(Bloomberg) -- The news that July day in 2005 sent shockwaves through corridors of power around the world: the crown prince of the Murdoch empire was out.
Seemingly out of the blue, Lachlan Murdoch, then all of 33, had abdicated as the heir apparent to one of the world’s most powerful media dynasties. His father, Rupert, it seemed, would have to look elsewhere for his successor.
Few might have predicted that now, more than a decade later, the hopes of Rupert Murdoch -- and the future of 21st Century Fox Inc. --- would once again rest on his elder son Lachlan. Few outsiders, in fact, see a viable alternative.
Today Lachlan Murdoch is the subject of more speculation in media circles than he ever was before. While his father, now 86, has groomed him for the top job, Lachlan has never independently run anything as big and complicated as what is being billed as the “new Fox.” He now seems all but certain to assume the helm after his brother, current Fox CEO James Murdoch, sees through a $52.4 billion asset sale to Walt Disney Co. over the next 12 to 18 months. The question -- for the global media and investors alike -- is what will happen then.
“I don’t see an obvious other choice,” said Rich Greenfield, an analyst at BTIG LLC.
Even though it will be much smaller, the new Fox will still house a broadcast network, a top sports channel and a cable-news outlet that’s the most watched in America -- and in the White House. He’ll be responsible for maintaining Fox News’s influence while smoothing its rougher edges, as he did by implementing policy changes after the sexual-harassment scandals of Roger Ailes and Bill O’Reilly.
“It is very hard
to judge him because he has not made major executive decisions,” said Claire Enders, founder of Enders Analysis Ltd. in London. “His capacities have not been tested as much as those of James.”
His Own Man
To be sure, Lachlan led Fox alongside his father and brother through a tumultuous period, with new competitive threats like Netflix Inc. Just 15 months older than James, Lachlan will be the one to choose whether to take the job as CEO of the new Fox no matter his father’s wishes, according to people familiar with the company’s plans. He’s already transplanted his family from Australia to Los Angeles, and he’s unlikely to want to move them again to New York, where Fox is based.
Lachlan’s decision to quit as deputy chief operating officer of News Corp. in 2005 came after his father sided with Ailes and then-president Peter Chernin on programming decisions. Lachlan decamped to Australia, where he had met his wife when he ran News Corp.’s businesses there back in the ’90s.
He embraced his love of spearfishing and mountain climbing, bought a mansion in upscale Bellevue Hill and established Illyria, an investment fund whose successes included an investment of about $200 million in radio-station operator Nova Entertainment Group, now worth about $800 million.
News Corp.’s board pushed in 2012 to sell its stake in another company Lachlan had championed, REA Group Ltd., which offers real estate listings in Australia online. He fought back and won. The value of the holding has more than tripled to $4.92 billion and now generates more than a third of News Corp.’s earnings.
Back in the Fold
Lachlan remained a director of News Corp., which split from Fox in the 2013 restructuring after the British phone-hacking scandal that rocked the Murdoch empire.
Persuaded by his father to return in 2014, he now shares chairman duties at both entities with Rupert. James is likely to leave Fox after the Disney deal, possibly for a position at Disney or to start his own venture.
Lachlan has been playing an increasingly public role, leading earnings calls and shareholder gatherings. The London native frequently doesn’t look the corporate-honcho part. In 2016, at the Allen & Co. conference in Sun Valley, Idaho, he sported a busy beard, mirrored shades and shirts that displayed the tattoo enveloping his left forearm. At Fox’s annual meeting last year, he showed up with a shaved head.
People describe him as disarmingly charming and easy to talk to. After his deal for Nova, he made a point of shaking hands and welcoming more than 400 new employees, one person recalled.
But executives who worked with Lachlan in Australia described him as uncomfortable with conflict. Siobhan McKenna, managing partner of Illyria, is known to handle negotiations and execute tough decisions on his behalf, the executives said.
Ten Network Holdings Ltd., the TV network he invested in and led as chairman, became a black mark for Lachlan last year when he lost a bidding war for the company to CBS Corp., costing Fox a distribution partner in Australia. The company was auctioned after Murdoch and another investor decided not to continue to back the company’s credit facilities, leading the network to place itself into administration.
Since his return to a senior role at Fox, Lachlan has helped steer the development of online-TV service Hulu and the expansion of Indian network Star Sports. The Disney deal has sent shares soaring to a four-year high. Since Fox is selling its television studio, Lachlan will likely be charged with developing new production capabilities and investments in original programming to continue the broadcast network’s rebound after falling behind in the ratings last year.
For Fox News, Lachlan may be a more sympathetic leader than James, the liberal in the Murdoch circle. Lachlan hasn’t made public his views on global warming, the Trump administration or much else in the political realm. He has given money to Australia’s conservative Liberal Party. But he also signed a letter with James criticizing Trump’s ban on immigrants from Muslim countries, and he’s led reforms at Fox News to create a more welcoming environment for women.
“His father is perhaps not expecting Lachlan to do more than support him,” Enders said. The question is whether that’s enough to satisfy Lachlan.
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