With Disney deal looming, Murdoch’s empire fractured
IN LATE summer, Verizon Communications came to Rupert Murdoch with a surprise acquisition offer. Verizon – locked in battle with AT&T, which was then finalising its $85.4 billion takeover of Time Warner – wanted to buy pieces of 21st Century Fox, Murdoch’s television and film conglomerate. Representatives of the two companies secretly met at least once to discuss a merger.
Murdoch, 86, shrugged off the talks as uninspiring, according to an associate, who spoke on the condition of anonymity. Verizon declined to comment, but the overture prompted Murdoch to start to think seriously about selling his Hollywood treasures.
Several months later, Murdoch agreed to sell much of 21st Century Fox to the Walt Disney Company. The proposed $52.4 billion deal, which is subject to regulatory approval, has the potential to reshape the entertainment world, but it also has many wondering what the future holds for Murdoch and the two sons who seemed to be on the cusp of taking over his vast media holdings.
In recent years, Murdoch had moulded a succession plan that handed his businesses to both sons. In 2015, he named his elder son, Lachlan, executive co-chairman, giving father and son equal standing. He had installed his younger son, James, as chief executive of 21st Century Fox.
But at times, James had grumbled that his role as chief executive was limited, according to three people who know him who spoke on the condition of anonymity. His father did not relinquish much control and became more involved with the company’s most important asset, Fox News.
Fox News has been the source of family friction. James, who holds some progressive views, has privately expressed embarrassment about some elements of Fox News, according to the three people who are friendly with him, a stance not shared by his more conservative brother and father.
To Hollywood, the Disney deal looked like a family schism, with Lachlan, 46, solidly back in line to succeed his father as over- seer of the family’s remaining businesses and James, 45, without a clear future at Disney. Associates of James, however, say that he is encouraged the deal, in part because he had grown weary of the dysfunctional push and pull with his brother and father.
“He will be integral to helping us integrate these companies over the next number of months,” Robert A Iger, Disney’s chief executive, said of James after the deal was announced.
James is likely to emerge with a stake in Disney worth at least $1 billion.
“That’s a good return for putting up with your father for 20 years,” said the London-based analyst Claire Enders.