How Rupert Murdoch took over The News

Rupert Murdoch never wanted to be a reporter, explains veteran newspaperman Rodney E Lever, so he started off as a “publisher”.

“There are two sides to every story,” is an age-old mantra and most people know it is true. Indeed, there are multiple sides to every story.

My first editor, Brian Con Penton of the Sydney Daily Telegraph had a simple answer: “Just give me the facts.” And that was his rule.

I was on his reporting staff for the first years of my own newspaper career. When Penton died of cancer, he was replaced by the deputy editor King Watson. King was a nice man; an experienced newspaperman with great skills. What he lacked, however, was an ability to deal with a proprietor with the awesome presence of Douglas Frank Hewson Packer — sometimes known as Bullhorn.

Even Frank Packer had always been a little scared of Brian Penton’s extraordinary intellect and his ability to wring from his editorial staff an enthusiasm for exciting investigations and crisp, accurate writing. These reporters included Patrick Davidson, who caused the closure of the notorious Callan Park lunatic asylum and changed Australia's primitive mental health systems forever; Tom Farrell, who brought about major changes in the criminal legal system and modernised police procedures; and Ronald Monson, who became a national hero after being almost lynched by angry Egyptians with his own necktie in the 1956 Suez Crisis.

Harry Gordon and Peter Bowers were younger top reporters I revered.

After Penton’s death, Frank Packer began to interfere. The paper went into decline. He decided that the staff of Penton’s precious library was too large. He demanded no replacements if anyone left. A similar order went out to the editorial department. Penton’s library and his journalists were at the heart of the paper’s greatness.

Packer’s interests were primarily directed towards the Australian Women’s Weekly and to a passion for sailing. He was principal founder of the annual Sydney to Hobart yacht race. In 1972, he sold the paper to Rupert Murdoch. Great journalism was replaced by political bias, personal opinions, crude invention, laziness, sloppy writing and a weird obsession with scandal in people's private lives.

In 1974, I went to the midweek races at Randwick. Leaving the member's stand after the last race, I followed an old man with a walking stick slowly climbing the steps. When he stumbled, I took his elbow to steady him. He turned around and looked at me with rheumy eyes and said very quietly, “Thank you.” Just one week later, Frank Packer was dead. I don’t think he recognised me as the copy boy who once left inky black fingermarks on his starched white collar.

In 1951, Keith Murdoch appointed Rohan Deakin Rivett as editor of The News in Adelaide. He had purchased through his family company, Cruden Investments, a 30 per cent holding in News Limited, the business name of the The News' publisher. That made the Murdochs the company's principal shareholder. The purchase was significant. It would become the nursery that would launch Rupert Murdoch into the newspaper business.

A year later, Murdoch died suddenly at a crucial moment. His death followed a tense boardroom struggle between himself, as chairman and managing of the Herald and Weekly Times, and the deputy who was to succeed him, Jack Williams.

The Murdochs were not wealthy when Keith died. He owned his home, Cruden Farm, and some rural investment properties and artworks. His lifestyle was augmented by the perks (which were substantial) of his office as head of Australia’s largest newspaper company. He held no HWT shares.

After death duties (death duties to pay for World War II were later rescinded) the family was nearly broke. Keith had been secretly borrowing large amounts of money for a project that was dear to him —ensuring that one day Rupert Murdoch would take his place as chairman and managing director of the Herald and Weekly Times.

Way back in 1933, Keith Murdoch and Theodore Fink had organised the amalgamation of two Brisbane morning newspapers, The Courier and The Mail. The Mail had been owned by the former bookmaker, boxing entrepreneur, Collingwood football club supporter and (some say) underworld figure, John Wren.

Working with Jack Williams, who was finance editor at the HWT and the Herald’s chief financial reporter, Jack Eddy, Murdoch had devised a scheme to prevent any takeover attempt of the Herald and Weekly Times.

They established an interlocking arrangement so all the companies in the group would hold a substantial interest in each other. Any raider would need to buy the group as a whole to be successful. That would deter all but the richest, and be beyond all but a few local investors.

The key to unlocking the whole group was a new issue of Courier-Mail shares, ostensibly to fund a badly needed new office and modern printery on land in Fortitude Valley, Brisbane, and remove the company from its original cramped site in the heart of Brisbane. But within this scheme, there was one way to unlock it. If anyone wanted to take over the group they would need to know that they would first have to buy the Courier-Mail outright.

