BSkyB proposal, closed its racy Sunday tabloid, and Rupert Murdoch apologized in person to the Dowlers.
On July 15, Brooks resigned. Two days later, she was arrested, questioned, and released without charges. Two days after that, Rupert, Lachlan and James Murdoch appeared before the British Parliament's Culture, Media, and Sport Committee, and Lachlan had to answer for his own role in signing a lucrative settlement with a phone hacking victim in 2008. He insisted he had no idea that phone hacking was rife at *News of the World* and said he signed off on the million-dollar legal settlement on the recommendation of his lawyers. (Days after his testimony, two former subordinates challenged that claim, and Lachlan was called back to testify again in November.) With Brooks out, meanwhile, the role of running the management and standards committee fell to Klein.
Under Klein's direction, the committee began a thorough housecleaning managed out of New York and driven by an outside law firm in London. Since last summer, the internal committee has extended full cooperation to the police, spooking current and former employees of Murdoch's British newspapers. James has continued to be relatively silent, finding this the best policy regarding his succession, even as he has effectively held the power at News Corp. for eight years now.
Lachlan continues to put up a brave front, even as his situation deteriorates. In December an email emerged that backed up his subordinates' version of events and undercut his claims of ignorance of the phone hacking's scope. Worse, the email—a hard copy of which was discovered in a crate belonging to one of the former subordinates and volunteered to Parliament by News Corp.'s outside attorneys—had been erased from a server in January 2011 after News International had been made aware that the police were interested in any new evidence of phone hacking at the company.
As of February 8, 2012, News Corp. settled 54 phone hacking civil cases, paying more than $7.9 million in damages, even though the company did not admit to any wrongdoing. Another civil trial is set to begin on February 27. In coming weeks, the British parliamentary committee is expected to issue a report that will censure the management of News International, including Lachlan Murdoch, for misleading Parliament.
If Rupert Murdoch had chosen a different path at that dinner in London, the company might have dodged the worst consequences of the Milly Dowler revelations. It's rarely the crimes of subordinates that threaten executives; it's the cover-ups that reach the highest ranks of an organization. Lachlan would still have suffered in the short term for heading News International at a time when it was obscuring the extent of phone hacking, but he could have avoided the embarrassment of making firm claims before a parliamentary committee that were eventually contradicted by email evidence. (Lachlan has written to Parliament to explain that he has never been deliberately misleading and never read the damning email to the end.)
Klein is moving in the opposite direction from Lachlan. Though he came in last year as head of News Corp.'s education division, in the course of the phone hacking scandal he has emerged as Murdoch's consigliere. Empowered to eradicate, root and branch, any bad behavior at the British newspapers' offices in Wapping, East London, Klein has also built his own power base in the executive suite at News Corp. headquarters in New York. The company hired Gerson Zweifach from Williams & Connolly—the firm recommended by Klein last year—to be its new general counsel, replacing Jacobs. Natalie Ravitz, who worked for Klein when he served as New York schools chancellor, is joining News Corp. as Rupert Murdoch's chief of staff. Klein has also moved into a new office beside Carey and one door down from Murdoch, in the space formerly occupied by Jacobs. As for Rupert Murdoch, he seems to have absorbed a painful lesson from the events of the past year. In January he included this in a Twitter message: "No excuses for phone hacking. No argument."

**"Murdoch Conclusion Stirs Memories Of His Old Foe Maxwell," *Chicago Tribune*, May 1, 2012**
If he had not died 20 years ago, Robert Maxwell, the disgraced newspaper tycoon, might have allowed himself a wolfish grin at the verdict of a British Parliamentary committee on his old rival, Rupert Murdoch.
Murdoch, according to the House of Commons select committee on culture, media and sport, which examined the phone hacking scandal now convulsing the Australian-born mogul's media empire, "is not a fit person to exercise the stewardship of a major international company".
That wording immediately awoke memories of a judgment passed on Maxwell a generation ago by another arm of the British establishment, the Department of Trade and Industry, which had investigated the takeover of his Pergamon publishing business by an American company.
