The handoff: Murdoch sticking with sons
Power shift to two men leaves family’s women shut out.
LOS ANGELES — Sibling rivalries. A quest for power. An affair. A scandal. The turbulent lives of 84-year-old billionaire Rupert Murdoch and his heirs returned to the spotlight last week as the aging magnate took steps to hand over control of the media empire he built nearly from scratch.
The Murdoch family — whose assets include The Wall Street Journal, Fox News and the 20th Century Fox movie studio — in some places garners the t ype of paparazzi coverage its global outlets have bestowed on royals.
But unlike with royals, in the Murdoch family, the eldest child’s inheritance is never ensured.
Once it was Lachlan, then it was James, and now both seem to be positioned to soon control the media behemoth that split into t wo separate entertainment and publishing companies two years ago: News Corp. and 21st Century Fox.
And in the wings operates spurned daughter Elisabeth, whose independent voice and fortune have made her one of London’s top socialites and a media power in her own right.
“Between who’s on top and who’s arriving and who’s departing — that’s always changing,” says Michael Wolff, a Murdoch biographer and author of “The Man Who Owns The News: Inside the Secret World of Rupert Murdoch.”
“But because you remain a Murdoch, you are always in the mix,” Wolff said.
The latest t wist in the family drama came June 11 with news that James, the 42-year-old second son, would take over as CEO of 21st Century Fox, leapfrogging 43-year-old first son Lachlan in the line of succession.
According to a person with direct knowledge of the matter, Lachlan would become co-executive chairman, his father executive chairman — while keeping his direct report from Fox News CEO Roger Ailes. The person spoke on condition of anonymity and wasn’t authorized to speak publicly.
The appointment, expected to be confirmed at a board meeting in the coming weeks, creates “an enormous amount of complexity,” Needham & Co. stock analyst Laura Martin said.
While the bake-off isn’t over, it’s clear the males in the family are in line for control.
“This cements the complete exclusion of Elisabeth from the gig, as well as Prudence,” said Claire Enders, a media and telecom analyst and founder of London-based Enders Analysis Ltd. “This is basically a t ypical patriarchal succession.”
Here’s a look at who’s in and who’s out at 21st Century Fox and its sister publishing company, News Corp.:
IN
■ James Murdoch, incoming CEO of 21st Century Fox. Formerly chief executive of News Corp.’s international operations, James is credited with helping expand the Sky satellite TV brand to Ita- ly and Germany, stakes later sold for $9. 3 billion. Briefly in charge of British newspapers, James was tainted by the phone-hacking scandal that forced the closure of the tabloid News of the World in 2011. British media regulator Ofcom questioned his competence, saying his failure to act was “difficult to comprehend and illjudged.” In 2012, he resigned as chairman of London-based satellite broadcaster BSkyB to distance it from the scandal. He moved to New York and was named co-chief operating officer of 21st Century Fox in March 2014.
■ Lachlan Murdoch, incoming co-executive chairman of 21st Century Fox. One-time executive director at News Corp. and deputy chief operating officer in 2000. He made a notoriously bad investment in Australian telecommunications company called One.Tel, which subsequently collapsed, losing hundreds of millions. But an investment in Australian online real estate company REA Group in 2000, reportedly worth $11 million, ballooned. The value of News’ stake is $3.1 billion today. Lachlan abruptly left News Corp. in 2005 after reportedly clashing with his father. In one telling, executives went over Lachlan’s head, “and, very foolishly, Rupert Murdoch didn’t back his son up,” said David McKnight, author of “Rupert Murdoch: An Investigation of Political Power.” Returned to the fold in March 2014 when he was named non-executive co-chairman of Fox and News Corp.
OUT
■ Elisabeth Murdoch, 46, angel investor in media and technology startups. In 2001, she founded Shine Group, a TV production company that made such shows as “The Biggest Loser” and “MasterChef.” She sold Shine to News Corp. for around $600 million in 2011, triggering shareholder lawsuits that accused Rupert Murdoch of nepotism. She later told a Guardian newspaper media event she had “no ambition” for the top job.
■ Prudence MacLeod, Murdoch’s first child, born in 1958. She’s married to Alasdair MacLeod, a former News Corp. executive in Britain and Australia, but otherwise has little to do with the media companies. However, she shares with James, Lachlan and Elisabeth a single vote in the family trust that will own 38.4 percent of voting shares in both News Corp. and Fox upon Rupert Murdoch’s death.
■ Grace Murdoch, 13, and Chloe Murdoch, 11, are the children of Rupert Murdoch and his third ex-wife Wendi Deng. The couple divorced in 2013 amid high-profile reports of her alleged affairs with former British Prime Minister Tony Blair and Google Executive Chairman Eric Schmidt, including a diary entry obtained by Vanit y Fair last year in which she pined over Blair’s “good body.” Deng reportedly clashed with Murdoch over her children’s inheritance, which amounts to nearly 11 million nonvoting shares in the two media companies.