Rupert Murdoch: 1931-1969

[00:00:09] Morning folks and welcome to today's episode. It's called Rupert Murdoch 1931-1969. And look, Murdoch doesn't need much of an introduction. We all know about him. We all know how powerful and influential he's been throughout his life. But in this episode, we're looking at the very beginnings, the influence of his father, this powerful newspaper executive.

[00:00:36] We see how young Murdoch started with just two newspapers, was underestimated from the get-go, but he battled his way to the top of the media business in Australia by the age of just 37, before then setting his sights on the UK. This is a cracking story. Enjoy.

[00:00:57] Rupert Murdoch, born in Melbourne, 1931. His mother, Elizabeth, came from a wealthy wool-trading family. And his father was Sir Keith Murdoch, one of Australia's most powerful newspaper executives. Now, I usually don't delve too much into the parental backgrounds, but because Murdoch's father, Keith, had such a big influence on his career, it's worth taking a look at him.

[00:01:23] So, Keith Murdoch, he was a journalist, and it was during the First World War that he really made his name when he reported on this disastrous Gallipoli campaign. It was a military operation that was championed by Winston Churchill. And The Rest is History, a podcast that I really love. They have a great series on Churchill, which tells the whole Gallipoli fiasco, well worth listening to.

[00:01:48] And the Gallipoli campaign, as I said, it was a disaster. Thousands of Australian soldiers were killed. But because of British military censorship, Keith Murdoch couldn't report freely on what was happening. So he wrote a long letter directly to the Australian Prime Minister attacking the British military leadership. And the letter helped bring about the eventual withdrawal of Allied troops.

[00:02:15] And it made Keith Murdoch kind of a national hero back home. So then he went back home after the war, worked his way up through the newspaper business. And in 1921, he became editor of the Melbourne Herald. And Keith took a very, very big interest in young Rupert, his only son. He had three daughters. And he was grooming Rupert for the newspaper business from a very early age. Here's a quote from Rupert's mother, Elizabeth. Keith was extraordinary with him.

[00:02:45] At a very early age, he used to talk to him about newspapers and his plans and hopes for the future. And Rupert himself later recalled, I saw that life at close range. And after the age of 10 or 12, never really considered any other. So I suppose what was young Rupert learning from Keith? Well, one thing he was learning was the power of sensationalism. And how to never let the truth get in the way of a good story.

[00:03:12] Because when Keith Murdoch took over the Herald, the first big story he covered was this infamous story that was called the Gun Alley Murder. And it was where a 12-year-old girl was tragically raped and killed in a city alleyway. And the Herald, Keith's newspaper, it published photographs of the suspect, a local wine bar owner named Colin Ross. And of course, publishing that photo could have influenced witnesses and potential jury members.

[00:03:39] And not only that, in a breathtaking act of intimidation, the newspaper printed the names, jobs and home addresses of the jury members. And the frenzy created by Murdoch's newspaper, it was so intense that the main suspect, Ross, his defence lawyer, started receiving death threats. So he wrote a private letter to Keith Murdoch asking him to ease off.

[00:04:06] And instead, what Murdoch did, he printed the private letter from the lawyer on the front page. And Murdoch's paper, it seemed to have made up its mind from the very beginning that Ross was guilty. It gave front page coverage to the prosecution witnesses, whose credibility was very questionable. While Ross himself had a very strong alibi, backed up by several witnesses. But the newspaper treated these with scepticism and relegated them to the inside pages.

[00:04:35] And it was because Murdoch had his story. Ross was the monster and that story was selling newspapers. He wasn't particularly interested in anything that might cast doubt on it. Ross was convicted and hanged. And Keith Murdoch celebrated with an enormous front page headline, Avenged. And in private, Keith Murdoch wrote to a colleague, It was great luck getting the murder story. Circulation leaped up and it has stayed up.

[00:05:03] Then 80 years later, forensic testing proved that the key evidence against Ross was wrong. And a relative of the murdered girl emerged as likely killer. And in 2008, Ross received a posthumous pardon. So, young Rupert's lesson was, you know, as I said, never let the facts get in the way of a good story. Now, Keith Murdoch, he rose up through the ranks of a newspaper group called the Herald and Weekly Times. It was the biggest media group in Australia. And he eventually became the boss.

[00:05:34] And in doing so, he became one of the most powerful media figures in Australia. And, of course, he leveraged that to gain political influence. And to give you an idea of the power he had, in 1931, his newspapers successfully pushed for Joseph Lyons to become the Prime Minister. And here's a description given by a journalist of Lyons meeting with Murdoch after he became Prime Minister.