After finding that Pergamon's profits were based on dealings with Maxwell companies, the department concluded in 1971 that the publisher was "not a person who can be relied upon to exercise proper stewardship of a publicly quoted company".
Despite the damning verdict, Maxwell went on to run a global publishing empire which positioned him as a rival to Murdoch, just arrived from Australia and already starting to build a media colossus of his own.
For years, the two men bestrode the intertwined worlds of media and politics in Britain. Maxwell controlled the Labour-supporting Mirror Group Newspapers while Murdoch had the *Sun*, the tabloid that backed the Conservative Margaret Thatcher.
In New York, they also owned rival tabloids. Maxwell had the *Daily News* and Murdoch *The New York Post*.
Both were outsiders, Murdoch with his contempt for the old-school British establishment which he felt looked down on his rude Australian ways, while Maxwell was by origin an East European Jew, some of whose family perished in the Holocaust.
Decorated for bravery by the British army in World War II, Maxwell also had connections to the world of espionage and later consorted with Communist rulers in the Warsaw Pact in pursuit of his publishing interests.
Endlessly litigious and exuding the sulphurous whiff of financial scandal, Maxwell was dubbed the "bouncing Czech" by then Prime Minister Harold Wilson, under whom he served as a Labour member of Parliament during the 1960s.
The full extent of Maxwell's fraudulent dealings was only revealed after he died in 1991, when his body was found in the sea near his luxury yacht, the *Lady Ghislaine*, off the Canaries.
While controversy swirled over whether the corpulent 68-year-old had slipped, committed suicide or was the victim of an assassination by Israel's Mossad secret service (and then later speculation arose about what relationship he may have had with financier and convicted pedophile Jeffrey Epstein, for whom his daughter Ghislaine was procurer), it became clear that Maxwell had stolen hundreds of millions of pounds from employee pension funds to prop up his crumbling media empire.
The verdict of the Department of Trade inspectors 20 years earlier had not prevented Maxwell, an avowed socialist, from taking control of a string of companies, but in the end the judgment was shown to be essentially correct.
But while Maxwell was accused posthumously of fraud, the case against Murdoch, as articulated by the Parliamentary committee and by a judicial inquiry also now in progress, revolves around journalistic ethics.
Murdoch, long seen by his enemies as a sinister power behind the throne in British politics who could make or break governments through his newspapers, whose American holdings had supposedly infected the Republican Party into a corrupted version of itself, was reviled as the "Dirty Digger" in a nod both to his Antipodean origins and the ability of his journalists to unearth scandal.
As the phone hacking scandal has unfolded over the last few months, Murdoch's influence over British politicians, at least, may well be irretrievably lost, the baleful spell he exerted over successive administrations broken by a series of damaging disclosures detailing how his reporters hacked the phones of celebrities, politicians and even a murdered teenage girl.
The hacking scandal has so far not affected most of Murdoch's media interests, which include *The Wall Street Journal* and 20th Century Fox in the United States and pay-TV operations elsewhere in the world. But it may occur to shareholders of News Corporation that the 81-year-old Murdoch is no longer the man they want controlling the $50 billion business.
Certainly the language of the parliamentary committee's report was damning enough. But Murdoch may well be thinking back to what was said about his old rival all those years ago and conclude that harsh words alone will not be enough to put an end to his career.

**"Brotherly Love: How the Murdoch Sons Could Destroy Their Father's Empire," by Gabriel Sherman, *New York*, January 2, 2014**
Even with the split of the assets of News Corporation into a second News Corp and 21st Century Fox, one could still easily believe that Rupert Murdoch, the mastermind of this multi-continental empire, is still very much at the top, like he has been for decades. The man who built his fortune off of a single Australian newspaper into basically enshrining himself as the news group Down Under, owns a considerable imprint in Great Britain, the largest grouping of conservative-leaning journalism in America, and one of the biggest film and television studios in Hollywood, may be growing far older and weathered, but his touch still seems golden, with every sign that he is not slowing down anytime soon.
