Rupert Murdoch - Battle With Britain

Rupert Murdoch - the most powerful media mogul in the world.

He is accused of dragging Britain's press into the gutter,

of having contempt for the law, and of contaminating our politics

and public life.

That is the conventional view, but let me offer you another.

Think of Rupert Murdoch as an agent of change

that struggling post-war Britain urgently needed

and whose impact has been little short of revolutionary.

This programme contains some strong language

He did absolutely come in thinking, "We're going to shake this place up."

"No," said Murdoch. "Give 'em what they want, the public will decide.

Always the outsider.

He'd come in and he had this powerful position.

But he didn't feel part of it, he felt like a not wanted alien.

He was like a Martian in our society.

A ruthless industrial radical.

I think what he did at Wapping was a masterpiece.

Rupert Murdoch comes along and liberates the entire British press.

-That's a single achievement.

-He was showing this establishment,

whether it was the trade union or Fleet Street establishment,

that he could do it and he was going to deliver.

And above all, a gambler.

He said, "I'm sitting here with a cheque for 350 million.

"Andrew will come round with it now,

"if you will agree now to the output deal."

He makes a big bet...

and then he goes all in on the bet, all in on the bet, right.

By embracing the changes he delivered,

we made him rich and powerful.

And then, a crisis,

so serious that it threatened to destroy everything he had built.

Rupert Murdoch, will you tell us what percentage...

This is the story of Rupert Murdoch's

40-year battle with Britain.

It's the 1930s.

The only son of a wealthy Australian family is growing up in Melbourne.

The boy's name is Keith Rupert Murdoch.

His father is Sir Keith, knighted for services to journalism.

He became famous for exposing the Gallipoli scandal,

the loss of thousands of young Australians

during the First World War

at the behest of "incompetent British commanders".

The Murdochs are Australian aristocracy

with a characteristic dose of antagonism to the old country.

Rupert is sent to Geelong Grammar, Australia's Eton

and delights his father by obtaining a place at Oxford University.

It will be his first encounter with Britain.

What he finds there

will shape his attitude to this country for ever.

In October 1950, Rupert Murdoch arrived in Oxford,

right in the heart of chilly post-war, ration book Britain.

It must have looked a grim prospect for a young Australian

coming all the way from sunny Melbourne.

He has come to Worcester College

to study politics, philosophy and economics.

Peter Grosvenor was a fellow student.

He was an ambitious would-be politician

in the Oxford University Labour Club.

He was an absolute dyed-in-the-wool socialist

and he had a bust of Lenin in his study, which was incredible.

Murdoch stuck out here, partly because he had a car,

almost unheard of for undergraduates of the time,

but mainly because he refused to play by the rules.

This is how the university magazine, The Cherwell, described him -

"Rupert Murdoch, cataclysmic chauffeur from the outback.

"He is known as a brilliant betting man

"with that individual Billingsgate touch."

Ouch!

Almost everything about this place, its tradition, its formality,

reeked of old establishment Britain,

none of which appears to have impressed the young Rupert.

He wrote home to a friend Down Under -

"Oh, for the bloody sun!

"If it weren't for good friends, I'd have shot myself

"in this bloody place long ago.

"Rain, wind, sleet, slush, shit, snow...

"and starch."

In any event, it's pretty clear that many people here

saw Rupert Murdoch almost exactly as he saw himself -

as a rebel and an outsider from the very start.

At the beginning of Rupert's final year at Oxford,

his father, Sir Keith, died.

But he'd made one last arrangement to complete his son's education -

a spell at Lord Beaverbrook's top-selling Daily Express.

In three years, Rupert Murdoch learned a lot

about post-war Britain and its privileged elite.

He'd arrived, remember, as the son of a wealthy Australian media baron

and been treated like a colonial upstart.

In three months here, at the Daily Express,

he learned how to produce a newspaper

capable of selling four million copies a day.

In 1953, aged 22, he went back to Australia

to claim his inheritance from his father, his own first newspaper.

But although Sir Keith was the most prominent figure

in Australian journalism, the only newspaper he was able to bequeath

to his son was a small afternoon tabloid, the Adelaide News.

This taught Rupert Murdoch a lesson he would never forget.

Ownership and control were more important than public standing,

and so he began building an empire.

And as he did so, Rupert Murdoch developed a formula for success.

First, snap up a failing newspaper,

shamelessly popularise it with irreverence and sensation,

and a no-holds-barred approach to eye-catching scoops.

A photographer famously disguised himself as a doctor

to get this picture of singer Marianne Faithfull unconscious

after a drug overdose.

By 1968, Rupert Murdoch was a force to be reckoned with.

He owned five newspapers, including The Australian,

that country's only national daily, and two TV stations.

Do you think it's possible people have underestimated you?

Yes, I think so.

They had it pretty easy themselves in what they were doing,

they were doing well, and they didn't see these opportunities,

because they weren't looking for them

and when someone else found them,

they still couldn't believe the opportunities were really there.

He'd also acquired a reputation for ruthlessness.

You don't realise, that there's a great deal of iron

behind the boyish exterior.

He's a very tough proprietor who, I think, sacked more journalists

than I think I'd ever seen sacked before in my whole career.

He's a tremendous sacker but, of course,

he's also a tremendous hirer.

So, he's always sacking them and hiring them!

Rupert Murdoch had become a prominent national figure

in the Australian media, and yet in Britain,

he was still virtually unknown.

