Rupert Murdoch turns 90 in just six days, sparking the usual King Lear succession debate about what happens next.
But it’s the date the week after — March 20 — that’s got the markets wondering. That marks the two-year anniversary of the Fox entertainment business being sold to Disney and the expiry of the freeze on further asset sales.
It’s a good time for the family to be thinking about its News Corp/Fox holdings. News Corp shares are up about 17% in the past month, increasing the family’s wealth by a lazy $300 million.
The boost came off the back of the end-of-year profit jump driven by the company’s COVID cost-cutting (including closing most of its Australian regional mastheads) and with the newly sourced revenue stream courtesy of its Google deal (thanks Josh!)
But as Rupert ages so too do his children. The more time passes, the more current heir-apparent Lachlan (who turns 50 in September) looks less like the young Prince Hal in Shakespeare’s histories and more like the media empire’s equivalent of our own Prince Charles.
Over the past year, Rupert seems to have had a new lease of corporate life. After Donald Trump blamed Fox — in part at least — for his (still unacknowledged) election defeat, it was Fox chair Rupert — not executive chair and CEO Lachlan — who intervened to pivot the network back to its right-wing base.
Similarly it’s been Rupert, as executive chair of News Corp — not Lachlan as chair — who’s been driving the proposed News UK TV as a Sky News/Fox News counterpart in Britain. He’s spent the pandemic hunkered down in the English countryside where he’s hosted several British ministers, including Prime Minister Boris Johnson.
After his accident on Lachlan’s yacht in 2018, Rupert was rarely seen in public. When soon-to-be ex-Australian prime minister Malcolm Turnbull rang him that year to protest News Corp’s political coverage, the elder Murdoch fobbed him off on to Lachlan. At the time it seemed a recognition of the new hierarchy in the family’s twin companies.
Now watching Rupert stick his fingers back in the day-to-day twists of the companies’ fortunes confirms what’s been suspected since the 2019 Disney sale: none of the children really want the crown. It’s no longer where the money is.
The family’s combined holding in the two companies through the family trust is worth about US$4 billion at today’s prices. The bulk of the wealth (about $18.5 billion) lies in the Disney shares it exchanged for the Fox holdings.
Now about those shares. They’ve jumped about $8 billion in the past two years. Easy money — much easier than scrimping and shaving on costs in the sort of declining media owned by News Corp and Fox.
Surely getting rich(er) by doing nothing is far more pleasant than running a business that relies partly on bullying, partly on kowtowing to politicians like Scott Morrison, Trump and Johnson.
The family’s actions suggest they think so too. Last year younger brother James joined his two sisters, Prudence and Elizabeth, in breaking out when he resigned from the News Corp board over its editorial direction. This week, the Financial Times reported that Lachlan was increasingly hands off as CEO at Fox, leaving management to chief legal and policy officer Viet Dinh.
The familial disagreements are mediated through the family trust, where eight votes are divided: four to Rupert (expiring on his death) and one to each of the four older children. The Murdochs would understand the fragility of divided and disengaged heirs. Rupert famously leveraged that breakdown in the Bancroft family to take over The Wall Street Journal.
The market is pricing the family companies for sale once the two-year post-Disney ban ends, perhaps beginning with the shedding of the most vulnerable components: the Australian tabloids, Foxtel and the US Fox television stations — provided a buyer could be found. The remaining assets could be remerged, given that the UK post-hacking regulatory restraints on the News Corp brand seem resolved.
That would position a post-Rupert family trust to follow the heirs of the Packer and Fairfax dynasties and abandon their remaining media to the anonymous hands of institutional shareholders and hedge funds. Unless Rupert decides to move first.