[00:06:15] So, young Rupert absolutely adored his father. Here's what he said of him. He was an example to me and always left me with a clear sense that the media was something different as an industry. And that it carried great moral obligations. I mean, you know, that's a pretty interesting quote when you consider some of the morally questionable things that both father and son did during their media careers.

[00:06:43] Anyway, while Keith was this powerful media executive, he didn't own that business. He was effectively a very well-paid, very powerful and very well-regarded managing director of the group. So, as he got older, he started building a smaller newspaper business of his own. There was a definite conflict of interest here. But I think it just shows how powerful he was that he was allowed to do this while still maintaining his job as managing director of this other media group.

[00:07:12] Now, young Rupert was sent to one of Australia's most prestigious boarding schools. He wasn't great academically. And he also developed a liking for gambling while at school. Horse racing, cards, but also this Australian game called Two Up, where two coins are tossed and you bet on how they land. And I never knew this about Murdoch, but his liking for gambling, it stayed with him. He continued betting on horses and later his company even gambled on foreign currencies.

[00:07:41] But, of course, as he got older, his biggest bets were on his business. And politically, while his father was associated with Australia's conservative parties, young Rupert was a big supporter of the Labour Party and in his youth he was very, very much on the left. But, you know, as we'll see, as most of us know by now, over the years, Rupert Murdoch's political views became much more pragmatic.

[00:08:08] And I read this great phrase in my research in relation to his views. It was called transactional pragmatism. In other words, you know, he's prepared to support politicians from either side if he believed it would serve his business interests. So Rupert leaves school in 1949. His father takes him to London, introduces him to some of the biggest names in the British newspaper business, and gets him a job as a junior reporter at the Birmingham Gazette.

[00:08:33] And before he leaves, when that summer job is over, he tells the newspaper's owner that the editor is so useless he should be fired. So that gives us a good idea of his confidence in his own abilities. He then goes to Oxford University, studies politics, philosophy and economics, and according to one of his biographers, he dabbled in gambling and drinking beer more than his parents felt was good for him.

[00:08:59] He also kept a bust of Lenin in his room, so that earned him the nickname in Oxford as Red Rupert. While there, he ran for secretary of Oxford's Labour Club, and at that time, the club had this rather unusual rule. Candidates weren't allowed to openly campaign for votes. But Murdoch ignored that rule, organised a campaign team, handed out leaflets, and although he won the election, he was disqualified for breaking the rules.

[00:09:27] But Murdoch, he was never really impressed by Oxford's Conservative traditions, or even by Oxford itself. In a letter to a friend back in Australia, he wrote the following of Oxford, rain, wind, sleet, slush, shit, snow and starch. But in 1952, in his final year, tragedy struck. His father, who had had health problems for many years, he died at the age of 67.

[00:09:55] After the funeral, Murdoch returned to England, because before his father's death, his father had used his connections to get him a job at the Daily Express in London. That was one of the toughest and most prestigious places to get a schooling in journalism. It was a huge newspaper, selling over 4 million copies every day, making it one of the biggest-selling daily newspapers in the world. And while Murdoch stayed at the Express for just a few months as a junior sub-editor,

[00:10:23] he worked under the paper's legendary deputy editor, a guy called Edward Pickering. And Murdoch, he later recalled that in those few months, Pickering taught him the core rules of mass market journalism, the discipline of a picture properly cropped, the selling power of what Murdoch called the 18-word intro. In other words, hitting the reader with the most dramatic headline, grabbing their attention straight away.

[00:10:51] I suppose the newspaper version of what we would now call clickbait. And he brought these learnings back with him to Australia in 1953, when he returned to Adelaide to take over News Limited. That was the small newspaper business his father had been building. He was just 22 years old. So the group, it consisted of a small regional newspaper, some radio interests, and then two larger newspapers. The News, which was a daily tabloid, selling around 75,000 copies.

[00:11:20] And then The Mail, the only Sunday newspaper in Adelaide. It had a circulation of about 170,000. And because that Sunday newspaper hadn't any competition, it was very profitable. And it's no surprise to learn that Murdoch, he gets involved in every aspect of the business. Here's a quote from one of the journalists who worked with him back then. He wasn't an owner sitting behind a mahogany desk. He was in the composing room with grease on his fingers, shouting over the rumble of the presses,

[00:11:49] tearing proofs apart with his hand. He knew every nut and bolt of the mechanical process. And he also was involved in the advertising, the costs, everything. Because the fact of the matter is that Murdoch is a newspaper guy through and through. He knows that business inside out. It really is his first and his lifelong love. But Murdoch's ambition, his ruthlessness,