But all that was about to change.

The Rupert Murdoch we've come to know was made in Australia.

He knows what people want and he sets out to give it to them.

He's fiercely ambitious, finding and then gambling on opportunities

others simply don't see, which he then pursues

with a ruthlessness that shocks even fellow newspaper men.

Then the chance to expand to the old country drops into his lap.

The British press establishment has no idea what's about to hit them.

The News of the World belonged to the Carr family.

They were pillars of the British establishment

and had owned the paper since 1891.

It was the biggest newspaper in the world,

but Sir William Carr, the then Chairman

treated it as the family grocery shop, basically.

Sir William was a great connoisseur of Scotch whisky,

never less than two bottles a day.

He and the top executives used to go every day to The Savoy Grill for lunch.

There was a joke it was the office canteen.

I think they'd become over-confident, and arrogant,

and they didn't realise that only owning 30% of the shares,

didn't actually give them control.

And then in 1968,

the Carrs discovered to their horror that a young publisher

called Robert Maxwell was preparing a hostile takeover of THEIR newspaper.

Maxwell wasn't actually his name, he was a Czech called Jan Ludwig Hoch

and they weren't going to let it fall into the hands of a foreigner.

Ironically, of course, it ended up with another foreigner,

Rupert Murdoch.

Murdoch arrived in London and offered the Carrs a way

to keep the paper out of Maxwell's hands by allowing him in.

All he asked for in return was to be made managing director.

So, when Rupert Murdoch arrived

-with a slightly more ruthless business sense...

-Absolutely, yeah.

..they were wide open for him?

Oh, absolutely yes, they were lying there with their legs wide open

waiting to be screwed, I think, basically.

At an emergency shareholders' meeting,

Sir William gave Rupert Murdoch his personal backing.

Thank you very much.

And to Maxwell's fury, his bid was thrown out.

There's been a lot of acrimony throughout the stages of this takeover bid.

-We've never said anything personal...

-Hasn't it developed...

Yesterday, Mr Maxwell called me a moth-eaten kangaroo! Well,

we haven't got quite to that stage!

Sir William had saved his paper from Maxwell,

but ended up handing it over to Murdoch.

Within a few months, Carr was shunted upstairs

to become Life President and Rupert Murdoch took control

of the biggest-selling English-language newspaper

in the world. He was just 38 years old.

He is like a breath of fresh air, in this building,

in Fleet Street, in the printing industry,

and by Christ, it's long overdue.

He's a gambler, an inveterate gambler.

He's a good Australian businessman, who's come here

and is going to show you how to do it.

Just as he had done in Australia,

Murdoch immediately set about finding a dramatic scoop

to boost sales of his new paper and he soon got one.

'They tried to keep this girl's name secret,

'but suddenly everyone knew it

'Christine Keeler, the girl who sparked off a drama

'of government scandal, spying, intrigue and even death.'

In the summer of 1969, Murdoch paid Christine Keeler

£21,000 for the exclusive rights to publish her memoirs.

Keeler had been the call girl at the centre of a political sex scandal

that had forced the resignation of John Profumo,

the then Minister for War, some six years earlier.

We've got to lead with it and this is some tremendous news.

We should take the offensive about this and this controversy

and if it keeps it boiling for six weeks, so much the better.

Although it wasn't strictly new,

the story had all the ingredients of a classic Murdoch headline grabber.

Do you read a Sunday paper regularly?

Well, I read all the scandal in the News of the World.

What do you like particularly about the News of the World?

Well, all the scandal.

Who's doing someone's old woman and all that.

But what Murdoch DIDN'T anticipate

was the outrage the story provoked in polite society,

who looked on it as shameless muckraking.

You said, "People can sneer as much as they like,

"but I'll take the 150,000 copies we're going to sell."

It suggests that you are, in fact, lining your pocket

with rather sleazy material.

Well, I don't agree it's sleazy, for a minute.

Even Murdoch's Australian wife, Anna was drawn into the controversy.

-Do you read the News of the World?

-Yes, every Sunday.

-What do you think of it?

-It's very good.

But it doesn't upset you at all, it doesn't worry you...

-Why should it?

-..that it's that kind of paper?

I'm very proud it, I think that's a very pretentious thing to say.

The Keeler memoirs story defined the battle lines

between Rupert Murdoch and the British liberal establishment.

Where he saw an important story, but above all

a great commercial opportunity,

all they could see was a sorry tale of a scandal rehashed,

dredged up unnecessarily by an uncultured grasping colonial,

a man for whom no gutter could be too deep.

The satirical magazine, Private Eye, summed it up.

They dubbed him "The Dirty Digger,"

a name, incidentally, which has stayed with him ever since.

In just a matter of weeks, Rupert Murdoch had gone

from virtually unknown to beneath contempt.

But none of this seems to have bothered Rupert Murdoch.

He was already looking to apply his mass-market formula

on a bigger scale - a national daily paper.

All he needed was the opportunity to buy one.

The Sun had been a trade union paper,

but it had lost £12 million in five years

and its owners, IPC, were ready to sell.

Murdoch bought it for less than £1 million

and immediately began reinventing The Sun as a mass-market tabloid.

He knew what he wanted in a vague way.

He wanted this paper to steal the clothes of the Daily Mirror,

but improve them. In other words, be more irreverent than the Mirror,

saucier than the Mirror, more of an iconoclast.

