MURDOCH'S HEIR APPARENT?

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Britain's phone-hacking scandal has left Rupert Murdoch's business in crisis and cast doubts over the future of his son James. Time to revisit a rare interview he gave in 2009 to Sophie Barker ...

From INTELLIGENT LIFE Magazine, Spring 2009

James Murdoch is keen to show off his new toy: a €200m hi-tech palace marooned in the working-class Milan suburb of Santa Giulia. This is Sky Italia’s headquarters, the shiniest show-home on the Murdoch monopoly board. And the 36-year-old pacing around its seventh floor is in charge. Not just of Sky Italia, which has 4m subscribers, but also of the British broadcaster BSkyB, which has 9m. And of News International, owner of four British newspapers—the Times, Sunday Times, Sun and News of the World. Plus Asia’s largest satellite broadcaster, Star TV—far bigger than Sky. And a clutch of smaller television interests in Europe. One day, when Rupert Murdoch (now 77) finally gives up the ghost, his younger son will probably take control of the rest of the News Corp empire too. While other media-owning families, like the Sulzbergers and the Bancrofts, either wobble or walk away, the Murdochs march on. James is Citizen Kane in waiting.

Tall, lean and immaculately tailored in a dark-grey suit, crisp white shirt and thin chocolate-brown tie, he greets me with a firm handshake. His eyes are big, dark and doe-like, rimmed by small steel specs. He has a tan and a two-inch Harry Potteresque scar in the middle of his forehead. “So…welcome.” Murdoch is big on courtesy, in a way that feels like a legacy from his preppy upbringing on New York’s Upper East Side. He thanks me twice for travelling to Milan, thanks the waitress who brings him his macchiato and water—first in English, then in heavily accented Italian—and apologises to me for being late, when he isn’t.

With this über-politeness comes a steely determination to control our conversation. He seldom gives interviews—a scar from the mauling he received at the hands of Britain’s (non-Murdoch-owned) media when Rupert picked him to run BSkyB in 2003. So he may be nervous. Add to that the fact that he’s used to being the boss: he has been running massive businesses since he was 27. And he’s damned if he’s going to let a journalist get the better of him. He has allotted me 45 minutes of his day and he seems almost too prepared. His silver pen hovers above a notebook with “Sophie” written on a fresh page and underlined three times. A couple of feet away sits a PR man, nodding, smiling and prompting as required—a human shield against unwanted questions.

Murdoch neglects to mention that Dad has been in Santa Giulia too—a fact that emerges days after the interview. When I ask him the reason for his visit to Milan, he says something about meeting European TV executives and checking up on Sky Italia’s Christmas subscription figures. It turns out that James Murdoch is rather good at dodging questions, and not just when they’re about his father. So did JRM and KRM—their News Corp codenames: James Rupert and Keith Rupert—meet in Milan? They might have done. But then again, they might not. The PR buffers refuse to confirm or deny. It’s like meeting the Invisible Man.

Except that JRM is rather omnipresent. His TV channels reach 200m people across 60-odd countries, he decides when Chelsea play Manchester United, he appoints the editor of the Times, and he will have a big say in who might be the next British prime minister. Yet he doesn’t want to talk global politics. His surname is almost synonymous with the capitalist edifice crumbling around him, but he tells me earnestly: “I try to leave public prognostication to other people.” Which is a shame, because those who know him say he enjoys talking politics. Still, he can’t help showing his cards when he spits out that politicians “of a statist inclination…have a great opportunity” to reshape the world in the face of the economic meltdown. His contempt for big government is muted but very real. No surprise there, then: the king of capitalism has bred an ideological clone as his prince regent.

James Murdoch is more comfortable talking business. His is a kind of corporate stream-of-consciousness, delivered super-fast, in east-coast American, with the odd Anglicism thrown in. His newspapers are “products”, their readers are “customers” and the Sunday Times is a “multi-format proposition”. He actually says “crackers” and “golly”—words last heard when British children read the stories of Enid Blyton and drank ginger pop. An upward lilt at the end of some sentences is the only sign of his Australian heritage (he has barely spent any time Down Under). His speech leaves little room for interjections, plenty for corporate platitudes. It all sounds rather as if he’s swallowed News Corp’s annual report, with a couple of MBA textbooks for pudding. With Rupert Murdoch as his father, he didn’t need to go to business school, but he certainly sounds as if he did.