But of course, if you scratch the shiny happy surface, the cracks are all too visible. Insiders state that Murdoch has not had significant duties in his conglomerate since 2006, when he was sidelined most of the year from walking pneumonia. Since then, he's had a number of continuous ailments in fairly regular order, including several bouts of flu, a hip replacement, the onset of arthritis, and also once fell off his yacht and nearly drowned. "Rupert hasn't been a significant force in the company in almost a decade," one insider states. "Since then, we've been struggling to readjust, but it's come with a lot of blood and anguish."
Indeed, around the time Murdoch first fell ill, one of the most notable jewels in the crown, the Fox News Channel, was roiled by scandal, with the revelations that the channel's chairman, Roger Ailes, and chief talent, Bill O'Reilly, were unrepentant sexual predators who had been ravaging the female staff and correspondents and bullying them into silence ever since the channel's launch in 1996. This was at a very crucial time, as the downfalls of the likes of Harvey Weinstein, Bryan Singer, Charlie Rose and David Geffen were playing out, and they had been keen to trot out their familiar, bloviating talking points blaming "liberal elites" for being responsible for attacking American culture and family values to lead to this. Many news media watchers, such as the watchdog groups Media Matters for America and Fairness and Accuracy In Research (FAIR) have commented how Fox News' overly combative stance, always viciously attacking Democrats, had turned it into basically an apparatchik for the GOP. "Make no mistake," Eric Boehlert, a longtime contributor to MMfA, responds. "Fox News has never been a news network, just a propaganda machine. Of course, since Ailes and O'Reilly, they've worked more to appear moderate and reasonable, and scrub their image clean. But they still will get veiled potshots of extremism in there, cloaked in their new shield."
While this was going on, without Murdoch to personally step in, his sons, James and Lachlan, began openly vying for control of the behemoth. James personally took it upon himself to remove Ailes and O'Reilly and help craft new memos from the top to begin the PR restructuring. Compared to his father, James has always been more left of center, even quite friendly to more liberal groups and politicians. However, Lachlan is an unreconstructed neocon, who wants more than anything to double down and go even farther to the right than in the past. As a result, the brothers have spent the last decade in an ugly internecine conflict, constantly undermining each other, even if it's at the empire's expense.
For example, James decided to build a new code of conduct for News Corporation's American journalism holdings, especially Fox News, to put stringent standards on employee conduct, especially for male correspondents. Lachlan took great offense, particularly on how news talent would behave during broadcast, with a guideline of "appear as professional and reserved as possible. Gusts of passion can be counterproductive." Lachlan said this would neuter the channel's segments, especially those by then-correspondent Sean Hannity, who was particularly known for ranting and bluster comparable to O'Reilly's. Lachlan basically tore up the code of conduct, and encouraged Hannity to be as out there as possible. Only months later, when Hannity's segment in Sacha Baron Cohen's mockumentary *Borat*, ironically distributed by 20th Century Fox, went viral because of how he clearly fell into the trap, he went ballistic and quit his position on air. "James and Lachlan got into a fistfight afterwards," a staffer reports. "They bloodied each other considerably and basically tore up Roger's old office. The staff was terrorized, especially because they kept on throwing punches and insults at each other, even caused a lot of collateral damage. They had to be thrown out of the building and even prevented from coming back at any time. Rupert just about had a coronary when he heard."
While Fox News seemed to recover and align more with James' urgings afterwards, Lachlan decided to proceed on a scorched earth campaign by redirecting his energies to England and Australia. Of course, the *News of the World* phone hacking scandal and continuous erosion of journalistic standards at publications like *The Australian*, with climate change denialism and Holocaust minimizing op-eds and blatant electioneering for the Liberal Party of Australia (which does not mean the same thing as the title implies) came back to haunt Lachlan, especially as Australia began moving to push back against the Murdochs' influence and the country swung ever more leftward.