The Daily Mirror had been Britain's best-selling tabloid

for three decades but, in common with the rest of Fleet Street,

no-one seemed to have noticed that a transformation

was going on around them.

The sexual revolution of the '60s had gone mainstream

and the Mirror's working-class readership

was looking for something more in tune with the times.

'Murdoch came here at a time of immense social change

'in the whole character of the country, and I think'

he seized that moment,

realised that people just didn't want interesting news

and journalism and pontification about politics.

They wanted something simpler, clear to understand, popular,

even, perhaps even crude.

At the end of the first week, The Sun published a manifesto

aimed straight at the Mirror and its traditional readers.

"The Sun has no party politics. The Sun is a radical newspaper.

"We are not going to bow to the Establishment

"in any of its privileged enclaves. Ever."

Murdoch saw the Mirror as elitist,

that it had gone middle class, that it was telling people

what it, editors, thought they should have. It was educative.

"No." said Murdoch. "Give them what they want - the public will decide.

"The best example of democracy is to be found in the market."

The Sun reflected the ambitions of ordinary people,

and we were cheerful, and if this was a pub,

this was a pub, right,

we'd be in the corner laughing, probably with blokes,

probably with blokes about football or sex,

and over at the other end of the bar

there'd be some old bloody codger there,

rolling up their woodbines, you know, "disgraceful world" and all that,

and that would be a Daily Mirror reader.

So it was quite simple - one was youthful, vibrant, not over-educated

but not stupid, and this one here was dying, and that's what happened.

And if there's a single feature of The Sun that most clearly embodies

its populist, upfront character, it must be Page Three, introduced

in its full, topless glory, on the paper's first birthday in 1970.

But it was only the most prominent example of how Murdoch's Sun

gave its readers what THEY wanted.

What Murdoch understood was how to push the boundaries

that little bit further, understanding what people wanted,

but at the same time not insulting them,

and in no way going further than they really wished to themselves.

Murdoch had taken over a failing paper, selling less than 700,000 copies.

Within a hundred days, he'd doubled it.

Every day the circulation would go up!

I mean, literally, lead on "Nun runs off with rhino," and boom, up it goes,

and then boom up it goes the following day. It was incredible!

I didn't know anything about Rupert Murdoch to be honest with you,

but there was a sense that there was a higher being somewhere

who could create success.

Readers might have warmed to Rupert Murdoch's newspapers

but London society viewed him with considerable suspicion,

not least because he seemed to relish

exposing the salacious details of their private lives.

Rupert and his wife, Anna, were effectively ostracised.

But it's telling that when he was invited to a social event,

he went to some lengths to try to fit in.

One such occasion was a shooting party,

where Murdoch met journalist and writer Chapman Pincher.

Well, we were shooting at Ramsbury Manor, where I was a regular gun,

and I arrived one day to see one of the guests was none other than Rupert Murdoch.

I noticed right away that he was wearing

an absolutely brand-new dark brown shooting knickerbocker suit.

I also was pretty confident, when I looked, that his gun was brand-new.

He didn't hit a thing. I felt rather sorry for him.

Not one?

Not one, no. Not a thing. Didn't disturb a feather, as we used to say.

But by the end of the day, he was knocking a few down...

..sufficiently to impress me into thinking he's the sort of chap

who could do whatever he wanted to do.

Do you remember what you talked about during the shoot?

Well, one of the things he said to me, which of course I can never forget,

was he complained about the snobbishness of the people

in this country, especially towards his Australian wife.

And he even went so far as to say he was thinking of moving to America because of it.

But it wasn't only English snobbery

that had left Anna feeling deeply unsettled.

In December 1969, the wife of Alick McKay,

one of Rupert's executives in London, was abducted.

It was a case of mistaken identity.

The kidnappers thought they had Anna Murdoch.

When they realised their mistake, they murdered Mrs McKay.

Her killers were caught and convicted,

but Muriel McKay's body was never found.

-You were the intended target for the kidnappers?

-Yes.

That must have been a nightmare.

It wasn't so bad for us as it was for Alick McKay,

but certainly one has to think about it,

and it coloured my time there in Britain after that happened.

And so, in 1974, Rupert, Anna and the family - now three children - moved to New York.

This was Rupert Murdoch's land of greatest opportunity.

A vast English-speaking media market

in a society where status is measured by wealth, not birthright.

The outsider had finally found an elite he wanted to belong to,

and a place where he could really do business.

By 1976, Rupert Murdoch had found himself a struggling tabloid newspaper,

the New York Post, which he set about transforming in typical Murdoch fashion.

All very familiar.

Less familiar though, unlike its counterparts in Australia and Britain,

this one never really worked, culturally or commercially.

But it was the beginning of something which did, big time.

From his new headquarters in New York, Murdoch would spend

the next 30 years building a global multimedia empire -

the 60-billion News Corporation.

In the 1970s, however, all that lay in the future.

Meanwhile, back in the old country, politics was Murdoch's new frontier.

The Sun had become Britain's best-selling daily,

and it had stayed true to its anti-establishment agenda.

It had campaigned for the abolition of the honours system,

and it had no fixed political allegiances.

And that was going to thrust The Sun into the frontline

of the election campaign of 1979,

being fought in a climate of economic misery

and industrial unrest.

Cometh the hour, cometh the woman. Margaret Thatcher represented

the radical approach to Britain's woes - all music to Rupert Murdoch's

ears, especially as his newspapers' readers were her principal target

voters - skilled manual workers,

otherwise known in the jargon as C1s and C2s.