In the last year of his life, Murdoch was holidaying at the Gold Coast, recuperating from an illness and devoting his time to borrowing frantically from anywhere and everywhere to buy as many of the new shares as he could afford for his family. His inside knowledge gave him an advantage. His letters from the Gold Coast to his secretary in Melbourne tell the story. They are among the 28 boxes of Keith Murdoch's private papers in the National Library of Australia, along with 25 years of angry correspondence with Theodore Fink — mostly arguing about who was supposed to run the company that Fink had owned since 1900.

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Theodore Fink

Jack Williams and the other senior executives were horrified by the prospect of young Rupert running the company. As a student at Geelong Grammar, he would come home for weekends and spend Friday afternoons in the boardroom supposedly doing his homework, but more often arrogantly marching around the building giving to orders to the staff. He was called "the brat."

At the monthly board meeting on Friday, October 14, 1952, Keith Murdoch told his hand-picked board members that he intended to dismiss Jack Williams. Williams was sent for. He left the room saying to Keith Murdoch:

“You will pay for this.”

After the meeting, Murdoch rang Colin Blore Bednall, managing director of the Courier-Mail, and told Bednall that he had been chosen to replace Jack Williams. Then Murdoch had his driver take him home to Cruden Farm, where he spent a pleasant day with his family and read a letter that had just arrived from Rupert at Oxford. That night, he went to bed and died.

His frail heart condition could not survive the tensions of his recent activity. He was 67.

The board met again on the day before the Tuesday funeral and rescinded Jack Williams’ dismissal and appointed him managing director. The board elected a new chairman — John Getty, chairman of the National Bank, the company's bankers.

Sudden deaths turn many lives upside down. Keith Murdoch believed that maturity would change Rupert, and it did; but not in the way Keith had wanted. He intended that Rupert begin as a working journalist and grow through other departments of the paper until he reached an age where he could take on the leading role. He could have personally supervised Rupert’s steady advancement.

Aware of the heart trouble Keith had experienced in recent years, he selected Rohan Rivett to be Rupert’s mentor. Rivett’s appointment as editor of the family-owned The News was essential to his plan. He had wanted Rupert to learn his craft as a reporter at The News.

Two days after Murdoch’s death, Lloyd Dumas drove to Cruden Farm to speak with Dame Elisabeth Murdoch. Dumas was a family friend and a long-time associate of Keith. Dumas had been the founding editor of The Sun-News Pictorial, a morning paper launched with the intention of driving the British-owned paper The Argus out of Melbourne. Now Dumas was also managing director of the Adelaide newspaper The Advertiser, and a member of the HWT board.

The conversation he had with Dame Elisabeth that day became crucial to Rupert’s future. Rupert told me the central facts in at least two separate conversations over lunch. It is reasonable to speculate that Dumas conveyed the sympathy of the board and the management and staff.

Then he would have offered assistance in any financial matters.

Frederick Lloyd Dumas

Rupert told me:

“They stole my inheritance. I could have raised the money in London.”

A boast, perhaps, but Elisabeth Murdoch had a clear head for money matters as well. She had served on many boards in the course of her charitable work. It was Elisabeth's decision to sell the critical shares to the Herald and Weekly Times to meet the debts from their purchase.

Murdoch's death was a major news story in Melbourne. With no Sunday papers, the story was broadcast first through radio stations. The HWT’s own radio station 3DB was the first to break the news. The station’s manager, David Worrall, heard the news on his outer-Melbourne farm and headed for the office to begin planning a special report on Keith Murdoch’s life and times. Before that, he had phoned Jack Williams (not knowing of Williams’ dismissal).

Williams went to the office immediately. There is a legend that he had a company employee use a hard metal drill from the engineering department to force open the private safe in Keith Murdoch’s office. I can only speculate that he was looking for Murdoch's letters to his secretary to show to the board. Further, I can only speculate that he had found the letters and shown them to the board.

Rupert had been contacted by phone in England and was organising a flight to Australia to attend the funeral. England-Australia flights were carried out by slow old Sunderland flying boats, landing at Rose Bay in Sydney. The funeral was well and truly over by the time he got back to Melbourne.

There, from his mother, he learned that she had sold the crucial Courier-Mail shares to the Herald and Weekly Times. Rupert had lost the inheritance that would have started his career at the top of the tree.

Dame Elisabeth had decided that Rupert should start his newspaper career at The News as Keith had intended. But Rupert decided he was not going to start at the bottom. He had tried being a reporter in London. He didn't like being a reporter. He didn't want to be a reporter. They settled on a new title: publisher.