16/04/2024

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Real-life ‘Succession’ as Lachlan Murdoch solidifies perch atop Fox and News Corp.

Real-life ‘Succession’ as Lachlan Murdoch solidifies perch atop Fox and News Corp.

Lachlan Murdoch has long shared his famous father’s enthusiasm for right-leaning politics and the news business, including the family’s vast portfolio of newspapers — even as the industry was ravaged by internet search engines and shunned by investors.

But he also has a sentimental streak.

When Rupert Murdoch decided to unload much of the entertainment assets he had spent decades building, investment bankers advised the clan of ruthlessly bottom line-focused media moguls to include the real estate — the company’s legendary movie studio lot in Century City — as part of the deal.

Lachlan Murdoch said no. He felt the lot was the beating heart of the company on the West Coast, one steeped in Hollywood history. Besides, he sensed the Century City land would only grow in value, a belief that has proved true (it’s worth billions).

Now, the 52-year-old executive is firmly presiding over the empire his father built — encompassing the most influential conservative media institutions in America — from an office suite on the L.A. studio lot. Fox Corp. and News Corp. on Thursday announced Rupert Murdoch was stepping down from his executive role at the two media companies and that Lachlan would succeed him atop the two companies. The changes take effect in November.

Lachlan Murdoch becomes the sole chairman of News Corp., the publishing company that owns the Wall Street Journal and the New York Post, and executive chairman of Fox, the television arm that includes Fox News, Fox Sports and the Fox broadcast network. Because Lachlan Murdoch has been at the helm as Fox’s chief executive since March 2019, and because he is exceedingly close to his father, analysts expect the son’s strategy to largely reflect the father’s.

“Lachlan is probably the most aligned with his father in terms of politics and in terms of his vision of the business,” Paul Verna, principal analyst at Insider Intelligence, said. “There’s not a lot of daylight between the two men.”

Lachlan Murdoch has previously said the political bent of Fox News, which has made the network a lightning rod, will remain.

Fox documents from late 2020 and early 2021, revealed in the course of high-profile and devastating litigation, underscored the tight collaboration between the two Murdochs. The pair were involved in overseeing Fox News’ coverage of President Trump and his false statements that the 2020 election was stolen from him, which proved costly for the company. In April, Fox agreed to pay $787 million to Dominion Voting Systems to avoid a trial over defamation claims.

Documents in the case showed how the Murdochs and Fox News Media Chief Executive Suzanne Scott in November 2020 discussed ways to avoid further alienating viewers after Fox News made the early and accurate call that Arizona had tipped to then-candidate Joe Biden.

The situation “needs constant rebuilding without any missteps,” Lachlan Murdoch wrote, according to the internal documents, referring to the company’s effort to regain trust among Fox News fans.

But there are differences between the pair, beyond the generational gap.

In fact, for a while, Lachlan Murdoch appeared uninterested in working with his father — at a time when his younger brother James dived into his corporate role with relish. Back then, it looked like James was in line for the throne.

Rupert Murdoch has long made clear that one of his two sons would ultimately succeed him. Beyond wanting to keep his business in the family, the elder mogul is known among friends for his lack of sentimentality, buying and discarding properties that he once coveted, including the Hollywood movie studio known for “Avatar” and “Titanic,” DirecTV and the European satellite television service Sky.

When he was CEO, he worked in an expansive office on the fifth floor of a modern office building on the lot.

In contrast, Lachlan prefers the ground-floor office of the Depression-era Art Deco structure, Building 88 on Fox’s Avenue of the Palms, where movie pioneer Darryl F. Zanuck once ran the show. Inside his office, a bank of TV screens flicker with Fox News and other channels. Editions of the company’s newspapers are proudly and neatly displayed nearby.

Lachlan Murdoch and Rupert Murdoch at a tennis tournament

Lachlan Murdoch and Rupert Murdoch watch the U.S. Open tennis championships in 2018.

