James Murdoch’s News Corp Exit Leaves Brother Lachlan as Last Man Standing
(Bloomberg) -- With James Murdoch severing the final ties with the family’s media empire, his brother Lachlan -- a prodigal son of sorts -- is left as the last and most likely successor to their billionaire father Rupert Murdoch.
When James announced on Friday that he was leaving the News Corp. board -- after clashing over the company’s editorial direction -- it was just the latest step in distancing himself from the sprawling Murdoch operations.
The 47-year-old, who’d once seemed most likely to take over for 89-year-old Rupert as the head of the family business, is now focused on building his own collection of media and technology assets. And he’s increasingly willing to speak his mind about how the family’s companies, News Corp. and Fox Corp., are managed.
The split punctuated something that’s become more and more clear for several years: Lachlan, 48, is poised to take the reins when the time comes. For a family that inspired the hit HBO show, “Succession,” the final season appears underway.
“We’re grateful to James for his many years of service to the company,” Rupert and Lachlan, who serve as co-chairmen of News Corp., said in brief response to James’s departure. “We wish him the very best in his future endeavors.”
Lachlan was named chief executive officer of Fox Corp. after the company sold most of its entertainment assets to Walt Disney Co. in a $71 billion transaction last year. James had run the business before the deal, when it was known as 21st Century Fox. But when Lachlan was appointed CEO in 2018, James wasn’t even mentioned in the press release announcing the move.
Lachlan has taken a roundabout route to succession. He abruptly quit the family business in 2005 and set up an investment firm in Australia called Illyria Ltd. (a nod to Shakespeare from a Shakespearian family -- Illyria was the setting for “Twelfth Night”).
He had married the Australian model and actress Sarah O’Hare in 1999, and they had three children.
During the years of Lachlan’s exile, younger brother James climbed the ranks. He ran BSkyB in Europe and News Corp.’s media assets in the region, but a phone-hacking scandal in the U.K. hurt his reputation.
In 2014, Lachlan returned to the fold, taking senior positions at the newly split News Corp. and 21st Century Fox. The following year, he became Fox’s executive chairman. James was CEO of the company, but Lachlan was firmly back in the family’s good graces.
When Disney agreed to buy most of 21st Century Fox, including its movie studio, James’s future became less clear. There was speculation that he would become a Disney executive while Lachlan ran what was left of Fox.
Instead, he left to build an empire of his own. His investment firm, Lupa Systems, is the backer of media and technology businesses -- everything from a Norwegian drone company to a chain offering virtual-reality experiences in malls.
James and his five siblings stood to get about $2 billion each from a family trust after the Disney deal, and he’s reportedly looking to invest $1 billion in media properties.
On Monday, MCH Group Ltd., the parent of the Art Basel art fairs, said its board approved an investment by James’s firm that could have him owning as much as 49% of the business.
He’s also pursued opportunities that might run counter to the more conservative agenda of the family’s media outlets. James invested in Betalab, a firm trying to “fix the internet,” including addressing what some have called fake news.
And he’s become increasingly critical of the editorial direction at both News Corp. and Fox’s news channel.
James has said he doesn’t watch Fox News, and he’s taken issue with News Corp.’s coverage of wildfires for downplaying global warming. Last year, he praised Democratic presidential contender Pete Buttigieg and recently donated $615,000 to a fund supporting the campaign of Joe Biden, the party’s presidential nominee.
The family divide extends to where the brothers have settled. James lives in New York, while his father and brother are based in Los Angeles. In fact, Lachlan paid a California record of $150 million for Bel-Air estate that was once featured on “The Beverly Hillbillies.”
Rupert remains chairman of both Fox and News Corp., which owns the Wall Street Journal and the New York Post. But it’s Lachlan who is now tasked with steering a course for a slimmed-down Fox -- still the family’s crown jewel but slammed by the pandemic and the blackout of sports. Major League Baseball and other leagues have now made a shaky return, and advertising has begun to bounce back.
“Fox is in a strong position to weather this turmoil,” he said during an earnings call in May. The executive will give his latest outlook after the company reports its results on Tuesday.
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