Or, what the heck, about how a thirty-one-year-old Chinese immigrant wed a powerful media baron and took on important, though unofficial, duties at a large public company. Here’s how: be sponsored by an American family, marry the soon-to-be-divorced husband, then leave him for a younger man soon after becoming eligible for a green card.

Mr. Cherry [the sponsor/husband] says he and Ms. Deng [now Mrs. Rupert Murdoch] briefly reconciled at one point, but they split for good when it became clear she was continuing to see Mr. Wolf [the younger man]. “She told me I was a father concept to her, but it would never be anything else,” Mr. Cherry recalls. “I loved that girl.”

Divorce records filed with the Los Angeles County Superior Court show that the Cherry-Deng marriage lasted two years and seven months. That was seven months longer than what was required for Ms. Deng to obtain a “green card,” allowing her permanently to live and work in the U.S. as a resident alien. Mr. Cherry says he and Ms. Deng actually lived together for “four to five months, at the most.” (11)

Handmaidens don’t write that.

My personal favorite will always be Susan Faludi’s masterpiece [12] on the human costs of leveraged buyouts.

On the Friday afternoon before the dismissals went into effect, Patricia Vasquez, a 14-year systems analyst, heard that her name was on the list. That evening, Mrs. Vasquez, a Safeway devotee famous for her refusal to take lunch hours, packed her service citations in a cardboard box and left looking pale and drawn. The next morning her two young children found their single mother on the bathroom floor, dead of a heart attack.

Was “Safeway” controversial? You bet it was.

The story, among other things, introduced us to Peter McGowan, better known today as slugger Barry Bonds’s enabler, who sold the company his family started to a buyout firm. We even meet McGowan’s mom, who clearly doesn’t understand high finance:

Will anyone get hurt? Mrs. Magowan pressed her son at the time, according to company staff members. Will anyone lose his job?

No Mom, Mr. Magowan promised, according to the staffers’ account. No one will get hurt.

“Yes, I was greatly concerned about the people,” Mrs. Magowan recalls today, in her mansion overlooking the San Francisco Bay. She declines to comment further.

In fact, 63,000 Safeway employees lost their jobs.

But the story also showed—as only the Journal could— that the buyout didn’t even do Safeway any good.

The public offering completed recently didn’t quite go as planned. The offering’s underwriters knocked the price down to $11.25 from the $20 a share envisioned last summer. Mr. Magowan himself concedes, “I think if we had known right at the start that this was the price that we would’ve gotten, we probably wouldn’t have come out with our offering.” He blames the much-publicized problems of other leveraged companies for unjustly tainting Safeway’s offering and driving away stock shoppers.

But some potential investors say that it was Safeway’s own financial condition that turned them off.

The company labors under an interest bill of about $400 million a year, a negative net worth of $389 million, and a remaining $3.1 billion in debt. The company’s net income was only $2.5 million last year (after accounting for nonrecurring expenses), down from $31 million the year before. Safeway lost a whopping $488 million in 1987, the first year of the LBO.

A large amount of capital improvement has been postponed, with such annual spending falling from an average $600 million to $700 million in the three years before the buy-out to an average of $300 million in the years since. The company estimates it must spend $3.2 billion on store remodeling and openings over the next five years. And Safeway now has few assets left that it can justify jettisoning.

Listen, Rupert Murdoch is a great deal-maker, innovator, crockery-breaker. I’ll even throw in heart-breaker and love-taker. Is he a great story himself? Yes. Has he on balance helped media more than he’s hurt it? I have no idea, but I’m willing to concede the possibility. He should live to be a hundred and thirty.

But, really, is Murdoch a great newspaperman?

Under News Corp., the Journal doesn’t do Wendi Deng, Falun Dafa, or the 2007 China Pulitzer series.

A lack of pollution controls has contaminated China’s soil, water and air with lead, mercury and other pollutants — and left millions of children with dangerously high levels of toxic metals in their blood. Making matters worse, much of the manufacturing that used to pollute the West has found a ready home in China, where environmental regulations are loosely enforced.

Murdoch dropped the BBC and the ex-governor of Hong Kong. Those stories don’t even get proposed, let alone published.

And anyone who thinks “Safeway” runs in a News Corp. paper is dreaming. With the risks it took, it wouldn’t be published today by anyone, for that matter.

And this is to say nothing about the issues raised and the actual people—Chen Zixiu, Patricia Vasquez and the unnamed woman who collapses on a pile of drumsticks—given voice in these stories.

But, surely, you say, everything else runs, especially the great Wall Street reporting, right?

I report. You decide. News Corp. was once a customer of Michael MIlken, who helped raise a crucial series of junk bonds that the company misleadingly booked as “shareholder funds”, aka equity. Milken was a powerful executive at—who remembers?— Drexel, the crew in footnote 3.

With all due respect to Murdoch, who deserves some, the stories won’t survive this combination.


1. Insider Trading: The Scandal Spreads —- Unhappy Ending: The Wall Street Career Of Martin Siegel Was A Dream Gone Wrong —- Disgrace of Arbitrager Was Self-Fulfilling Prophecy; It All Began With Bendix —- Dinner at the Boesky Estate
By James B. Stewart and Daniel Hertzberg,
Feb 17, 1987