A key figure on the Thatcher campaign team

was Tim, now Lord, Bell.

Was The Sun more important to you than any other newspaper?

Yes, because it had a very big C1, C2 readership.

Um, people call it now "the white van man", but I mean that's exactly

the kind of people that read it, and importantly, from our point

of view, because it had been a trade union paper,

it still had a huge amount of trade unionists who read it

and, therefore, we were talking actually to the people

who were causing all the trouble at the time.

'Trevor Kavanagh joined The Sun in 1978

'and went on to be the paper's political editor.'

I think our readers were seen as their natural voters,

the aspirational working class.

So, yes, it was a natural relationship which was

also compounded by the fact that Margaret Thatcher shared, I think,

Mr Murdoch's view, which was that we should be going for low taxes,

small government, strong defence, all the things that the

Conservative Party under Margaret Thatcher espoused as well.

Rupert Murdoch is fond of saying that

if politicians want to know what he thinks, they should read The Sun.

In which case, take note of what the paper's editor, Larry Lamb,

had to say in 1979.

There was no point at which we consciously decided

we would support the Tories, it's just that we found

ourselves, on a series of issues over a long period, more inclined

to be in sympathy with the Tory point of view.

On election day, Larry Lamb published a 1,700-word front page

editorial advising readers to vote Tory this time.

Now, whether any of them will have read it,

and certainly all of it, seems unlikely - and nor, of course,

is there any reason to think that many of them

would actually have voted Tory just because The Sun told them to.

But the paper was onto something.

Over months, the tone of its coverage caught the public mood

and amplified it in a 140-point bold type.

Headlines like, "Crisis? What Crisis?"

captured perfectly the sense of ineptitude that dogged

the Labour government as waves of strikes tipped

the balance of popular opinion in favour of change.

And the rest, as they say, is history.

It was the first time the Murdoch Sun, the floating voter,

had backed an election winner.

From this point on, Murdoch

and Thatcher are inextricably linked, and The Sun's role

as a vital ingredient to electoral success

passes into political orthodoxy.

'Mrs Thatcher being applauded by Tory party workers...'

And, as if to confirm it, in the next New Year's Honours List -

Mrs Thatcher's first - was a knighthood for The Sun's editor,

who Private Eye magazine instantly dubbed, "Sir Larrold Lamb."

Rupert Murdoch, though, did not approve.

He, at least, still believed in his own paper's conviction

that honours were a farce.

Rupert genuinely thought that Larry shouldn't have accepted

a knighthood and I don't think he made any secret of it at all.

I think it enraged him that, when he rang Larry's office, Larry's

secretary had been instructed to say "Sir Larry Lamb's office."

He didn't like it,

he didn't think titles were what journalists should get.

The knighthood was Sir Larry's swansong.

The following year, Rupert Murdoch replaced him

with Kelvin MacKenzie, a 34-year-old former sub-editor

with only a single O Level to his name.

And although Rupert Murdoch was now more usually in New York,

he still kept a very close eye on his favourite newspaper.

-'He would call me up once a day.

-Every day?'

Yeah, every day, and at home, and everything.

I remember he called me up once at home and I think

I was in the middle of having a row with my wife, so

I picked up the phone grumpily and it was him. So he says,

"How's it all going?"

I said, "Not very fucking well, actually,

"I'm in the middle of a fucking row here,"

and he said, "Hm, I'll call you later," and put the phone down!

Under Kelvin MacKenzie, The Sun reached new heights

of sensationalism, with more ferocious headlines,

lashings of sex and, of course, bigger boobs.

Did he ever disapprove of anything you did?

Yes, he did. He thought we went too far down market.

He used to say things like,

"Do you ever think of anything above the waist, you know?

"I'm sick and tired of it." And, you know, all the sex and everything.

Meanwhile, having backed her in 1979, The Sun not only stuck

with its heroine, it became her most strident supporter,

so much so that the suspicion that Murdoch

and Thatcher had forged an actual political alliance really

took hold. And that seemed to be confirmed by what Murdoch did next.

In October 1980, The Times and its sister paper

The Sunday Times were put on the market.

It became the most controversial newspaper sale in modern

British history, and is widely regarded as a stitch-up - damning

evidence of Murdoch's sinister influence in the corridors of power.

It's a story which has been the subject of concerted secrecy -

not only concerted secrecy, but lies.

And in 2012, these suspicions were reignited

by the revelation that Rupert Murdoch had met Mrs Thatcher

in secret, in 1981,

while negotiations over the sale were still in progress.

Harry Evans was then editor of The Sunday Times.

Why was one bidder given private access?

Why, secondly, was the note of that private access

withheld from the public? You're dealing with people who

prefer things not to be in... suffer the disinfectant of sunlight.

But any suggestion of a secret deal is disputed by many of those

directly involved.

In 1980, Times newspapers had only just got over a year-long strike

that cost the owners, the Thomson family, £40 million.

They were determined to sell, and if no buyer could be found,

were ready to shut both papers, with the loss of 4,000 jobs.

'Sir Gordon Brunton was then managing director of Thomson,

'and he had the job of finding a buyer.'

To me, the absolute prime objective was the survival of The Times.

The Sunday Times,

with reasonable production, could have been highly profitable,

but The Times was losing a great deal of money.

I was absolutely convinced that the way to ensure the survival

of The Times was to sell Times newspapers together,

Sunday Times and The Times.