"James is clearly winning the war, but Lachlan refuses to admit it," a board member says. "He's pushing the conflict to ludicrous lengths and doing any action that will spite his brother. If the situation isn't resolved, their father's empire will be lost this time next decade." Indeed, the split of News Corp into its current state seems very much like a retreat from the all-media empire their father had labored long and hard to build ever since apprenticing under his father, Sir Keith Murdoch, in his younger days in Australia. Meanwhile, Rupert Murdoch continues to be positioned as the point man and face of it all, and speak confident platitudes about the future. And after having divorced his third wife, Wendi Deng, he has constantly been seen in the company of Mick Jagger's former flame, Jerry Hall, leading to speculation that they are romantically attached.

**"Congress, Parliament and Australia Announce Multi-Pronged, Multi-Year Inquiry Into Murdoch News Empire," *The Washington Post*, January 21, 2017**
Today, Congress, Parliament, and the Australian government all announced bipartisan special committees to investigate News Corp., the print media assets owned by billionaire mogul Rupert Murdoch and his family, which span America, Great Britain, Continental Europe and Australia. Since the '70s, Murdoch has been on a tear of rapid expansion, building an empire from his father Keith's newspaper *The Australian* into owning 60 percent of all news media in Australia (*The Weekend Australian, The Daily Telegraph, The Sunday Telegraph, The Sportsman, The Herald Sun, Sunday Herald Sun, The Courier-Mail, The Gold Coast Bulletin, The Advertiser, Sunday Mail, The Mercury, The Sunday Tasmanian, Northern Territory News, The Sunday Territorian, The Queensland Times*, many local community newspaper groups in each territory, *GQ Australia, Vogue Australia, Vogue Living*, Foxtel and Sky News Australia); UK outfits *The Times, The Sunday Times* and tabloid *The Sun* (it formerly owned and published the now-defunct tabloid *The News of the World* and *Today*, both of which shuttered because of the phone hacking scandal under Lord Leavesden), and wireless radio station operator Wireless Group; *The New York Post*, Dow Jones & Company (*The Wall Street Journal, Barron's* and *MarketWatch*) and book publisher HarperCollins.
His 21st Century Fox group (which used to be under the News Corporation umbrella with the print assets until he divided the group into two companies with the print media assets being called News Corp) owns the 20th Century Fox film and television studio (alongside the imprints Fox Searchlight Pictures, Fox 2000 Pictures and Blue Sky Animation), the Fox Broadcasting Channel, the Fox News Channel and Fox Business Channel, various Fox Sports regional groups, a 39 percent stake of Sky and Sky News in Britain and Europe, the Tata Sky joint venture in India, and various other properties. As a result, Murdoch emerged as a true media baron alongside the likes of erstwhile rivals Sumner Redstone and Ted Turner. He has a net worth in the tens of billions of dollars.
However, according the mission statement of the three investigative committees, Murdoch has achieved all this at a debilitating cost to journalism, public trust and the political process, and spawned dangerous, fascist-like elements deep among right-wing politics. "Rupert Murdoch has blood on his hands for coarsening public discourse and pushing an extremist corruption of conservatism onto a pliable public that swallowed it whole," Democratic Senator Charles Schumer of New York stated at a press conference. "He and his companies may have proceeded to cloak it into a garb of respectability and deniability in recent years, but the truth is quite plain in the internal rot within, and the failed insurrection last November, because those viewers could not accept that a Democrat had won the election." "It truly is in our best interest to tackle this cancer that has infected politics on three continents and amputate it before it can cause anymore damage," former New York Republican Senator Al D'Amato stated at the same press conference.
"It is within the best interests of all citizens worldwide to look deep at what Rupert Murdoch and his family has allowed to happen unabated for decades," UK Prime Minister David Cameron personally stated at the same press conference. "The true cost of what has taken root because of Rupert Murdoch's influence in the media needs to be fully calculated, and he must be held accountable for it all, even if it is little more than losing his precious empire."
Australian politicians Kevin Rudd and Malcolm Turnball, also different sides of the spectrum, stated much the same. "Australia has suffered immensely because of Rupert Murdoch and his machinations, especially to the point that he holds a monopoly of all Australian news media today. This cannot go on unpunished any longer. By hook or by crook, we will excise his influence and liberate Australia's news media."
