Thursday, March 27, 2014

Rupert Murdoch finally douses succession speculation by naming son Lachlan most likely heir

After years of uncertainty, Rupert Murdoch appears to have answered one of the biggest questions that have dominated in the media, corporate and regulatory world for years.

Just who will succeed him when he ultimately retires or goes to the big newsroom in the sky - and will their surname be Murdoch?

By naming his oldest son Lachlan as co-chairman of News Corporation and 21st Century Fox, Rupert Murdoch has not only doused the "succession" speculation.

Mr Murdoch, now 83, has also cemented the Murdoch family's control over the media empire he founded six decades ago.

Here's my analysis broadcast on this morning's AM program.

At last Mr Murdoch is able to say there is a future beyond him, even though there is no suggestion that he is anywhere near to relinquishing his day to day control of the company.

According to News insiders, Mr Murdoch is known to point to the longevity of his mother Dame Elisabeth (note "s") Murdoch who died aged 102 in 2012.

But ever the strategist, Rupert Murdoch has led journalists, investors and analysts in a guessing game over his true intentions.

Back in August 2011, as the News of the World phone hacking scandal began to emerge,  I asked Mr Murdoch in an investor teleconference if hehad any update on his succession plan.

Mr Murdoch appeared to acknowledge this his younger son James Murdoch was not the preferred choice and that his top lieutenant and President of News Corporation Chase Carey might be in line.

"Chase is my partner and if anything happened to me I'm sure he'll get it immediately -- if I went under a bus. But Chase and I have full confidence in James," Mr Murdoch said.

James Murdoch has been badly damaged by the phone hacking scandal and was eventually forced to resign as chairman of BSkyB after a British parliamentary committee said he had some "a wilful ignorance of the extent of phone hacking".

However, in last night's announcement James Murdoch was re-elevated as co-chief operating officer at 21st Century Fox which makes him the third most powerful Murdoch in the empire behind Rupert and now Lachlan.

But David Folkenflik, author of "Murdoch's World", says while the succession suspense is over, as always Rupert Murdoch has been working to a strategy.

"This is something that Rupert Murdoch has wanted tor a long time. He's always wanted these succession games to set his adult children against each other," Mr Folkenflik told Bloomberg.

"James Murdoch took a real hit during the phone hacking scandal and in 2011 when that was erupting  Rupert sought to bring his oldest son Lachlan back into the fold.

"He had left because there had been these backroom machinations where he had been fighting the top guy under Rupert Murdoch Peter Chernin and the with Roger Ailes the powerful chairman of Fox News."

"And yet Lachlan, who has had a rather middling to mediocre record in Australia, has come back into the fold once the companies have been split."   

Wall Street investors seemed uncertain about today's succession announcement with News Corporation shares falling 1.9 percent and 21st Century Fox down 1.35 percent.

Lachlan Murdoch is also stepping down as chairman of the Ten Network where he holds 8.8 percent of the broadcaster's stock.

A lingering question is whether he will push for a News Corporation takeover of Network Ten subject to the right price and a favourable change in media ownership rules.

1 comment:

  1. You gotta wonder about the machinations in the Sun KIng's Court. Seasoned News Corp execs. know well the saying: 'Remember Icarus' The analogy is most apt - for Icarus was the son of Daedalus the master craftsman. Dad knew the dangers of flying with wings of wood, feathers and wax - but poor old Icarus....

    The new 'Non-Executive Co-Chairman' seems to be risk averse and doesn't have much of a track record either here or in the USA.

    Network TEN is in deep trouble and Lachlan Murdoch has heaps invested. Inheritance threatened and it's News Corp. to the rescue once more.

    Young Lachy carries a lot of baggage beneath his wings - Super League, OneTel, Australia (the Movie) Network TEN. James Warburton...and the string of senior execs who carried the can for Lachlan's challenged approach to media. The US power execs who did him in are still at News Corp...


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