Of all the potential bidders, only Rupert Murdoch was fully

committed to keeping both papers going.

But what really alarmed the liberal media establishment was

the possibility that the crown jewels of British journalism

would fall into the hands of the "Dirty Digger" -

Fleet Street's most ardent Thatcherite.

What about the political side of this?

When you're choosing an editor, for instance,

would you want his political views to be your political views,

broadly of the right?

I don't know that my views are all so right wing as they're said to be.

-Are they not?

-No.

-Are you not a supporter of Mrs Thatcher?

Yes, I think Mrs Thatcher is more right than wrong, but I'm not a Tory.

Harry Evans had put together a bid, but only for The Sunday Times.

He was frustrated that it was so swiftly dismissed.

Gordon Brunton was very opposed to our buying The Sunday Times.

His argument to me about that

was that that was because he was determined to save The Times.

As far as he could see,

if he didn't keep them together, there was no chance.

Well, that's a fair point, it's a fair point.

Well, that was his argument.

Evans has since been amongst the harshest critics

of the Murdoch takeover.

But, according to evidence we have seen, that wasn't always the case.

I've got a letter here from Harry Evans, shall I read it to you?

Please.

"Dear Gordon, we at The Sunday Times prefer to be independent

"and regard our consortium as a viable proposition for that

"title, but it does not include The Times,

"and I've therefore taken soundings amongst my staff

"between the corporate bidders

"represented by the most frequently mentioned names.

"It is Murdoch that is preferred by a wide margin...

"..and I myself would choose Murdoch."

I mean, history has it that you were an implacable opponent

of the Murdoch bid, but Gordon Brunton says,

by the time we got to this point,

Harry Evans was... That this was his preferred bid. He's right.

-No, he's not.

-That's what this says.

-No, I know what he's saying.

-That's what the letter said.

-The letter doesn't say that,

you have to put the letter in the context.

It's like saying to a man who's facing an execution squad,

"Would you prefer to be poisoned or shot?" All right?

And secondly, none of us

thought he would get through the monopolies commission.

By law, all newspaper sales had to be referred to the MMC,

that's the Monopolies and Mergers Commission, unless, that is,

the papers involved were not, in commercial terms, going concerns.

The cabinet minister who had to decide was John Biffen,

and conventional wisdom has it in some quarters

that Mrs Thatcher lent on John Biffen to persuade him to allow

her friend Rupert Murdoch's bid to go through without an MMC referral.

But because the Thomson company's accounts showed both papers were

losing money, Biffen was perfectly entitled to let the deal go

through without delay,

which is what Thomson above all wanted.

Did you say to the minister, "If you refer this,

"the likelihood is we will close the newspapers"?

Absolutely, absolutely.

But what about that meeting between Murdoch

and Thatcher kept secret for more than 30 years?

Well, the minutes do record Murdoch stating his case, but there's

nothing to suggest that any favours were asked for or promised.

Of course, it's impossible to say for certain

that there was no secret deal. There's no evidence for one,

but for a secret deal to be secret, that's perhaps not surprising.

We don't know whether, at some point,

Rupert Murdoch didn't have a word in Mrs Thatcher's ear

to seal the deal and avoid the monopolies commission.

But the critical fact is there's no need for a political conspiracy

to explain how and why John Biffen made the decision he did.

And so it was, just a few weeks before his 50th birthday,

Rupert Murdoch became the new owner of Times Newspapers.

The undistinguished Oxford graduate with the Billingsgate touch

had beaten the British establishment again.

And the one part of this story that is beyond dispute is that

Rupert Murdoch has kept The Times going, as he said he would,

for over 30 years, in spite of the fact that,

contrary to his original expectations, it still loses money.

But back to that "secret meeting" in 1981,

because there is a significant detail in these minutes

which shows that in one area, at least, Mrs Thatcher

and Rupert Murdoch were on exactly the same political wavelength.

They record Rupert Murdoch telling Mrs Thatcher that he intends

to tackle the historic problem of over-manning in Fleet Street

by introducing new technology.

She agrees it's a move long overdue.

And it was a move that would see Murdoch risk everything

he had built, because it would involve taking on another

traditional vested interest - one which, up until now, he had

been on good terms with - Fleet Street's all-powerful print unions.

JOURNALIST: 'The scenes outside News International's print plant

'at Wapping last night were reminiscent of the miners' strike.'

Winter, 1986.

These were the regular scenes at Wapping in east London -

the location of Rupert Murdoch's new computerised print works.

The plant had been built and equipped using the cover story

that it would produce a new London paper,

but as soon as it was ready, Murdoch moved all his titles in overnight.

The print workers called a strike, Murdoch sacked them en masse.

Many, like Terry Smith, had worked on The Sun from the beginning.

This was our baby, we got it off the ground,

we polished it, we gave him the actual means of building an empire.

So there was a sense of betrayal?

Oh, absolutely, absolutely.

And when he came down here in his limousine,

and we were on picket duty over the side there,

he'd hide beneath the seat, you could just about see the top of his head.

He didn't have the guts to look at us straight in the face.

Wapping reignited the powerful suspicion that Murdoch had

again conspired with Mrs Thatcher.

This time, to smash another of Britain's powerful trades unions.

I was aware that Rupert Murdoch

and Margaret Thatcher were soul mates, but I wasn't aware that

the relationship was that close. He did see her over Wapping.

He said he'd squared it, that the Prime Minister was good.