Since the '80s, Murdoch's empire has foisted a hard-right view on the news on politics, picking up the torch lit by the likes of Richard Nixon, Spiro Agnew, Pat Buchanan and Jesse Helms, referring to the "liberal media" holding popular opinion in a chokehold and shutting out the "silent majority" from being involved in the process or letting their viewpoints being heard. This naturally dovetailed with movements railing against affirmative action, "political correctness", feminism, abortion, LGBT rights and representation, environmental concerns, income inequality, and antiwar protests. This process reached its natural apotheosis with the premiere of Fox News in 1996, led by then-CEO Roger Ailes, a former speechwriter and strategist for Nixon, who especially crystallized complaints against the "mainstream media" and came up with Fox News' slogan: "Fair and Balanced." But in effect, Fox News and the rest of Murdoch's empire became an apparatchik for the Republican Party, which veered ever more to the right and pushed the Overton window in that direction to make the most moderate and conciliatory Third Way Democrats look like raging Marxists.
"Fox News was a sign that journalism's ethics and standards were under attack," says Eric Boehlert of the media watchdog group Media Matters for America. "Not just by them and their own actions, but in how the rest of the media would potentially respond by bending over backwards in order to show themselves to not be 'liberal media' and hold Democrats to a ludicrously higher standard. It already happened under the first Clinton administration, with the Whitewater days and Ken Starr and the constant attacks. It happened to an extent to Al Gore and his campaign in 2000, when the media frequently fawned over George W. Bush and feting Ralph Nader, and hammering Gore as corrupt, kneecapping Bill Bradley with advance knowledge or conspiring to steal Bush's debate prep materials. And it was happening to an extent under the Bush administration, mainly in the first term, with a lot of 'access journalism' going around."
Things began to switch around in the year 2006, when waves of allegations of sexual assault and harassment against Ailes and Fox News' chief anchor talent Bill O'Reilly came out, especially taking great precedence and airtime in the post-Weinstein days, and the unfolding news about figures like Bryan Singer, David Geffen and Charlie Rose were picking up steam. Ailes and O'Reilly initially doubled down, and tried to swing the narrative around to Rose in particular, but it failed, resulting in their ouster, and it, along with a very public prank being pulled by Sacha Baron Cohen during the filming of *Borat* (ironically distributed by Fox), led to new top talent Sean Hannity bolting from the network in a huff. Plus, by this time, Murdoch began suffering a series of health setbacks, starting with a lengthy case of pneumonia, which would result in him having less and less direct control of his empire, and his sons, liberal-ish James and unreconstructed neocon Lachlan, fighting for the kingdom. James would end up the ultimate victor, and began pushing for new standards of workplace behavior as well as to tamp down the bloviating at Fox News, to which he had mixed results. The network began pushing to be more moderate in tone and content, while still sticking to a right-of-center worldview, though there were arguably "coded messages" being transmitted on the airwaves.
"Fox shifted its tactics the way Republicans as a whole shifted their pitch starting with Nixon's Southern Strategy," says Democratic Party political strategist James Carville. "They couldn't go out and scream the N-word or support segregation, so they turned it into 'states' rights', 'freedom of choice', 'welfare queens', 'law and order', 'right to work' and other dogwhistles. Fox has done the same thing for the last decade, giving itself an out of 'we're not saying this, but...', and creating a way to put distance. They won't explicitly call abortion specialists baby killers, but read between the lines, that's what they're saying." As for the workplace reforms, Lachlan effectively moved to undercut James' work, and as a result, yet more scandals and allegations continue to flow, as detailed by recent allegations by the likes of Megyn Kelly, Gretchen Carlson, and others.
Lachlan has busied himself with trying to shore up the empire in Britain, Europe and Australia, and the phone hacking scandal gave them a noticeable black eye and the shuttering of *Today* and *The News of the World*, but little else. Down Under, the advocacy for the far-right, especially blatant electioneering for the oddly named Liberal Party of Australia (which is not left-of-center at all), is even more upfront and insidious. *The Australian*, in particular, has published many dangerous op-eds espousing climate denialism and even Holocaust denialism or minimization.
