Intrigue in the house of Murdoch
New York Times reporter Jeremy W. Peters invests 2,400 words today in a Page One story delineating the “rift” between News Corp. CEO Rupert Murdoch and his son and heir apparent, News Corp. Chief Operating Officer James Murdoch.
If News Corp. were a normal company and Rupert Murdoch a normal father, readers might glean from this report that a real power struggle is going on for the future of the company. But News Corp. is not your normal company, Rupert is not your normal dad, and there really is no struggle going on for the future of the company, only a replay of the previous “rifts” that have opened between Rupert Murdoch and his two other children by his second wife Anna—Elisabeth and Lachlan. You see, Rupert sets his adult children up to smack them down.
The first of Rupert’s heirs apparent to suffer the public humiliation of a rift was Elisabeth. In 2000, when she was 31, she escaped the family business. A Guardian story from 2000 about her departure says she was “once tipped as a business successor to her father.” What rattled her was her father’s designation of Lachlan as the new heir apparent. The Guardian continues:
Ms Murdoch is understood to have been frustrated by the promotion of her younger brother, Lachlan, 28, within the corporation. Last year he was rewarded with a place on the six-strong board at News Corp—which has a 37.5% stake in BSkyB—becoming the only one of the young Murdoch clan to make it that far.
In an interview with the magazine Newsweek last year, Rupert Murdoch had indicated that Lachlan would eventually succeed him at the head of News Corp. Last month Mr Murdoch was diagnosed as suffering from “low grade” prostate cancer.
At Sky, Ms Murdoch is understood to have had turbulent relations with successive chief executives, Sam Chisholm and Mark Booth. The appointment of Mr Ball to the chief executive’s chair last year reportedly prompted Ms Murdoch to reconsider her future there.
In 2005, Lachlan likewise abandoned the heir-apparent track for daddy reasons and because, as Tom Scocca puts it in this 2005 New York Observer article, other News Corp. executives pushed him around. Scocca writes:
Reports of anger toward his father’s sometimes tyrannical rule were rife, and the elder Mr. Murdoch’s terse declaration that he was “particularly saddened” by his firstborn son’s decision to quit didn’t quiet them. …
Lachlan Murdoch reportedly chafed under the competitive power sphere of Peter Chernin, the News Corp. chief operating officer, to whom he had to report—a surrogate older brother to go with his real father.
Next into the scorpion bottle that is the Murdoch executive-training academy came James, who is 38. Rupert has groomed James for the News Corp. crown, as he had Elisabeth and Lachlan. But once again, something is going wrong with the ascension. The little prince(ss) is perceived as a little too grabby, a little too pushy, a little too grating, and is getting on the nerves of others in the company who push back by leaking anonymously to the press.
Reuters reporter Peter Lauria was onto the Rupert-and-James rift story two months ago, relying, as does the Times, on anonymous sources inside News Corp. to chart the crack-up of the latest heir-apparent. Give a listen:
News Corp’s senior management is starting to think about what the company might do if James Murdoch stepped aside, sources inside and close to the global media empire said. …
A third source close to the Murdoch family added, “There needs to be some kind of separation for James from this issue before he can run the company more broadly.” …
Three sources pointed to that comment as evidence that News Corp was at least considering life without James. …
… [T]he first News Corp insider characterized the move to New York as an attempt by the company to remove him from the line of fire in the UK, not as a logical step in his ascension. …
King Rupert could, of course, end the corporate gossiping about James with a few phone calls. He’s probably powerful enough to stop the former company officials from blasting their icky snark on James, as well. But the reason Rupert doesn’t stop the chatter is that he considers his qualified heirs to be expendable—just as long as he has enough of them around.
He happens to have them in abundance. News Corp. just bought Shine, Elisabeth’s production company, and she remains untainted by the phone-hacking scandal, which has swamped James. The Times quotes “a person who has known [Elisabeth] for years, speaking on the condition of anonymity to protect their relationship” saying, “She very elegantly or ruthlessly created a definitive separation for herself.” Lachlan is similarly clean, rested, and ready.
You’d think that James Murdoch would have figured this all out by now—that the king dreams for a continuation of the royal family but can’t commit to an heir because to do so would mark the end of his reign. Perhaps all the interfamily squabbling disturbs the adult Murdoch children, but the old man relies on their triple loyalties to the Murdoch family unit, their father, and the family company to keep them destabilized. There is no power struggle in the house of Murdoch. There is only Rupert Murdoch.
Tom Scocca figured out all of this in 2005, writing, “the only heir Rupert Murdoch has ever kept is Rupert Murdoch.”
I’m not obsessed with Rupert Murdoch, just interested. See this previous Reuters commentary about the Wall Street Journal Europe scandal and several years’ worth of Slate pieces. Let me know what you think of King Rupert via email: Shafer.Reuters@gmail.com. Monitor my Twitter for fair and balanced tweets. (This RSS feed rings every time a new Shafer column goes live. This hand-built one rings every time a correction is filed.)
PHOTO: News Corp Chief Executive Rupert Murdoch (L) talks to his son James Murdoch at Cheltenham Festival horse racing meet in Gloucestershire, western England March 18, 2010. REUTERS/ Eddie Keogh