In the words that she put it,

"I will make sure that there are enough police available

"for you to go about your lawful business on the Queen's highways."

Brenda, now Baroness, Dean was leader of the print union SOGAT.

The conduct of the Met Police was appalling during that dispute.

Do you think that had a political dimension to it?

Yes, I do, I do.

Mrs Thatcher had had this dispute through the coal board with

the miners and it was always regarded in Britain,

the two big strong areas for trade unionism were the miners

and the print workers in Fleet Street, and if she could break

both of those, then she'd break the trade union movement.

Behind the barbed wire at Wapping, Murdoch was trying to do something

that had never been attempted before -

to produce four million newspapers a night, and distribute them,

without the traditional print unions.

It was a risk that no-one else in Fleet Street

had ever been willing to take.

If Wapping had gone wrong, Rupert Murdoch was finished in Britain -

we used to joke that we'd all have to leave,

that a helicopter would have to land on the roof at Wapping

like the last days of Saigon.

Was Murdoch much in evidence during the dispute?

Yes, you'd find him down on the boards as they were called,

where we used to in those days still paste up the pages,

and I remember one time

I saw this apparently old guy crouched over,

a grey jumper on, sticking down really, really slowly a story

and I, I said to him, "For God's sake,

"if we're going to get this paper out, can't you hurry?"

I think I actually used an expletive, and the figure turned around,

and it was Rupert and he went, "I'm doing my best, Roy."

I remember within a week, two weeks of the dispute starting,

there was a television programme that Murdoch was invited to take

part in and so was I, and Bruce Matthews, his UK chief executive,

said to me, "He's on a high, Brenda. He's loving producing the paper,

"he's down there every night

"watching the papers come off the press."

The company were actively recruiting people whilst

we were actually negotiating with Mr Murdoch's management.

What do you think I am?

Of course! You were threatening strikes.

I mean, I'm entitled to make...

But what kind of an employer, Mr Murdoch, actually recruits

a parallel workforce and sacks the workforce that has worked for him...

I didn't sack it, you walked out. You took them out, Miss Dean.

He was showing this establishment,

whether it was the trade union establishment or Fleet Street

establishment, that he could do it and he was going to deliver.

Murdoch had planned the move to Wapping like a military operation,

and victory brought huge benefits.

His UK profits that year went up by 85% to over £34 million.

The print unions were broken, and where Murdoch went,

other proprietors swiftly followed.

I think Murdoch's moonlight flip to Wapping was the major

transformative moment in the history of printed newspapers

in Britain. You've got to imagine that, by the mid-'80s,

all these papers with these vast staffs were still making profits,

but my view is that if they'd hit the recession in 1990 without

having shed their printing staffs, which they did totally because

of what Rupert Murdoch did, then many of them would have gone to the wall.

By now, Murdoch had taken on the old press owners,

the liberal establishment and the trade unions,

and he owned the best-selling daily and Sunday tabloids,

as well the world's best known title, The London Times.

So, where next?

Broadcasting, and the biggest gamble of Rupert Murdoch's career.

On 25th August, 1989,

Janet Street-Porter stepped out onto the stage at the Edinburgh

Television Festival to introduce that year's keynote speaker.

Do you remember doing this?

Yeah, I remember being really nervous.

You look nervous.

'I'd just like to give you a few words about this year's theme,

'which is new television.'

And what was it that got you to invite Rupert Murdoch?

I thought, this is a very prestigious lecture,

I want to ruffle a few feathers.

I want to stir the shit up.

Because he was regarded as the devil incarnate.

I'd be grateful if you'd welcome the fourteenth MacTaggart lecturer,

Rupert Murdoch.

Murdoch had come to the heart of the British television industry

to tell them that change was coming - and he was going to deliver it.

The new age of television offers untold opportunities for those

equipped to grasp the future.

He's at his best when he sees a lazy, self-satisfied, established

interest like the print unions or like the BBC-ITV duopoly that

rubbed each other's backs and told them they were both

the best in the world. Kind of when he sees that, that's

when he's at his most dangerous and when he's at his most visionary.

Much of what passes for quality on British television really is

no more than a reflection of the values of the narrow elite

which controls it. The socially mobile are portrayed as uncaring,

businessmen as crooks, money-making is to be despised.

As a result, in the values it exudes, British television has been

an integral part in the British disease.

So, as it unfolded, what are you thinking?

I'm looking down at all these male executives sitting in rows

looking totally stone-faced.

Those who would prefer the past will find the world leaving them behind.

And how did they react?

Er, like matron was dishing out enemas.

Thank you.

APPLAUSE

Murdoch's weapon of choice was the new technology of satellite TV,

which would be beyond the reach of UK regulators.

Satellites don't recognise borders, so the best way to get into

UK broadcasting was just beam some programming

into the UK and provide increased consumer choice. That's how you get

somewhere - you don't get anywhere by playing by the old boy rules.

Sky had begun as a single channel on a communications satellite showing

American repeats, but in 1988,

Murdoch began planning a new multi-channel service,

and appointed Andrew Neil to get it off the ground.

The idea was we do a news channel, sports channel,

a movie channel and the entertainment channel.

I'd always believed in multi-channel TV, and here was a chance to do it,

but when I got there and looked - my goodness, it was a complete mess.

By the end of 1988, Sky had already cost Rupert Murdoch £120 million

and the new satellite he needed hadn't even been launched.

