Rupert Murdoch is handing the reigns of his media empire over to his son James. While an 84-year-old stepping aside isn’t particularly surprising, who would take over and the structure has long been a topic of speculation.
The Guardian had these details about the changes in a story by Rupert Neate:
Rupert Murdoch has confirmed he will stand down as chief executive of 21st Century Fox at the end of this month, handing over control of empire to his son James.
Murdoch, 84, who is currently chairman and CEO of the company, will become executive co-chairman alongside his eldest son Lachlan. The management changes, which had been expected, were approved by the company’s board in New York on Tuesday.
“It has always been our priority to ensure stable, long-term leadership for the company, and these appointments achieve that goal,” Rupert Murdoch said in a press release. “Lachlan and James are each talented and accomplished executives and together, we, as shareholders and partners, will strive to take our company to new levels of growth and opportunity at a time of dynamic change in our industry.”
In a joint statement, Lachlan, 43, and James, 42, said: “We are both humbled by the opportunity to lead, with our father and the talented team of executives at 21st Century Fox, this extraordinary company.”
Dorothy Pomerantz wrote for Forbes that James will have a lot of work in front of him:
James Murdoch is taking over the company at a particularly volatile time for media. Streaming companies and an expanding global audience are changing the game for studios and the giant companies must try to be nimble in order to keep up. Rupert Murdoch had the changing landscape in mind when he made an $80 billion bid for Time Warner last year. The combined studios would have had an unprecedented about of box office power with franchises like X-Men, Batman, Harry Potter and Planet of the Apes all under one roof along with Fox broadcast network, FX and HBO.
But Murdoch’s advances were rebuffed leaving the studio standing on its own (very substantial) legs. While Fox ended 2014 as the highest-grossing studio at the box office with $1.79 million, it lacks the franchise power of Warner Bros. and Disney. Each of those studios owns entire comic universes (DC at Warner Bros., Marvel at Disney). While Fox has the rights to the Marvel X-Men, it could use some more franchises to secure its position. In 2015 the studio’s biggest hit to date is Home, an animated film produced by DreamWorks Animation and released through Fox. Home has brought in $367 million globally. Universal’s Jurassic World, by comparison, earned $500 million globally its first weekend in theaters.
The reason franchises are important today is that it gives a studio the basis for endless spin-offs, both at the theater and on the small screen (as well as in video games, books and rides). Fox, with its many different divisions, is well-positioned to take advantage of some big franchises, it just needs to secure them.
Many were wondering what would happen to Chase Carey, Rupert’s advisor. Jennifer Saba wrote for Reuters that Carey would stay for the next year to help with the transition:
Fox said that all corporate functions including the company’s TV and film divisions will report jointly to James and Lachlan.
While James and Lachlan are said by company sources to have a good relationship and approach the business as partners, the duel-reporting line could prove to be confusing to management.
Carey confirmed he is staying with the company to help support the Murdoch brothers. That will no doubt calm some investors, who want the highly regarded executive and a non-family member to remain with Fox.
Carey, 61, has been the company’s president and chief operating officer since 2009 and will serve as its executive vice chairman through June 30, 2016, when his contract ends.
Shareholders have warmed to the idea of James and Lachlan taking a bigger role with Fox. In 2013, the vast majority of independent investors did not vote for James and Lachlan as directors.
The tide turned in 2014 when only 24 percent of independent stakeholders opposed the board nominations of James and Lachlan.
The Murdoch-owned Wall Street Journal reported in a story by Keach Hagey that Fox News chairman Roger Ailes will also report to both Lachlan and James:
Roger Ailes, the chairman of Fox News, who in the past had reported directly to Rupert Murdoch, will also report to Lachlan Murdoch and James Murdoch. “Roger will report to Lachlan and James but will continue his unique and long-standing relationship with Rupert,” a company spokesman said.
James Murdoch will be based in New York; Lachlan Murdoch will be based in Los Angeles.
Rupert Murdoch split up his media empire two years ago, with the entertainment assets going to 21st Century Fox and the publishing assets, including The Wall Street Journal, going to News Corp. The Murdoch family has a 39% voting stake in both companies.
And control isn’t going to shift away from the family, but at least the questions about who will run the companies have been resolved. It will be interesting to see what Lachlan and James will change now that they have full control of the empire.
