Jun 29, 2012

Mayne: demerger gives Rupert whip hand on dynastic carve-up

Always remember this: Rupert Murdoch loves newspapers and is a control freak who fanatically obsesses about sustaining his family’s powerful dynasty.

Stephen Mayne — Journalist and Founder

Stephen Mayne

Journalist and Founder

Always remember this: Rupert Murdoch loves newspapers and is a control freak who fanatically obsesses about sustaining his family’s powerful dynasty. Therefore, his belated embrace of a publishing demerger should be viewed as an opportunity to shore up the family’s control over key assets and succession.

For all this talk of Chase Carey winning the internal argument, the baseball-loving American’s power has actually been reduced. Rupert Murdoch turns 82 next March and shortly thereafter he will become executive chairman of the separated entertainment business, with Carey remaining as his clear understudy at a smaller business.

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4 thoughts on “Mayne: demerger gives Rupert whip hand on dynastic carve-up

  1. michael r james

    I actually think it would not be a bad thing, long term, for a Lachlan takeover in Australia. I suppose one could call this the ABR scenario: Anyone But Rupert.
    Let me do a weird thing and re-post a relevant comment I posted to Paul Barry’s article the other day, but which typically for the Power Index, disappeared into the ether. (The seem to be doing a good job of anaesthesizing their newborn.)

    (Paul Barry wrote: ) ” If the two parts of the News Corp business are separated into two companies with different shareholders and separate listings, it will be absolutely impossible to continue that cross-subsidy.”

    Not really. First the shareholders will be identical, at least at first, and second, that means Rupert will still control 40% of voting shares–and you can be sure he has no intention of allowing any change there). Third, he and the Murdoch family trusts will be the biggest beneficiaries of any up-valuation of the entertainment half of the split. So as long as he thinks he can still control everything (and who would bet against that?) then the split may not make as much difference as some might like to hope. If it did he wouldn’t allow the split.

    Nice thought about Gina Rinehart. It would be terrific if she got her hands on News Australia (and, sotto voce, wrecked it…). But, just as in the earlier conjecture, it can’t happen as long as Rupert is breathing (who for a millisecond believes the Brits are going to get serious–all those inquiries are mere theatre intended to pretend they are serious). And on top of that, she would have to buy a lot of shares at market price (or above) because she will not get Rupert’s 40% voting shares at his (is it 10%?) of actual issued shares.

    But you know one little fantasy in which almost everyone could be a winner: Rupert engineers (finances…somehow) Lachlan to buy News Australia. He cannot possibly be as conservative or authoritarian as his father so potentially Australia gets some relief from the toxic News press. And Rupert still sees the empire continue under one son, even if he thinks he is a wet-behind-the-ears liberal. (Luckily Elizabeth or James have no interest in the print media or Australia.)

  2. H Declan

    Why is this company (or whichever demerged part of it) allowed to increase its stake in Australia’s monopoly pay TV business when the circumstances in London can only lead to the conclusion that its management is either corrupt or incompetent? Can we only focus on one megalomaniac at a time? Why is Rupert not held to account?

    Oh well it will be good to see the Australian sink or swim on its own……

  3. Liamj

    I must be very naive, because a foriegn billionaire funding loss-making newspaper pulpits for decades seems a little suss – what is the return on investment?

    Related, what is Ruperts return on propping up Abbott Tony? If the implicit regulatory bargain is just BAU, shouldn’t the mad monk come clean about just how far he’d let Rupert go?

    And why aren’t the police and ASIO and ASIS interested in this undue foriegn influence? Too busy selectively leaking to News Corp i guess.

  4. Edward James

    Malcolm Turnbull, who for some reason has never received the blessing of Rupert Murdoch. Could that reason possibly be Malcolm Turnbull once worked for Kerry Packer ? Edward James

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