On the night the rocket went up,

he kept on calling me to find out if the rocket had gone up.

I told him that there was bad cloud, it was delayed. He called, and

I said, "Look, Rupert, I've a hotline to French Guiana.

"The moment I know, you'll know - could you just leave me alone?"

And he said, "I will. I'm sorry for calling you."

He said, "You know, I'm betting the company on this, Andrew.

"If this satellite doesn't go up, we're finished."

ALL: Five, four, three, two, one, go!

Good evening, you're watching...

Sky went on air on February 5th, 1989.

..Ten Britons have agreed to sell their kidneys for cash...

Meanwhile, back in enemy HQ...

Well, joining us now direct from Sky Television's headquarters is

John O'Loan who's Head of News at Sky.

-Good morning.

-Good morning.

What's your estimate of how many people watched last night?

In the newsroom, I think there were about 250.

Now, Mr Murdoch, I see,

is quoted as saying this will raise the standards of the BBC and ITN.

He can't be serious?

John O'Loan had worked for Rupert Murdoch in Australia before

he was recruited to be Head of News at Sky.

Did you see yourselves as outsiders in a kind of hostile environment?

Not only did we see ourselves like that,

we were given every reason to believe it. Yes.

How do you mean?

The kind of news conferences we couldn't attend,

the kind of pools we were barred from,

the reporting on Parliament that, in television terms,

we were barred from... People would have preferred if we didn't succeed.

The other challenge to Sky was more direct.

British Satellite Broadcasting, BSB, was a regulator-approved

service owned by a consortium of media companies,

AKA the broadcasting establishment.

We're going, let's call it, loosely, the quality route, and I think,

you know, they're going more of a brash, News-Of-The-World/Sun route.

The two broadcasters were now locked in a battle to attract paying

customers and that meant spending millions,

principally on Hollywood movies.

It was the kind of fight made for Rupert Murdoch.

One of the things you have to realise with Rupert Murdoch

is he lives for the deal. He's the buccaneer deal maker,

and he does it big time. I had flown over to Los Angeles, we sat

in his office there, and Rupert called the head of Paramount.

He said, "I'm sitting here with a cheque for 350 million.

"Andrew will come round with it now if you will agree now to the output deal."

That's how he did it. 350 million in 1989 prices -

you're talking about closer to a billion today.

So he thought big, and he loved the deal making.

But by the autumn of 1990, Sky still had only 750,000 subscribers

and despite a massive advertising campaign, BSB had just 110,000.

Both sides were haemorrhaging cash.

£2 million a week at Sky and £8 million a week at BSB.

Could you really afford to have lost £500 million,

cumulatively, say, and then just walk away?

That would be the only thing to do. If you could still walk!

This is what I've called the billion pound bet.

The idea of putting all this money behind a pay-TV platform in the UK

was a huge, risky enterprise. He was having to effectively subsidise

the Sky operations through his newspaper operations, which in the

UK at that point were profitable,

and he was having to really look at his whole global empire,

which was terribly leveraged, lots and lots of debt.

And then, suddenly, in 1990, the billion pound bet - indeed,

the whole of News Corporation - came very close to collapse.

Rupert Murdoch found himself exposed to the harsh

chill of financial reality.

By now, News Corporation had grown into a global network of hundreds

of companies that owed money to 146 separate financial institutions.

The News Corp debt burden had grown to close to 8 billion.

Now, when the recession struck, in 1990, that debt burden was

going to bring the company that close to collapse.

Everything Rupert Murdoch had ever worked for was right on the edge -

so much so that, as part of the rescue effort,

even the family's own personal apartment,

here in New York, was put up for mortgage.

Murdoch's hand was forced by his bankers.

Stop the enormous losses at Sky or face foreclosure and bankruptcy.

He had no choice but to agree to a merger

with his establishment rival, BSB.

Rupert had no money.

And the BSB shareholders did have money,

but they didn't want to spend any more of it just on BSB.

And the best thing to do was to merge the two companies.

And they agreed that Rupert had to run it.

Although he retained management control,

the merger broke one of Murdoch's golden rules -

he was no longer the sole owner of the company.

Nevertheless, under his leadership, BSkyB, as it became,

climbed into profit on the back of Premier League soccer

as well as Hollywood movies.

It now offers more than 500 channels and generates revenues and profits

that dwarf the rest of UK commercial television put together.

There is no other way to characterise the last 15 or 20 years

in the UK, other than to say that Rupert Murdoch

precisely knew what he was doing when he created Sky television.

Rupert Murdoch said there was an appetite for pay TV, there was

an appetite for different kinds of programmes to what existed

already in the UK,

and there are ten million reasons to believe today that he was right

because there are ten million homes paying Sky for their television.

And it's in the course of the last 20 years,

as Rupert Murdoch became one of the most powerful media figures

in the world, that, back in Britain, the seeds of his eventual undoing

would be sown. And that story starts back in the realm of politics.

The Sun's savage ridiculing of Labour leader Neil Kinnock

during the 1992 general election and its claim to have won it

for John Major made an indelible impression

on an ambitious young politician.

For as long as Tony Blair had been an MP,

his party had regarded Rupert Murdoch

and his organisation with utter contempt.

But by the mid-1990s, Tony Blair was rebuilding Labour

and set out to build bridges with Rupert Murdoch.

Why? Because no Murdoch meant no Sun, and no Sun meant no

New Labour victory - or so Blair and his associates thought.