Since stepping up from BSkyB in December 2007 to assume the grand title of “chairman and chief executive, News Corp Europe and Asia”, James has sat in the same building as the Sunday Times, the Sun and the News of the World, at News International’s Wapping offices. This is the east London site which, 23 years ago, was the battleground of his father’s seminal and very Thatcherite fight against the British printing unions (he won). It’s now a rather tired, dated-looking place—not very James Murdoch at all. He wanted to redevelop it, bringing most of News Corp’s other London businesses together, but has had to shelve this plan because of the recession. Still, he has managed to revamp his office and the boardroom: out with the oak panelling and framed front pages, in with glass, plain white walls…and more glass. So anyone wandering around the sixth floor of News’s main building can see the boss through the glass wall. Lest anyone should wonder if he’s in, he also parks his car right on the front doorstep. It is a Toyota Prius—a signal of his commitment to the environment, yet officially, his car is invisible too: the company won’t confirm the make or model. BSkyB became avowedly carbon-neutral under his stewardship in 2006, thanks to initiatives like switching all British sites onto renewable energy. And the Santa Giulia office is as energy-efficient as they come (although I can confirm the taxi sent by Sky Italia to pick me up from Milan airport was not a Prius). Murdoch has even managed to convince his sceptical father that he should do something to help stop global warming.

Colleagues say Murdoch’s first year at News has been solid but unexciting. He opened huge, whizz-bang printing presses in Hertfordshire—inherited from his predecessor, Les Hinton. His own decisions have been swathed in management consultancy (the Boston Consulting Group, to be precise) and include a flatter management structure and a round of redundancies that was less swingeing than some in the media. He has also launched a subscription service for the Times and Sunday Times—something News sneered at when the Telegraph did it not long ago. Ever the salesman, he wants me to subscribe too. “We can hook you up with that. It’s a great service!” he says, without any apparent irony. The PR man hands me a promotional card, telling me to put it in my bag. “Yeah, put it in,” Murdoch urges.

Subscriptions are his great white hope for the Times and Sunday Times in the face of slipping circulation and plunging advertising. It means locking readers into buying the papers at a discount, and then selling them other things: wine, fantasy-football membership, access to the Times archive... Rival newspaper groups are already doing the same thing, but the British market is wildly competitive and Murdoch is not alone in thinking some titles won’t make it through the credit crunch. As News is the only owner with four national papers, this process would concentrate even more power in his hands. “You don’t have to be bullish on an entire sector to believe that a format or a company or a product can be great and can succeed…And some people are going to get it wrong. Right?”

The youngest boss the Times has ever had brought in its youngest editor, James Harding, then 38, previously City editor. The appointment was negotiated when Murdoch hadn’t officially started at News. Harding has nudged the Times back upmarket, something Murdoch seems in tune with. He tells me he wants to concentrate on good journalism, although the subscription hard-sell suggests he may not have that much confidence in content alone selling papers.

When Murdoch talks of journalism, there’s little discernible passion in his voice, and he shows no interest in trading information with me. He sounds more like a businessman than a press baron in the making: he could be selling widgets.

Perhaps he’ll catch the newspaper bug in time (the closest he got in college was producing cartoons for a satirical paper, the Harvard Lampoon). Or maybe there’s just too much going on elsewhere in his fiefdom to pay much attention to a bunch of British papers (this is the first time News has been run as part of a bigger, regional group within News Corp). If he has ink running through his veins, it doesn’t show. His father famously pumps people for gossip like a hardened hack. Although his attention has supposedly shifted across the water to his new toy, the Wall Street Journal, sources inside News say Rupert still calls his British editors regularly to quiz them about their news list. And Rupert’s father, Sir Keith, was a journalist before buying newspapers and laying the building blocks of the News Corp empire in Australia.