And despite James Murdoch's announcements to further tighten the ship, especially with the American holdings, and put further restrictions on Fox News' broadcasts and behaviors, this is not enough for those who have created the commissions. The three committees will work both separately and in tandem to investigate the entire history of the News Corp/Fox empire, through subpoenas and testimony, and will have the power to collect reams of physical and digital documents. The committees announce that their investigation will be long and slowly-paced, with their findings released no earlier than 2020. If they find that Murdoch and his family have caused grievous and undeniable harm, regardless of current practices and reforms, they will also launch grounds and action to break up the empire, especially the news assets, in what would be the largest such action since the 1984 AT&T divestiture and the largest such legal action, successful or not, since the antitrust suit against Microsoft in 1998.

**"The Meek Shall Inherit The Turf," by Gabriel Sherman, *New York*, January 5, 2018**
*James Murdoch gets the last laugh in the fight for Rupert's empire*
With the pending sale of 21st Century Fox to The Walt Disney Company, a $52 billion investment by The House That Walt And Mickey Built, Rupert Murdoch's empire is about to get a lot smaller. Just about all that will be left are the actual Fox-branded channels and the studio lots (though they will be leased out to Disney), which will be renamed under the umbrella of Fox Corporation, and the print assets under the second News Corp. But gone are Fox's film and television production assets (though they all will keep the Fox name like the Fox channels, disregarding any potential for confusion), and decades' worth of consolidation are effectively gone. It also happens to come at the time that the entire empire has been under the microscope of bipartisan fact-finding commissions in America, Britain and Australia, investigating the cost and effects of Murdoch's decades of influence, especially after the failed insurrection of November 2016 after Hillary Clinton won the Presidential election.
The sale also represents the end of another chapter in the history of the Murdoch kingdom, the end of the fighting between Rupert's sons, James and Lachlan. The latter gave one year's notice, saying that he will leave his post when the Disney sale closes. This puts James firmly in charge of affairs, and also represents the fact that, politically, this will reorient the news assets to be more moderate compared to the unvarnished neoconservative viewpoint of decades past, as exemplified by Rupert and Lachlan. While after the removal of Roger Ailes and Bill O'Reilly back in 2006, and Sean Hannity's departure shortly after, as well as harsher penalties for Internet hate speech, Fox News and the print media had moved to appear far less extremist and bellicose in their rhetoric, they were often merely couching their viewpoints in a more veiled fashion, trying to walk a fine line between showing their real selves and appearing respectable (especially when sexual harassment and assault scandals continued to pop up after Ailes and O'Reilly's departures). Now, the last vestiges of their original image will be swept away, a move that has led to many of the network's most notable "talent" leaving to go to far more fringe outfits.
"Make no mistake, this is an absolute sea change," says one longtime staffer on the 21st Century Fox board. "Rupert's vision has effectively come to an end. It's hard to say how he feels about all this, given that he hasn't really been present or involved in nearly 15 years, because of all his health issues. The fact that James, who has been more left-of-center compared to his father and brother, has picked up the keys to the kingdom, and helped usher a mammoth yard sale of much of it, is beyond astonishing. None of us could have ever imagined something like this happening as little as a decade ago, even after some of the changes had taken effect. The fact that the Murdoch family will also have no seats on the Disney board, and that James doesn't particularly care about that even though he'd clearly angled for it, is beyond mind-blowing. It's like waking up in bizarro world."
Beyond the fact that James' ascendancy means Lachlan's exit, another Murdoch sibling is also quickly on the rise. Sister Elisabeth has formed her own imprint, Locksmith Animation, which has a first-look deal with 20th Century Fox, but which could easily change after delivering one or two films, and could also change depending on how Disney feels about that deal. Elisabeth is also a key investor in SpringHill Entertainment, the production company of NBA superstar LeBron James, who has been seeking to branch out in film and television projects, most notably a James-starring sequel to the cult classic *Space Jam*, which famously starred Michael Jordan as playing in a basketball game with the Looney Tunes. Elisabeth is certainly a potential rising star, especially given her lack of political baggage on either side of the spectrum.