[00:12:16] like these were qualities that couldn't be seen in a young 22-year-old who had only just started. So some of his competitors thought, you know, this guy's going to be easy pickings. And the first person to challenge him was a guy called Sir Lloyd Dumas. So Dumas, he was one of the most powerful newspaper executives in Australia. He was 62 years old and nice, silver-haired, impeccably tailored,

[00:12:43] very much part of Adelaide's wealthy establishment. And he'd actually been a close friend and associate of Murdoch's father. Because Keith Murdoch had hired Dumas to run Adelaide's biggest morning newspaper called The Advertiser. And Dumas had done an excellent job. The Advertiser was a hugely profitable newspaper. And after Keith Murdoch died, while Rupert was still in England, Dumas approached Keith's widow, Elizabeth, and tried to persuade her to sell the newspaper business.

[00:13:13] When she refused, he launched a rival Sunday newspaper with big backers behind him. And Adelaide, like, it wasn't a particularly big market. There wasn't enough business to support two Sunday newspapers. So Dumas and his backers, they thought, you know, they could afford to lose money for longer than Murdoch could. But Murdoch, of course, he wasn't going to take this line down. As he told his team, To hell with them. We'll fight. Our balance sheet is going to be knocked to hell for a short time.

[00:13:42] But it is going to be a great fight. And I have complete confidence that we will win. And then, a month into this battle, Murdoch showed that, you know, he was prepared to fight dirty. Because there was an unwritten rule back then that newspaper owners didn't publish stories about each other. But Murdoch's paper ran a front page story accusing Dumas of trying to pressure Murdoch's mother into selling the family business immediately after his father's death.

[00:14:10] The story, it even contained extracts from a private letter Dumas had written to Murdoch's mother. Now, the battle, it goes on for two years. They're cutting advertising rates. They're running promotions. They're giving things away. Doing whatever they can to attract readers. And they're both losing money. But crucially, while Murdoch was, you know, financially stretched to the very limit, he held on to his readers. And Dumas was burning through money faster than expected.

[00:14:38] So in December 1955, Dumas was forced to swallow his pride, pick up the phone, and invite the 24-year-old Murdoch to his office to negotiate a truce. They agreed to merge their Sunday newspapers into one business with each company owning 50%. And look, make no mistake about it. This was a victory for Murdoch and everyone knew it. And on the back of this success, Murdoch starts to expand. He's using loans from the Commonwealth Bank.

[00:15:06] They build a really, really good relationship with Murdoch. And they are happy to keep lending him money because he's being successful. He buys a newspaper group in Perth. And to give you an idea of the tabloid style that Murdoch is implementing, here's one of the most famous headlines from back then. Leper rapes virgin, gives birth to Monster Baby. I mean, if that's not clickbait, I don't know what is. And Murdoch, he successfully bids for a television license in Adelaide.

[00:15:36] And then he applies for another license, this time in Perth. And during the government hearing into the application for this license, with the authorities obviously very wary of his growing media empire, Murdoch says the following under oath. There is no attempt to build an empire or anything like that. It would not interest me. The nerve of the guy. Anyway, News Limited's profits, they jump from $62,000 when he began in 1953

[00:16:04] to $432,000 by 1959. And then in 1960, Murdoch makes the decision to move into the biggest market in Australia, Sydney. And I love the story. I covered this story briefly in the episode I did on Kerry Packer. So for context, the newspaper market in Sydney is run by two families, the Packers, and then a second family that are called the Fairfaxes. So the Packers were this loud, you know, bare-knuckle street fighters

[00:16:34] of Australian media, while the Fairfaxes were the exact opposite. They were Australia's oldest, most patrician, God-fearing newspaper aristocracy. And like Dumas before them, they've underestimated Murdoch. So first of all, the Fairfaxes sell in the Daily Mirror. This is a struggling newspaper that they own. They believe that the cost of turning it around will bring him down. And then the Packers come up with a plan to launch a smaller suburban newspaper to take local advertising revenue

[00:17:04] away from Murdoch. But to print this smaller newspaper, the Packers needed a smaller printing press. So Frank Packer comes to an agreement to buy a small printer that was about to go into receivership. Now, Murdoch had also put in a bid for the same business. And when the owner of the building that this printing press was housed in found out that the receiver had reached an agreement with Frank Packer, he replaced the receiver and gave the new receiver the instruction not to sell to Packer because he hated Packer's politics.

