Murdoch son looks to life after Fox
As family pursues deal with Disney, younger son and CEO James is left in corporate no-man’s land.
It wasn’t too long ago that James Murdoch was poised to preside over a global media empire, a dynasty built by his famous father over more than a half century.
But now, the younger Murdoch is facing a crossroads — just like the media company controlled by his family.
Rupert Murdoch stunned the industry late last year by putting much of his entertainment company, 21st Century Fox, up for sale. The 87-year-old tycoon — who has long prided himself as a media disrupter — concluded that Fox was too small to effectively compete in the 21st century. He made a deal to sell the bulk of the company to Walt Disney Co. for $52.4 billion.
Fox then announced, earlier this month, that Murdoch’s older son, Lachlan Murdoch, would become chief executive of “new Fox,” a spin-off that will be composed of the assets that Fox doesn’t sell to Disney. That includes the Fox News Channel and the Fox broadcast network.
Those moves left James Murdoch, 45, who has served as Fox’s chief executive for nearly three years, in a corporate no-man’s land. Initially, there was speculation that he might land in Burbank, but in March, Disney Chief Executive Bob Iger unveiled a streamlined management structure that left little room near the top for an outsider.
James Murdoch now is contemplating life beyond Fox after working nearly 23 years in his father’s company. This week, at the Code
media conference in Rancho Palos Verdes, Murdoch was coy on what he might do next.
“At the right time, I’ll think about something new... but I really don’t know yet,” Murdoch said. “I’m really focused on trying to land the plane. When you have a big transaction like this, it’s not entirely straightforward.”
Enter Comcast Corp. The ink seemed dry on Disney’s deal for the bulk of the Fox assets, but Comcast announced last week that it was in “advanced stages of preparing” an offer, in an allcash bid that Comcast said would be “superior” to the Disney offer.
Fox, nonetheless, is forging ahead with its agreement to sell its assets to Disney. On Wednesday, Fox said it has scheduled a July 10 vote to gain shareholders’ approval for the sale.
That means Comcast must work fast if it wants to scoop up the prolific 20th Century Fox film and television studios, 22 regional sports networks, FX, National Geographic channels and key international television properties in Europe, India and Latin America. Comcast already owns NBCUniversal.
Fox’s board of directors recommended that stockholders approve the Disney bid, Fox said in its Wednesday statement. It also said the company might have to postpone the July 10 vote should there be new information for shareholders to
consider — such as a higher bid from Comcast.
Speaking in Rancho Palos Verdes late Tuesday, James Murdoch (who is also a Fox board member) outlined why his family decided to part with much of the company they have spent much of their lives building — and why they selected Disney over Comcast, which made an offer last fall when Disney was courting Fox.
“What we’ve been able to build at 21st Century Fox is genuinely unique,” Murdoch
said. “It’s why people are interested in it. If you want to be a global company, if you want to produce high-quality content at a high volume.”
Under the Disney allstock deal, Fox shareholders would become shareholders in Disney. The Murdoch family — which controls 39% of Fox voting shares — would become one of the largest individual shareholders, with about 5% of Disney’s stock.
“We think the prospects for the new firm are very strong,” Murdoch said. “And we think from a regulatory perspective … you have a higher certainty” of gaining approval from the government.
But some analysts have suggested that the Comcast offer, should it materialize sometime next month, might have advantages, too. Wall Street initially was enthusiastic about the prospect of a bidding war, but shares of the three companies this week have remained steady.
Fox shares closed up 1 cent, to $38.66, on Wednesday. Disney shares gained 29 cents, to $99.98. Comcast, which has seen its stock plummet more than 15% since news of a potential bid, slipped 3 cents, to $31.48.
Fox and Disney have estimated that it will take at least 18 months to win regulatory approval for the Disney
takeover, meaning the deal wouldn’t be done until mid- to late 2019.
The Murdoch family would still control the company composed of assets that do not go to Disney, which in addition to the Fox News Channel include the Fox Business Network, Fox broadcast network, Fox Sports channels and a chain of television stations.
James Murdoch has long been viewed as the more ambitious of the two brothers. Born in London, he grew up in the U.S. and attended the prestigious Horace Mann School in New York City. He went to Harvard University, then dropped out. In the mid-’90s, he became something of a rap music mogul, running a label called Rawkus Records.
But in 1996 his father’s company bought out Rawkus Records and James Murdoch joined the family business. Over the years, he has run parts of its international business, including in Asia and Britain, before getting tarnished by the 2011 British phone hacking scandal at the Murdochs’ British tabloids. That scandal sidelined his career only briefly.
By 2015, he had stepped into the role of CEO.
During the last three years, James Murdoch has worked to bring Fox management and businesses into a new era, bulking up on
sports properties and encouraging the promotion of women. He has provided leadership at crucial times, such as when the Fox News Channel was embroiled in a sexual harassment scandal: James and his brother Lachlan helped persuade their father that the founder of Fox News, Roger Ailes, must go.
Last year, they fired star anchor Bill O’Reilly after it became public that he had made several settlements for sexual harassment.
Lachlan Murdoch is more aligned with his conservative father, according to people who know both. He also shares his father’s interest in newspapers.
At times, James Murdoch has seemed a bit out of step — uncomfortable with the conservative orientation of Fox News, particularly last summer when President Trump refused to criticize white nationalists in Charlottesville, Va.
James Murdoch in August donated $1 million to the Anti-Defamation League. On Tuesday, he called neo-Nazis marching in Charlottesville and Boston “very scary.”
“It was trying to lead by example,” Murdoch said of his well-publicized donation to the group, but added, “I try to keep my politics separate from the business.”
Murdoch stressed that Fox has great diversity in its
programming and at its channels, including Fox News. “Between Sean Hannity and Shep Smith — that’s a big spectrum,” Murdoch said.
But he tried to steer away from a question about Trump’s consumption of Fox News.
“Well, I couldn’t possibly comment on the president’s television habits,” Murdoch said. Then he alluded to a discussion earlier in the afternoon when a member of Trump’s administration — Linda McMahon, the head of the Small Business Administration — spoke at the conference.
“According to the head of the Small Business Administration, he’s working so hard that he couldn’t be watching that much cable TV,” Murdoch said, rolling his eyes.
But Murdoch stressed that Fox was more than Fox News, and that its businesses include “a diversity of voices.”
“So, while I’m not going to agree with everything that goes on, every single channel that we own or what every producer makes, I’m also very proud of the diversity that we foster from National Geographic to FX to Fox News to the Deadpool movie last week,” Murdoch said. “They’re great.”