So has the Murdoch news gene bypassed James? It’s a question I start to ask, in a more tactful format, before realising I may not get very far. The ghost of a bad temper flits across his face: “You were going to say what? I’m just curious. What sort of assumption came into the room?” He remains light-hearted, but it’s clear that I’ve touched a nerve. A later question about how his business style differs from his father’s prompts a chilly dead bat: “You’ll have to ask others about that.” When I do, those within News say that James is less interested in what goes on the front page of the Sun every day than Hinton was, and Rupert continues to be.

He is more animated when talking about technology. “I’ve got this great high-definition video link, right?” he tells me excitedly. “It sits [in his Wapping office], and with one push of the button—well it’s two—I get a list of people, and push the person, and they come right up!” To me, the most interesting thing about this gizmo is that it’s fixed to his office wall at head height. Just above his desk, which is at chest height. “I’m a big believer in standing up. I told some of the team at News International the other day that I thought they should get rid of their chairs. They weren’t very happy. It was very funny. They didn’t know whether to take me seriously.”

All this standing sounds, well, rather tiring. Oh no, he counters, “because, think about it, you sit down when you go home, then you lie down. So you could stand up and walk around for the day.” Which is clearly what he tries to do, much of it on the phone. He must have a lot of stamina. And very comfy shoes (although a glance under his chair doesn’t fill me with hope for his feet: the shoes are shiny, black and pointy). Still, it’s hard to picture even the hardiest soul reading or writing more than a few paragraphs in one go at a standing desk.

There doesn’t seem to be much room for relaxation in Murdochland. The “transit time” from Wapping to central London rules out long lunches. Oh, and he doesn’t go out for dinner either. “Our sort of culture—well, you won’t find us in a glass-clad building in Mayfair right above the best restaurants, right?” His chunk of News Corp seems to specialise in out-of-the-way industrial parks—something he seems oddly proud of. I am reminded of his father, who famously eschews hairdressers and dyes his own hair over the sink.

James Murdoch gets up at six and works out in the gym every morning, before arriving in Wapping by eight. And he’s usually back home in Holland Park 12 hours later—just in time to put his two young children to bed. He is married to a former marketing executive and model from Oregon, Kathryn Hufschmid, who now works for the Clinton Climate Initiative, the environmental arm of the former president’s foundation. Murdoch likes sailing—which may explain the tan. His musical tastes are broad, ranging from bluegrass to opera. He also enjoys karate and the odd spot of gambling. So, James, tell me about karate. “It’s a word.” And casinos? “Casinos is another word. Where do you get casinos from? I’m worried about that one. That sounds like vice.” Well, have you ever been to one? “I have…I haven’t for a long time, actually. Um, but you know, I play cards every once in a while,” he says. Isn’t gambling the perfect antidote to a hard day at the office? “It’s not as good as karate!” He flashes me the slightly wonky grin he shares with his two full siblings, Elisabeth and Lachlan. He also has three half-sisters: Prue, Rupert’s eldest, who is 50, and Rupert’s two girls by Wendi Deng, who are seven and five.

Those who know James say he would have fitted right into Silicon Valley during the dotcom boom. He understands technology, is a keen advocate for the convergence of old and new media, and gives impressive speeches on the subject a few times a year at carefully chosen media conferences. This has given him a following in the business blogosphere. Everyone I speak to remarks on his polished public performances. He even managed to enthuse a canteen full of grumpy News journalists in January, in a speech about his plans for the papers. Flanked by two screens, laptop in front of him, he was full of whizzy, upward-curving graphs and can-do vocab, with some self-deprecation thrown in for good measure. Many hacks left the room grudgingly impressed, if not completely convinced.

His friends include Charles Dunstone, chief executive of the British mobile-phone retailer Carphone Warehouse, who says: “James is very single-minded and a very clear thinker. He’s very driven on detail: he’ll be involved in all the numbers of the business.” This level of focus, and energy—as well as the blinding ambition mentioned time and again by colleagues—has helped him face the claims of inexperience and nepotism that have followed him up the greasy pole.

Never more so than when he was parachuted into BSkyB, aged 30—the youngest FTSE-100 chief executive by a generation. “I think he bears a great deal of responsibility,” says Dunstone. “There’s an expectation people have of you if you are a Murdoch that has made him quite mature.” Although he looks his age, he behaves like someone ten years older.