Which is why he ended up here.

'Just a few months after becoming Labour leader in 1994,

'Tony Blair sat down in this restaurant

'in London's Belgravia for a private dinner with Rupert Murdoch.'

It was the first time the two men had met,

but they quickly found common cause, both seeing

themselves as radicals impatient with the ways of Old Britain.

The country was ripe for major political change again

and Murdoch had found his man.

It was a relationship which would have ramifications

for years to come, starting with this

headline in The Sun in the run up to the 1997 election.

There is no question in my mind that the relationship

between Mr Murdoch and Mr Blair and then

between Mr Murdoch and Mr Brown was far closer, far more intensive,

than it ever was between Rupert Murdoch and Margaret Thatcher.

The relationship was much deeper and involved many more people

than Rupert Murdoch, he was simply the top of it.

There were at any one time 20 to 25 people on each side, government

and News International, deeply involved in an intermeshed,

close, deep relationship.

The blurring of boundaries that started with New Labour continued

with David Cameron, as he became, if anything, even closer to

Murdoch's key lieutenant, and the central figure in all these

relationships, Rebekah Brooks - the apple of Rupert Murdoch's eye.

She had been editor of the News of the World, then The Sun,

and, finally, chief executive of News International.

Do you think the company did become too engaged?

Yes, I do think it became too engaged with politicians personally.

I think that...

As I say, I think that politicians should be

dealt with at arm's length, otherwise you get inveigled

into the position where... Because they're extremely skilful at this,

flattery is a powerful and potent weapon -

that you are playing their tune

and sometimes singing their tune too.

So, yes, it's always a risk,

and I think it's something that should be avoided.

I'd be surprised that Rupert Murdoch didn't know that

Rebekah Brooks was close to Blair and Brown and Cameron,

that was pretty obvious, but he may have been

shocked to discover just what that involved - so much texting,

so many weekends spent together, all the parties that were attended,

and I wonder whether on reflection he thought that had been very wise.

Whether Rupert Murdoch approved or not,

he and his organisation were now effectively part of an establishment

that was every bit as extensive and corruptible

as the traditional old boy network

of which he had most definitely disapproved.

But for something like 15 years,

that was the way public life in Britain - involving the police,

politicians and News International - simply was.

And then a monumental scandal broke.

Despicable. That's how Milly Dowler's parents have reacted

after police told them...

Journalists at the News of the World had hacked the mobile phone

message box of murdered teenager Milly Dowler.

The News of the World have no humanity...

As the scandal unfolded, thousands of cases emerged...

More revelations in the News of the World...

..celebrities, victims of crime and public officials.

Disgusting revelations...

Tonight, Mr Coulson emerged from Lewisham police station.

It was systematic and widespread...

These are clearly very serious allegations.

..as was the network of corrupt officials on The Sun's payroll.

And if these crimes weren't bad enough, for Rupert Murdoch,

the decade-long corporate cover-up was worse.

A once proud and defiant newspaper proprietor

was reduced to abject apology.

I would just like to say one sentence.

This is the most humble day of my life.

It wasn't the humblest day of his life -

Rupert Murdoch doesn't do humble.

It was probably the worst days of his life,

because what he had created had come back to destroy him.

He had created this new kind of aggressive tabloid journalism -

it was that kind of aggressive tabloid journalism

that gave him the money to acquire The Times, The Sunday Times,

and then, post Wapping, to go and buy the TV stations

in America that became the Fox Network and the studio

that he took over as 20th Century Fox.

There's a Shakespearean tragedy

to it. What created him ending up destroying him in this country.

It became a perfect storm, forcing Murdoch to close

the News of the World, the paper that had brought him to Britain

in the first place. Then he was compelled to abandon his strategic

bid to take back full control of the jewel in his British crown, BSkyB.

'But the repercussions spread well beyond these shores

'to the rest of News Corporation,

'because of the implication that Murdoch himself

'had mishandled events.

'The fact is that Rupert Murdoch is no longer in full control

'of his company, and shareholder pressure has led to the corporation

'being split in two.'

But it has also led to something else which can be traced

right back to the legacy of Rupert Murdoch's own father, Sir Keith.

At its heart, News Corporation has always been a Murdoch family

business and, in common with family businesses the world over,

it's the founder's fondest wish to be succeeded by one of his children.

The question used to be, which one?

The question now is, can it be any of them?

Over the course of 20 years, Rupert Murdoch had,

at various times, appointed his children, Elisabeth, Lachlan

and James, to senior posts in the company.

More recently, youngest son James

emerged as the boy most likely to succeed.

He was made head of News International in the UK,

but that put him in the firing line when the phone hacking scandal

broke, which has all but wrecked his chances

of ever succeeding his father.

After decades of winning battles with Britain, Rupert Murdoch

finally lost a big one -

giving the people what they want eventually coming back to haunt him.

The damage done to him by the phone hacking scandal is hard to

overestimate. It appears to confirm, for example,

everything his detractors always said about him.

But much, much more important than that, for him,

his life's ambition, to leave what he has built to his children,

is now almost certainly a pipe dream.

Meanwhile, for Britain, the Murdoch era is virtually over.

What remains are newspapers that might otherwise have died out,

abundance in TV unimagined 40 years ago and, for better or worse,

a public culture dominated by the democracy of the market, not

dictated by establishment elites.

Rupert Murdoch offered us choice, and we bought it.

Subtitles by Red Bee Media Ltd