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01.09.10

The Fox-Murdoch Feud

Wendi Murdoch encouraged Rupert’s son-in-law to fire a rocket at Fox News boss Roger Ailes—the first salvo in an escalating war between Murdoch’s heirs and the company brass for the future of one of media’s hottest enterprises.

The long-simmering feud between Fox News Chairman Roger Ailes and Rupert Murdoch’s adult children has finally erupted into full-scale war—a death struggle over the future of News Corporation, the financially beleaguered media and entertainment conglomerate that the 78-year-old Murdoch continues to control as chairman and chief executive.

The first shot—really a nuclear device—was fired today on The New York Times’ Web site by British public-relations executive Matthew Freud, Murdoch’s son-in-law. Freud’s on-the-record quote, for a front-page profile of the 69-year-old Ailes, who launched and runs News Corp.’s most profitable division, is stunning in its condemnation—a frontal attack on Ailes and an apparent attempt to force News Corp.’s founder to choose between blood and money, between his progeny and his most-prized executive.

A source close to Freud said Wendi Murdoch was one of the family members who encouraged his Ailes attack in the Times.

“I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes’ horrendous and sustained disregard of the journalistic standards that News Corporation, its founder and every other global media business aspires to,” Freud told the Times. A News Corp. spokesperson fired back: “Matthew Freud's opinions are his own and in no way reflect the views of Rupert Murdoch, who is proud of Roger Ailes and Fox News.”

A spokesman for Ailes, who in a previous career was a brass-knuckled Republican media consultant who toiled for Presidents Richard Nixon and George H.W. Bush, had no response today to Freud’s charges. But a News Corp. insider told me the pugnacious Ailes, a self-made son of the working class who was paid $23 million last year, more than Rupert himself, is probably enraged at Freud and plotting his revenge. “Ailes would kill him if he thought he could get away with it,” the insider told me.

Lloyd Grove: Is Roger Ailes Finished at Fox?One thing is pretty clear: Freud’s opinions are much more than just his own. They undoubtedly reflect those of his wife Elisabeth Murdoch, 41, a former News Corp. executive who owns a television production company in London, and are very likely in sync with the views of James Murdoch, Elisabeth’s 37-year-old brother, who has been taking a larger role within News Corp. in recent years. Freud often maneuvers behind the scenes on behalf of his brother-in-law, who is chairman and chief executive of News Corp.’s Asian and European operations and widely seen as Rupert’s heir apparent.

It’s unclear if Freud’s attack reflects the views of the previous pretender to the throne, 39-year-old Lachlan Murdoch—who in 2005 left the company and moved back to Australia after their father sided with Ailes in a dispute over Fox Television. As the Times story points out, Rupert owes a great deal to Ailes, who has turned Fox News into a $700 million profit machine—“believed to make more money than CNN, MSNBC and the evening newscasts of NBC, ABC and CBS combined.”

Ailes, a barrel-chested man who doesn't shrink from a fight, especially in his earlier days when he was prone to physical confrontations, has an ego to equal his bulk. Aside from his pioneering role in political attack ads, Ailes' storied career includes producing daytime television's popular Mike Douglas Show in the 1960s, developing CNBC as a successful cable outlet in the 1980s, acting as a communications coach to such political figures as French President Jacques Chirac—and even producing Broadway shows.

Freud, the great-grandson of Sigmund Freud, is also friendly with Rupert’s 41-year-old Chinese-born wife, Wendi Deng, a former News Corp. executive who has two young children with the billionaire mogul. While her views on Ailes are not publicly known, News Corp. insiders say she's not a fan. Indeed, a source close to Freud told me Wendi was one of the family members who encouraged his Ailes attack in the Times.

Wendi is a skilled inside player, and a possible result of this corporate PR embarrassment would be to undermine Rupert's confidence in Elisabeth and James, thus ultimately advantaging Wendi's children—8-year-old Grace and 6-year-old Chloe Murdoch—in the inevitable successionary rivalry. It would help, of course, if Rupert hangs on as long as his formidable 100-year-old mother. Freud didn't respond to a voicemail message left on his cellphone.

Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.