[00:17:34] He hated Frank Packer's like bullying methods. And when Frank Packer finds this out, he takes the law into his own hands because just like your typical bully, he believes in that old saying that possession is, you know, nine-tenths of the law. And so on the evening of June the 7th, Packer sends his two sons, Clyde and Kerry, along with several employees. They go into the printing press they barricade the windows, they cut the phone lines, change the locks. And when the owner found out,

[00:18:03] he went straight to Murdoch. And rather than going to the police, Murdoch and the owner hired a local hard man and he gathered a gang of men armed with mallets and wrenches. And around one in the morning, they forced their way into the building and an almighty fight broke out. Kerry Packer was knocked unconscious by a battering ram. His brother Clyde suffered broken ribs and the Packer group fled the building. And Murdoch had sent along a journalist

[00:18:33] and a photographer to cover it all. So the following morning, his newspaper, the Daily Mirror, ran with the headline Knights Sons in City Brawl. Because Frank Packer had recently been knighted. And the newspaper had large photographs of the injured Packers and the details of how they were chased from the building. So Murdoch had foiled his main rivals, gotten a fantastic story with great photos, publicly humiliated Frank Packer and in the end

[00:19:03] successfully bought that printing press. And within 18 months, Murdoch's Sydney newspaper was outselling its rivals. And remember, he was doing all this while managing all of his other media assets, which are scattered across a pretty large country. So he was constantly flying from city to city, working 18 hours a day, seven days a week. And up until now, while his newspapers were very popular, they were for the most part tabloids.

[00:19:32] But, you know, like all great newspaper owners, Murdoch, he wants his newspapers to matter politically. He wants the people running the country to pay attention to what he publishes. So he needs a prestigious newspaper. And at that time, the two main newspapers that were read by the political, the professional and business class, they were the Sunday Morning Herald and the Melbourne Age. But both titles are tied to individual cities and states.

[00:20:01] There isn't a daily broadsheet that covers the entire country. And there's a very good logistical reason for this. Australia is huge with a relatively small population. So attempting to get a daily newspaper out to Sydney, Melbourne, Brisbane, Perth and everywhere else on time every single morning. That is a massive and expensive undertaking. But that's exactly what Murdoch sets out to do with the launch of a national daily newspaper called The Australian.

[00:20:31] So Murdoch sets up the operation in Canberra, Australia's capital, where the country's parliament sits. He hires experienced journalists, builds a newsroom and printing operation. It launches in 1964 and the paper it was beset with problems from the get-go. Like bad weather regularly delays the planes. Murdoch's biographer William Shawcross, he tells the story about Murdoch driving to Canberra airport in his pyjamas pleading with the pilots to take off

[00:21:00] when the visibility was poor. Apparently he'd tell them it's not fog, it's just light mist. And often enough they'd take off. The opening print run was 250,000 copies but within a few months circulation was down to 50,000. The paper was losing over $25,000 a week so that's well over a million in its first year which is a huge amount for Murdoch back then. So he starts to make changes. He fires the editor, moves the printing operations to Sydney

[00:21:29] to reduce production costs and it also made distribution easier. Within three months circulation increased to around 75,000 copies and by the end of the 60s its circulation had reached $130,000. But it still didn't turn a profit and it actually didn't turn a profit until 1985 and it's estimated that it had cost Murdoch overall about $30 million to get it to profitability. But Murdoch is more than willing to finance what was effectively a loss leader

[00:21:59] because it gave him what he wanted. National political clout. Because now radio hosts, the leading current affairs shows, they begin every single show every day reading the Australians front page. So Murdoch, he is setting the agenda. He was able to dictate what the rest of the country debated. And one of the earliest examples of him using that political influence came in December 1967.

[00:22:29] And this is when Australian Prime Minister Harold Holt disappeared while swimming. This was a huge story at the time. So Holt was spending the weekend at his holiday home near Melbourne when he decided to go for a swim in the sea. Now, the weather was terrible, the sea was rough, but Holt was an experienced swimmer and he went in anyway. And he simply disappeared. And because his body was never found, you had all sorts of conspiracy theories, including one

[00:22:59] that he'd been a Chinese spy and had been picked up by a Chinese submarine. But, you know, the most likely explanation and the official finding was that he drowned. Anyway, as a result of his death, there was now this big battle over who would replace him. And Murdoch threw his support behind one of the leading candidates and he used the Australian to help that candidate, running damaging allegations about his main rival on the front page of the Australian for two consecutive days.

