Rupert Murdoch’s Right-Hand Man
Lon Jacobs helped News Corporation take over The Wall Street Journal and MySpace
Published in Corporate Counsel Edition® 2008 magazine
on December 1, 2008
Updated on April 18, 2009
Things were going so well at News Corporation, the parent company for media tycoon Rupert Murdoch’s many holdings, including Dow Jones, MySpace, and DirecTV, that Murdoch went to his general counsel and announced he wanted to buy more shares in the company.
Could he do it?
“Sure,” Lon Jacobs replied. “But if you do, you’ll go to jail.”
Murdoch, who hadn’t realized the company was in a “quiet time”—when executives are subject to insider trading restrictions before announcing information that could affect the stock price—burst out laughing and said, “Well, I guess I won’t do it then.”
That 10-second exchange between Murdoch and Jacobs is typical of their relationship-incisive, informal and informative. It’s the way they work with each other, and a model for other in-house attorneys and ambitious, aggressive corporate executives.
Jacobs, who has been at News Corp. since 1996 and general counsel since 2005, is one of the few people in the world who tell Murdoch what he cannot do. But that doesn’t happen often.
“I think that your job is to figure out how to say yes,” says Jacobs, who tells Murdoch “no” about 10 percent of the time. Sometimes there’s no legal component. “The other 80 percent of the time it’s my job really to evaluate the risk reward. Will this deal get through? Will it survive antitrust scrutiny? Will it be approved by the shareholders? What sort of lawsuits will result from taking this action and what are the chances that you’re going to lose?” If News Corp. is determined to make a deal, Jacobs advises Murdoch on how to structure it, how to position it, and what arguments to present to antitrust authorities and shareholders.
Jacobs is a good fit with News Corp. and Murdoch, the outsider from Australia who moved to America and imposed his vision and his will on the global media markets. Like his boss, Jacobs has had an unorthodox, hardscrabble path to becoming a key player in some of the most far-reaching business deals in recent years. But in other ways, he and Murdoch are about as different as a boss and his right-hand man can be.
Lawrence Jacobs, 53, grew up with two older brothers in a family of German and Russian immigrants in the Levittown section of Middletown, Pa. He’s not sure why his mother started calling him “Lon,” but thinks maybe it was to avoid confusion with a neighbor boy named Larry. He had an idyllic, unremarkable childhood, full of sports, fooling around in the woods and on lakes and streams, and doing as little as possible in school while still getting A’s.
It was a household of Democrats and Kennedy fans who talked over dinner about fairness, justice and civil rights. Jacobs became fascinated first by the Civil War and then the American Revolution. Noticing that so many of the people who made things happen were lawyers—his favorites are Abraham Lincoln and Alexander Hamilton—he dreamed he’d grow up to be one, too. His mother was an IRS tax examiner, and his father ran a small construction business where Jacobs worked as a teenager. “I hated it,” he remembers.
He went off to college at Sarah Lawrence but didn’t feel comfortable at the small, elite school, and dropped out after two years. He moved in with a girlfriend, worked for his dad, and tried to figure out what to do with his life.
After two years, he went back to school at Temple University in Philadelphia. Still working full-time to pay his own way, he found that he fit in at a big urban school alongside other commuting, working-class kids like himself. He graduated and entered Brooklyn Law School.
There, he recalls, “They scare you to death the first year, work you to death the second year, and bore you to death the third year.” Aiming for a career with the ACLU, he took a summer job and then a part-time position with Squadron Ellenoff, a boutique firm known for its First Amendment practice. He joined the firm after graduation in 1981 and for two years practiced under Arthur Siskind, who was doing a lot of work as outside counsel for News Corp., helping the Australian company gain a foothold in the United States.
Then Jacobs got a call from his two older brothers back in Pennsylvania. Their father was ill, and they needed him to come home and help them run the construction business. Jacobs left his job, and for three years he helped manage the business, doing everything from making sales calls and bidding on jobs to, when necessary, putting on jeans and swinging a hammer.
When the business went belly-up in 1986 Jacobs called a friend and wondered whether he’d ever be able to get another legal job in New York. Ted Ellenoff returned his call: “We want you back.”
In hindsight, Jacobs says the break was good for him. “Going through something like that gives you a great deal of perspective, so I think it made me a much better lawyer,” he says. “Being in business you realize that what clients want isn’t for you to complete an assignment. What they want is cooperation. They want you to be concerned about their business, and look at it as a real-life situation and not stay in your ivory tower.”