As for Rupert, besides the glowing words he gave in the press release announcing the sale to Disney, the fact that an empire he spent his life building will be dismantled must weigh on him quite heavily. Of course, he's also been able to enjoy the fruits of semiretirement, especially with his marriage to Jerry Hall, formerly the romantic partner of Mick Jagger, back in 2016. Regardless, the Disney deal effectively will take everything and everyone into unprecedented territory, and it remains to be seen what the end result of it all will be. It also effectively signals another sign of the end of the age of the media barons of old, when the entertainment industry was carved up by the likes of Marvin Davis, Barry Diller, Sumner Redstone, Ted Turner and Murdoch. A more amorphous version of the map of things is clearly about to emerge.

**"News Corp Dissolves, Fox Corporation Fully Spun Off-Murdoch's Empire Disintegrates," by Cynthia Littleton, *Variety*, May 15, 2021**
Today, News Corp, the print media assets owned by Rupert Murdoch and his family, formally dissolved after giving up ownership of all of its holdings. This includes 60 percent of all news media in Australia (including Murdoch's very first newspaper, *The Australian*), considerable news holdings in the UK (*The Times* and *The Sun*), *The Wall Street Journal, Barron's, MarketWatch, The New York Post,* and the book publisher HarperCollins. All of them have been spun off into independent ownership, as part of a massive, combined, three-continent antitrust settlement. In addition, the Fox Corporation, the remnants of 21st Century Fox that were not purchased by Disney, such as the Fox Broadcasting Channel, Fox News Channel, Fox Business Network, and regional Fox Sports channels, has been fully spun off as an independent entity as well, with more stock than ever available to be publicly traded.
News Corp shareholders in America and Australia who did not liquidate their holdings prior to today shall be made as whole as possible by the creditors' settlement board and website. The company froze trading on the New York and Australian Stock Exchanges two weeks ago, and has now been formally delisted from both. Despite the recent moves, the stock had been trading for considerably high prices before May. Fox Corporation stock rose $13 today.
All of this comes in the aftermath of the bipartisan fact-finding commissions in America, Britain and Australia publishing their joint findings back in March, which found that Murdoch and his news holdings did irreparable damage to all countries, and completely excoriated Murdoch for his conduct and governing policies over several decades.
"The conclusions are inescapable: Rupert Murdoch has blood on his hands for all the hate and violence spewed by his holdings and committed by the viewers and readers of them," says Democratic Senator Al Franken of Minnesota. "Liquidating his empire is the least that can be done to redress the balance."
"It is a new day in Australia and Australian news media," says former Australian Prime Minsiter Kevin Rudd. "No longer will Australia be hostage to the Murdochs and their machinations."
Already, prior to these developments, most of 21st Century Fox was purchased by Disney for more than $52 billion, including the 20th Century Fox film and television studio, and Fox News and their ilk had moved to transmit an image of responsible, measured, moderate right-of-center opinions as well as acting and behaving more like an actual news network. But all of this came too late to save the rest of Murdoch's empire.
Murdoch's son James, the somewhat more left-of-center figure in the family that ended up winning the right to inherit the kingdom, and who had moved to try and repair the damage done in the last few years, will now officially retire from business from the time being, joining his neocon brother Lachlan, who officially yielded in 2018. This effectively leaves sister Elisabeth, owner and CEO of Locksmith Animation and major investor in Lebron James' SpringHill Entertainment, as the active force in the family.
As for Murdoch himself, no criminal charges are being drawn up against him, as no evidence of criminal wrongdoing was found by the commissions, and he will pocket the most money from the current liquidation, leaving him richer than ever as he moves to full retirement.
"It certainly is quite inconceivable," says Democratic political strategist James Carville. "After the commissions' work, Rupert Murdoch is going to walk away the largest winner in all this. That was already the case with the Disney sale, and now it's so again. He'll live out his remaining years in comfort and wealth, answerable to no one but himself. He seems to live a real charmed life, in spite of all the damage he's done."

Alien Space Bat Notes1. Due to unrelated butterflies in the timeline, Princess Diana never died in her infamous crash in 1997.