[00:23:29] And in the end, the rival went through from the contest and Murdoch's man became the Prime Minister. So, this is probably the first real public display of Murdoch flexing his media muscle and playing the kingmaker. Now, while all of this is going on, there's also a big change happening in his personal life because Murdoch has been married since 1956 to Patricia and they have a daughter, Prudence. But in 1966, a young journalist

[00:23:58] called Anna Torv was assigned to interview him and she later described the impression Murdoch made when he arrived. He was like a whirlwind coming into the room. It was very seductive. So, Murdoch divorced Patricia and in 1967 he marries Anna and they go on to have three children, Elizabeth, Lachlan and James. So, by 1968, Murdoch's media business was estimated to be worth around $50 million. He had eight major newspaper

[00:24:28] titles, 35 suburban newspapers, one TV station, radio stations, magazines, a book publisher, Australia's largest record label, but he was still only 37 years old. And, you know, despite saying under oath just a few years previously that he'd no ambitions to build a huge empire, I mean, well, he clearly had much bigger ambitions than simply dominating Australia because he started to look towards Britain, where the

[00:24:57] newspaper market was much bigger and where he'd spent time learning the business as a younger man. And in Britain, towards the end of 1968, a really good opportunity came along. So, for a bit of context, Robert Maxwell, the flamboyant Czech-born publishing millionaire who will probably forever now be known more as the father of Ghislaine Maxwell, Jeffrey Epstein's notorious fixer, but Robert Maxwell is a fascinating character in his own right

[00:25:27] and I will definitely be doing an episode on it. Anyway, he launched a hostile £26 million takeover bid for the News of the World, Britain's biggest selling Sunday newspaper. And the newspaper was owned by this aristocratic and openly xenophobic family called the Carr family and it was led by a guy called Sir William Carr and I love the description of him, they called him it's gout-ridden chairman. So Sir William, he sounds like a character.

[00:25:56] Apparently he drank two bottles of scotch a day. He was a brilliant mathematician, at least when he was sober and he was known to invite the newspaper employees over to his estate where they'd spend the day quaffing champagne. And so as you can imagine, he wasn't a real newspaper man and while news of the world was still huge in terms of circulation, it was slowly losing ground. And when Maxwell made his move, the newspaper, it ran this like real snobbish,

[00:26:27] xenophobic editorial rebutting him. And here's some of it. This is a British newspaper run by British people. As British as roast beef and Yorkshire pudding, let us keep it that way. And despite all this talk of Britishness though, the Carrs were more than willing to reach out to Murdoch and ask him to save the day. I suppose to the Carrs, Murdoch could be seen as this loyal Commonwealth cousin. And after all, at least Murdoch was Oxford educated.

[00:26:57] So they reckoned that they'd allow Murdoch to put in the money, kill off the Maxwell bid and then leave the Carrs to run the paper. But as has happened throughout his earlier career, the Brits had underestimated Murdoch. And the dynamic of this relationship between them, it played out at breakfast on the morning of October 22nd, 1968, at Carrs Townhouse in Belgravia. So Murdoch walked in and laid his cards on the table. He would buy a stake in the

[00:27:26] business and back Sir William Carr, but Carr had to agree to share executive control. Carr balked. Murdoch pushed back his chair, stood up, walked toward the front door before turning around and giving Carr his ultimatum. He said, I'm here to help you if you want it, but I don't like to waste time on dither. Carr surrendered immediately. Please sit down, Mr. Murdoch. The deal was done by January 1969. And as part of the deal,

[00:27:56] Murdoch promised not to increase his shareholding beyond 40%, and he also promised to keep Sir William as chairman. Now, interestingly, Robert Maxwell warned Carr, that Murdoch would remove him. He said, you will be out before your feet touch the ground, but Carr dismissed the warning and he said to Maxwell, Bob, Rupert is a gentleman. Within a few months of the deal being signed, Murdoch increased his shareholding beyond the promised 40% and he kicked Sir William him out.

[00:28:25] So Murdoch had truly arrived in the UK and he was about to have a huge impact on that country's media and political landscape. And that's where I'm going to leave it for today. Now, it's far too early in Murdoch's career, you know, for me to pass any definitive judgment on him, but we can definitely already see his rootlessness, his duplicity, his willingness to lie, his ambition and also

[00:28:55] his innate sense of how the media business works and how he can leverage it to get what he wants. And he's only just 38. Like, he's only just starting. Like, what a fascinating character and story. And that brings us to listeners' emails and this one comes from Rob, who would love me to do the story of Howard Hughes. It is a brilliant suggestion, Rob, and I do it at some stage. And thanks so much for listening. And remember, if you have any comments,

[00:29:25] any corrections, or any story you'd like me to cover, email me at info at gbspod.com. All the best, folks.