Jacobs slid back into working for Siskind on News Corp. business, and immediately set to work helping establish the Fox television network. At Jacobs’ first meeting as a partner of the firm in 1991, Siskind announced that he was leaving to become Murdoch’s general counsel. Jacobs and Siskind continued to work together until 1996, when Siskind asked Jacobs whether he’d consider joining News Corp. as deputy general counsel. “I’ve been waiting five years for you to ask me,” Jacobs told his mentor. When Siskind retired four years ago, Murdoch told Jacobs he had the top job.
Today he oversees a couple hundred News Corp. lawyers around the world, and delegates work to many firms, especially Skadden, Arps, Slate, Meagher & Flom. He spends relatively little time on day-to-day operations and, gratefully, even less on administrative matters. “It’s mostly a transactional job,” Jacobs says.
Those transactions can be controversial. Consider the $5.6 billion acquisition in 2007 of Dow Jones and The Wall Street Journal. Jacobs was at Murdoch’s side during the sensitive and sometimes tense meetings with Journal editors, executives, and the Bancroft family, which had controlled the newspaper for more than a century. He believes fears about Murdoch in the media industry are overblown and insists that reporters and editors at the Journal are “thrilled” to have an owner “who really understands newspapers and someone who really respects journalists and thinks that this is the best newspaper in the world.”
During the 2005 acquisition of MySpace, Jacobs had to immerse himself in the evolving technology and challenge of building a new online social-networking business model based on advertising revenues. “It has been fascinating on so many levels,” he says.
However, he adds, the main appeal of his job is working for Murdoch and other News Corp. executives, including Peter Chernin, the president and COO of News Corp.; Murdoch’s son James, the chairman and CEO for News Corp. in Europe and Asia; and Dave Devoe, CFO of News Corp. “My bosses are all brilliant, they’re all decent, they’re all inclusive,” he says. “There are people who say that Rupert Murdoch is the greatest entrepreneur of the 20th century. I get to work for him.”
Jacobs says the public doesn’t often see Murdoch’s good-natured humor, self-effacing manner, and personal kindness and generosity. “He is one of the few executives at that level who doesn’t buy his own press, good or bad,” Jacobs says. “And he’s not just about business. He is just about the most curious person you’ll meet, and has the most intellectual stamina of anyone I’ve met. He will talk about the global events of the day and talk about them with anybody.”
Murdoch, for his part, is grateful to have Jacobs at his side. “Lon has been one of my closest advisers for years and I trust his judgment completely,” he says. “He’s highly respected in the legal community, among our business partners and throughout the News Corp. executive ranks.”
Jacobs doesn’t see his liberal politics—he and his wife donated several thousand dollars to Hillary Clinton’s presidential campaign last year—as a conflict with his bosses (although Murdoch surprised the media by praising Barack Obama during the campaign season). Jacobs believes too many of his fellow liberals think, “The First Amendment is important unless it’s Fox News, and then, well, we don’t like what Fox News says so we’ll make an exception to our strong beliefs about the First Amendment.”
In fact, Jacobs is a big fan of Roger Ailes, the head of Fox News, viewed by many as a Cheneyesque character, the Darth Vader of right-wing politics. “Roger Ailes is a genius at what he does,” Jacobs explains. “He created Fox News, runs Fox Business Network, runs Fox TV stations, he has all of this political experience, and he also happens to be about the funniest man I’ve ever met. There’s nobody you’d rather be in a foxhole with than Roger Ailes, and there’s nobody you’d rather have as a boss than Rupert Murdoch.”
Ailes says that unlike some lawyers, Jacobs doesn’t go “zero to 60” over relatively minor legal matters. “Lon doesn’t rise to the occasion when there’s no occasion,” Ailes says. “He stays cool, sorts it out, and tries to simplify it. But when things get tough, no one works harder. He saves you a hell of a lot of time. He has an uncanny ability to put his finger on what is important and to focus on getting it done.”
Jacobs lives with his wife, Hannah, a former Christie’s executive, and their two daughters on Manhattan’s Upper West Side. “He’s a totally passionate person,” Hannah says. “He loves his life, his family, his kids. And he loves going to work.” They have a weekend home on the Jersey Shore, and try to vacation each winter on a Caribbean island. Jacobs spends a lot of time with his daughters, 15-year-old Emily (“Don’t tell anybody, but she prefers Facebook …”) and 12-year-old Molly, often taking them to Central Park on the weekends.
His indulgences are ducking out of the office for a swim a couple of times a week, squeezing in a round of golf once in a while, and dropping into a cigar bar for a hand-rolled Padrón from Nicaragua. “Although my wife has gotten me down to one a week,” he says.
Jacobs has no professional plans beyond showing up tomorrow morning at his Rockefeller Center office and dealing with whatever crisis is the immediate priority. “As long as they’ll let me,” he says.
—Timothy Harper, based at www.timharper.com, is a journalist, author and lawyer who teaches at NYU and the CUNY Graduate School of Journalism.