Lachlan Murdoch Wants the Drama to Be Onscreen at Revamped Fox

(Bloomberg) -- Lachlan Murdoch’s Los Angeles office is nestled in a turquoise-and-white edifice that’s steeped in Hollywood history. Building 88 on the Fox studio lot is where the legendary Darryl Zanuck greenlit the first “Planet of the Apes” and produced films like “How Green Was My Valley.”

But the oldest of Rupert Murdoch’s sons won’t be a movie mogul as chief executive officer of Fox’s new incarnation. After Walt Disney Co. completes its $71 billion purchase of 21st Century Fox Inc.’s Hollywood assets next week, the renamed Fox Corp. will limit its focus, at least in the near term, to the domestic market for television news, sports and entertainment. That’s in contrast to the global interests of 21st Century Fox, which included India, the U.K. and a swath of international channels.

While the new Fox will be driven by live sports and its ratings-leading Fox News, Lachlan Murdoch wants to build on the company’s entertainment business and increase its output of scripted programs, according to people familiar with his plans. Fox is already expanding production under the leadership of Charlie Collier, head of entertainment for the namesake broadcast network. He joined last year from AMC Networks Inc., where he oversaw the development of such shows as “Mad Men,” “Breaking Bad” and “The Walking Dead.”

The company may make acquisitions that expand its existing assets, in areas like production and new domestic or international sports rights, said the people, who asked not to be identified discussing the plans.

Close Attention

Investors and followers of Rupert Murdoch’s dynasty will closely watch how the 47-year-old Lachlan deploys the smaller, nimbler company with its estimated $2 billion in annual earnings. The company announced its management lineup last year.

The new Fox sees itself as a startup, with the kind of underdog ethos that longtime Murdoch employees have described as typical of the octogenarian newspaper baron. But it’s well-funded, and has appealing assets like rights to National Football League games, baseball’s World Series, and, this fall, wrestling, with WWE’s “SmackDown Live.”

Fox executives plan to use the newly acquired sports as a powerful springboard for the launch of new shows, helping to reinvigorate the company’s entertainment programming.

Without 20th Century Fox, Fox Corp. will have the advantage of not being tied to content from its own internal studio and is already doing deals with new producers. Last month, it launched SideCar, an accelerator for internal development projects and ones that may be sold to third parties.

Broader Appeal

One of the changes viewers are likely to notice is shows that impact pop culture and have broad appeal, rather than more niche programs like “Scream Queens.” An early example is the Tim Allen sitcom “Last Man Standing,” which found new life on Fox after Disney’s ABC canceled it. Among the new shows the network has commissioned is a soapy Southern dramedy featuring Kim Cattrall.

Fox is also going after animation as a ratings driver, with the family comedy “Duncanville” from Amy Poehler set to run alongside its stalwart “The Simpsons.” Also in production is an animated series called “Bless the Harts,” featuring Kristen Wiig and Maya Rudolph, about a group of Southerners striving to live the American dream.

Fox Corp. will pursue its new endeavors with a far lighter payroll, with about 7,000 of the 22,400 people that 21st Century Fox had in June, according to a person familiar with the plans. The balance of employees will transfer to Disney, which is expected to make cuts as part of $2 billion in announced cost savings that the company said would result from the deal. Disney declined to comment.

No Reunion

A deal that won’t happen anytime soon is a Fox combination with News Corp., which owns Murdoch publishing assets including the Wall Street Journal, despite the 88-year-old magnate once suggesting he was open to the idea, according to the people. The two companies were split in 2013 after a phone hacking scandal at News Corp.’s U.K. publishing operations threatened to engulf the old conglomerate.

While Fox News operations will stay in New York, most of the new Fox will be in Los Angeles. Key television executives like Fox Television Stations CEO Jack Abernethy have moved to the West Coast. Lachlan Murdoch is in his fourth year as an Angeleno since moving from Australia to become executive co-chairman of 21st Century Fox in 2015. However, he still visits New York almost weekly.

Lachlan’s younger brother, James, was CEO of 21st Century Fox, but established an investment fund this year and won’t have a role at Fox Corp.

After the Disney deal closes, 46-year-old James and his five siblings will receive distributions from the Murdoch family trust, which holds Rupert Murdoch’s interest in 21st Century Fox, people familiar with the plan said last month. The result is that, despite the expectations of investors, none of the individual family members will hold a large position in Disney shares.

--With assistance from Nabila Ahmed.

To contact the reporter on this story: Anousha Sakoui in Los Angeles at asakoui@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III, Rob Golum

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