(Adrian Edwards / GC Images)

Lachlan Murdoch is fulfilling the career trajectory that his father mapped for him. Just as Rupert Murdoch had done seven decades before, after his father — a respected Australian news editor and former war correspondent Sir Keith Murdoch — died when Rupert was in his early 20s and left him a small Australian publishing company.

“My father firmly believed in freedom, and Lachlan is absolutely committed to the cause,” Rupert Murdoch wrote in a letter to the staffs of the two companies.

Murdoch’s message reads, in many ways, like a rallying call to his troops against so-called elites. The elder mogul has long seen himself as a provocateur, chiding news organizations he viewed as too bloated, too high-brow and too liberal.

For decades, Rupert Murdoch has fashioned himself as a counterbalance to the media establishment. He’s never shied away from using his outlets to influence politics and governments — in his native Australia, Britain and the U.S.

“The battle for the freedom of speech and, ultimately, the freedom of thought, has never been more intense,” Rupert Murdoch wrote in his letter. “Elites have open contempt for those who are not members of their rarefied class. Most of the media is in cahoots with those elites, peddling political narratives rather than pursuing the truth.”

In some ways, Murdoch’s letter also felt like a mandate to preserve his legacy.

There have been tensions within family, and the succession battle that played out behind the scenes was intense at times, providing fodder for HBO’s fictional drama, “Succession.” Some observers have openly wondered whether the final episodes of the real-life Murdoch succession saga have truly been written yet.

Although the elder mogul is pulling back from executive responsibilities at News Corp. and Fox, segueing into chairman emeritus, he retains the family’s controlling voting shares of the two companies through a family trust, according to regulatory filings. Rupert Murdoch has the voting control of the trust, through its investment vehicle.

Control of the trust will be passed to his four oldest children — Prudence, Elisabeth, Lachlan and James — after Murdoch dies. They will each have voting shares. Murdoch’s two daughters from his marriage to Wendi Deng each have a financial stake, but not voting shares.

The siblings, particularly Lachlan and James, haven’t always been aligned in business priorities or in politics.

James Murdoch served as chief executive of 21st Century Fox until its 2019 sale to the Walt Disney Co. After working 23 years in the family enterprise, he no longer had an executive role. Three years ago, James stepped down from News Corp.’s board, citing “disagreements over certain editorial content published by the company’s news outlets and certain other strategic decisions.”

For much of the last decade, Rupert Murdoch has been intent on entrusting Lachlan with the enterprise.

After he graduated from Princeton, the London-born Lachlan joined the family business in Australia, working at some of their newspapers. Within a few years, he was scaling the ladder at the company in the U.S.

In 1999, he was named head of the printing operations in the U.S. and served for a time as publisher of the New York Post during 9/11.

He abruptly resigned in 2005, after souring on the corporate politics and moved with his wife, Sarah, and their children back to Australia to build his own profile in media there.

In 2015, at his father’s urging, Lachlan returned to the U.S. to work alongside him in the company.

Fox credits Lachlan Murdoch with savvy business moves, including initially making an $11-million investment in the Australian real estate insights company, REA Group, in which News Corp. now has a majority stake. The publicly traded firm is now worth $8 billion, and News Corp. has a 61% stake.

While running Fox in 2020, Lachlan Murdoch championed the $440-million acquisition of Tubi, a free advertising-supported television streaming service, which is now one of the most popular in the country. This year, Bloomberg News reported that Murdoch turned down unsolicited offers of more than $2 billion for the service.

But the media landscape is particularly challenged, and it will be up to Lachlan Murdoch to steer the enterprise through those difficulties, including cord-cutting and declining ratings for linear television.

“The changes the media industry has been through, and will continue to go through, are monumental,” Verna said. “The biggest one is how do you monetize streaming as the cable bundle erodes? That’s not a small challenge, but it will be one that Lachlan will face.”