A former colleague says: “James wouldn’t think of himself as young or inexperienced. One of the things he likes about himself is the idea that he’s a risk-taker.” So he will have enjoyed the surprised plaudits heaped on him when, as BSkyB chief executive in November 2006, he snapped up 17.9% of a rival broadcaster, ITV, for £940m, thus breaking up its cosy relationship with Richard Branson’s Virgin. Murdoch’s dawn raid in effect killed off the merger of two big rivals: mission accomplished, James. He was henceforth seen as a chip off the old block—although the coup came at a high price: regulators may yet force BSkyB to sell part of its stake in ITV, and as the share price has plunged, it could take a hit of £600m.

His first job at News Corp had been as head of its nascent digital businesses in 1996. In those days, he was a bit of a rebel: an archaeology buff and Harvard drop-out with bleached hair, running his own hip-hop label. Lachlan, a year older, was the golden boy, in charge of News Corp in Australia. Within three years, Rupert had moved James to Star TV, followed by BSkyB, both of which he ran with some financial success. Meanwhile, Lachlan was moved to Rupert’s HQ in New York, still the heir apparent. Five years later, he had resigned as the company’s number three. The spotlight has been on little brother ever since. “Throughout my education, I thought I’d do other things [than work for News Corp].” So what happened? “You just sort of get assimilated,” he says, before pausing. “Is that too Borg-like?” He looks at his PR man, perhaps wondering if it is wise to refer to the race in “Star Trek” whose catchphrase is “resistance is futile”.

While clearly a Borg, James has also taken some steps to break free. In February he became a non-executive director of the pharmaceutical giant GlaxoSmithKline, which set tongues wagging because Murdochs seldom sit on others’ boards. Unlike Lachlan, whose geographical proximity to Rupert was blamed for his sudden departure, James has kept some distance from his father—for the past eight years, at least one continent. “Every child lives in their parents’ shadow,” he says, “until they’re well into old age in many cases.”

So does he want to inherit the whole Murdoch machine when Rupert dies? “I’ve always said the same thing and I really mean it, which is that I always genuinely focus on the task in hand… That’s fundamentally the best way to do my job. And that’s where we go with that. At least I’m consistent.” And in true Rupert style, the succession remains open. Although James is in pole position, the more outgoing, less articulate Lachlan could return to News Corp. As could Elisabeth, who left the family business in 2000 to run her own successful TV production company in London.

And what of the next generation? Does James want his and Kathryn’s mini-Murdochs, whose names he would rather we didn’t print here, to be assimilated too? “They’re pretty small!” he counters. He recently took his oldest to Wapping, where she was given a tour by the editor of the Sun, Rebekah Wade. “My daughter told me she wants to make newspapers [when she grows up]. She thinks that’s what I do. She’s six. I wanted her to see a woman in a big leadership role at a young age,” he tells me. All of which sounds pretty enlightened and New Dad-ish, except that he appears to have got his daughter’s age wrong. My research shows she’s only five—a fact which the PR later refuses to confirm or deny. The Invisible Man has surfaced again.

The 45th minute of our conversation has ticked by, so the PR blows his whistle. Murdoch shakes my hand again, offers some hope that “you got what you wanted” and packs up his silver pen and notebook with the “Sophie” page still blank. And off he walks, alone, mobile phone in one hand, light-brown leather bag in the other.

I went to Milan keen to meet one of the world’s most influential 30-somethings. I left with a bag full of promotional leaflets and an abiding impression of a man holding himself back. His answers were mostly bland—not a word anyone would use of his father. But perhaps that’s the key. Rupert is a big personality, still throwing his considerable weight around. Lachlan and Elisabeth both opted to get out of his way, whereas James has stuck it out—which will have taken certain survival skills. No wonder he is tentative talking about newspapers and more forthcoming on technology: one is Rupert’s strong suit, the other his weak point. James is staking out his territory, biding his time, controlling what he can, which is why he is more comfortable giving presentations than interviews. How much substance lies behind the doe eyes, we may only discover when Rupert is gone. 

Picture Credit:
Kathryn Rathke, NRKbeta.no (via Flickr)

(Sophie Barker used to write the weekly business profile for the London Sunday Telegraph, before taking time off to have three children.)