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Rupert Murdoch's biographer, New York journalist Michael Wolff, has a reputation for being well-informed and mischievous. Wolff certainly caused a stir with his latest gossipy item which he filed fresh from a visit to London.
He claimed, initially on the blogging site Twitter and then in a longer report, that Murdoch's News Corporation was interested in selling The Times and Sunday Times.
In Wolff's words, it is “a strong rumour... making its way around London banking circles”.
He tells me: “I have tracked back this rumour. It went through private equity circles on Thursday and Friday. People were dining out on it on Friday night.
“In my experience what these rumours mean is not that a sale is imminent or going to happen but there is a discussion of business strategy and alternatives that is going on [inside News Corp].”
Wolff argues that as Murdoch grapples with plans for an internet paywall, he faces a series of problems across an empire that includes the Fox TV network and movie studio, Sky TV in Europe, book publisher HarperCollins, troubled social networking website MySpace, the loss-making New York Post, and his most recent $5 billion acquisition, Wall Street Journal publisher Dow Jones, for which he overpaid in 2007.
At the UK newspaper division in Wapping, The Sun and the News of the World still turn a healthy profit, but The Times has almost never been in the black during 29 years of Murdoch ownership. Stablemate The Sunday Times has traditionally been very profitable but is now feeling the squeeze like most papers.
Together the two Times titles, known as Times Newspapers Limited, lost £51.3 million in the most recent annual accounts to June 2008 — although there has also been a major investment in new presses.
Unlike Murdoch's freesheet thelondonpaper which closed in September 2009, the Times titles remain immensely attractive for any would-be buyer. The Times, founded in 1785, is the reigning Newspaper of the Year and the second biggest of the quality dailies. The Sunday Times is the million-selling big beast of the quality weekend market.
“If you were looking to rationalise the business, you would probably sell The Times and Sunday Times,” says Wolff, who claims that “they don't really go together” with their raucous red-top stablemates. “I would say The Sun has more influence.”
He adds: “Rupert will tell you he is not a seller of newspapers. But at certain points he does what he has to do. There was a point when he was not a seller of magazines and then he sold almost all of them.”
Wolff knows how to tell a yarn and he has been proven right before, revealing Murdoch's private distaste for the Right-wing agenda of his Fox News channel.
Yet many still find it hard to believe Wolff's story has substance after so many years when Murdoch has been happy to bankroll The Times.
Simon Jenkins, editor of The Times between 1990 and 1992, thinks a sale is “almost completely unlikely”.
Another ex-Murdoch editor believes that selling the Times titles “doesn't make any sense unless Rupert comes out of newspapers entirely”. Disposing of them along with The Sun and News of the World would command a bigger premium, he says.
A third former senior Murdoch executive says: “Not when Rupert is alive and sentient.”
News Corp itself won't comment but makes clear that we should regard Wolff's story as hot air. “It's not true,” declares one high-ranking figure. What's more, says the Wapping camp, any sale wouldn't make sense when valuations are still low after 18 months of recession.
This isn't the first time that such rumours have surfaced. Murdoch was said to be so keen to buy the Financial Times a decade ago that he was supposedly willing to swap the Times titles for the FT.
Now he has finally sated that hunger by purchasing the Wall Street Journal, some observers such as Wolff think The Times is no longer his favourite “quality” title as he transferred his affections to the WSJ. He moved his top London executive, Les Hinton, and the then Times editor, Robert Thomson, to New York to support the Journal in 2007.
What is certain is that Rupert, who turns 79 in March, has been less involved in London in the last two years after handing control of the European and Asian business to his son James.
Since the younger Murdoch does not have his father's inky background in newspapers, there is a view that he must be less emotionally attached to them. But News Corp insiders point out he is committed and hands-on as executive chairman of the UK newspaper arm News International. Times journalists back that up, saying he takes a close interest — for example, in their launch of monthly science magazine Eureka last autumn.
However, James also made a revealing comment about newspapers when speaking to a financial conference in Barcelona in November.
The man who increasingly looks like Rupert's heir apparent, after receiving the backing of News Corp's biggest shareholder Prince Alwaleed bin Talal last week, said: “In the business of ideas, which is the business that we are in, we do think journalism plays a role, and we do think there are business models there that will make a lot of sense, albeit perhaps not at the scale of some of our broadcasting businesses and other entertainment businesses. Is it going to be as big a role? No.
“Structurally, television is vastly more profitable and a big opportunity.”
Industry insiders also note there has been a marked change in strategy at The Times in recent weeks.
The cover price has been raised to £1 this month — the first time in well over a decade and a half that it is as expensive as the other quality titles. Bulk sales and home newspaper distribution have been cut. There are also reports that the Times2 features section is to be “folded back” into the main paper.
Instead the focus at the Times titles is on the internet pay-wall, due to launch in the spring, and wooing the most loyal readers with membership club Times+.
Meanwhile, investment in The Sun continues as News Corp maintains a heavily discounted price of 20p.
We may learn more next Tuesday when Murdoch will be quizzed by Wall Street analysts. He unveils News Corp's second-quarter results which are likely to have received a big boost from the success of Fox's 3D movie Avatar.
Two decades ago, reports surfaced in the US press that News Corp was planning to sell TV Guide, then the crown jewel of his American magazine empire. A furious Murdoch offered $1 million to the journalist responsible for the story if he could prove it was true. No-one got the $1 million.
But, as it turned out, Murdoch did sell TV Guide — or at least most of his stake. That was eight years later.
