Lachlan Murdoch has appointed his buddy, George Betsis, as a director and his representative on the family company, Cruden Investments. Lachlan's three siblings have also just resigned as directors and appointed equally unusual nominees to represent them in the company that holds the 31 per cent Murdoch family interest in News Corporation.
All this activity is part of the Murdoch family's reorganisation of Cruden, the company set up to house the family's assets in 1947 by Sir Keith Murdoch when his only son, Rupert, was a boy of 16. Cruden has been reshaped in a way that accommodates the new family arrangements - Wendi Deng in, Anna Murdoch out - and follows the final pounds 125 million payment in February to the families of Rupert's sisters, Janet, Helen and Anne, including their 14 children. That makes a total of about pounds 320 million that Murdoch has paid over the past seven years to buy his sisters out of their News Corporation ownership.
This story really starts 52 years ago when Sir Keith created Cruden Investments and named it after his wedding gift to his young bride Elisabeth, the 36-hectare Cruden Farm at Langwarrin, near Melbourne. It was a bad time for Sir Keith: he had been told he had cancer of the bowel and had to be operated on immediately. His health deteriorated over the next few years.
Showing a keen sense of symmetry - if not of history - Rupert Murdoch has placed his four children in the position of controlling Cruden Investments, and the related family company Kayarem (named after Murdoch's three initials), as part of the group of companies that controls News Corporation, the fifth-largest media company in the world. The ultimate beneficiaries of the top company in the structure are through what Rupert Murdoch has called "unbreakable trusts for the children", the AE Harris Trust.
Dame Elisabeth Murdoch is a beneficiary outside that trust, holding an entitlement - shared with her son Rupert - in a 10 per cent stake of Cruden Investments through the suitably anonymous-sounding Actraint 119 company.
Ultimately, Rupert will inherit this entire 10 per cent, and that will be his main entitlement, held outright and able to be passed on to to any as yet unborn offspring. Another 41 per cent of Cruden Investments is held by the Kayarem company, which is in turn owned by the AE Harris Trust, whose assets all pass to the four Murdoch children.
The remaining 49 per cent of Cruden Investments was owned by the rest of the family, but has, as a result of the settlement achieved earlier this year, been bought out, mainly using borrowings, as the market value of News Corp shares (given as security) soared over the past seven years. So where does this leave Rupert's ex-wife, Anna Murdoch? She married 72-year-old Florida businessman William Mann earlier this month in New York and her only remaining involvement after the divorce settlement in June this year is as director of the Murdoch Family Foundation. This fine-sounding charitable trust was set up in 1994, and has been active in supporting inner city causes in New York and Los Angeles.
Anna Murdoch's settlement has been mooted at a minimum $US150 million (pounds 90m), plus property. Anna is also believed to have ensured, as part of her divorce settlement, to somehow have a say in the succession planning for the firm, that would make it difficult for any child from Rupert's new marriage to usurp the roles of her children and that of first-born Prudence from Rupert's first marriage.
Meanwhile, Cruden Investments has been remade. A couple of months ago, each of Murdoch's offspring - eldest daughter Prudence, first son, Lachlan, and his siblings Elisabeth and James - appointed their own nominees to the board of the family companies.
The arrangements were put in place just after the surprise marriage of Rupert to Wendi Deng. It would appear, however, that any offspring from that union will be taken care of through Murdoch's individual entitlements, without diluting those of his other children.
The next Murdoch generation's nominees are eclectic indeed. For 28-year- old Lachlan Murdoch it is the Sydney adman George Betsis, a creative director who sailed with Lachlan on his boat Karakoram in 1997 in the first Sydney-Hobart yacht race the young media mogul took part in, along with film-maker, Baz Luhrmann, futures trader, Joe Cross, and Lachlan's American friend, Zeb Rice.
Lachlan's divorced big sister, Elisabeth, 31, has chosen English television producer Henrietta Conrad as her Cruden representative. Conrad, and her partner in Princess Productions, Sebastian Scott, have been described in the press as "youth TV Svengalis''.
Another of the UK-based representatives on the Cruden board is 44-year-old investment banker, Richard Oldfield, who is the nominee of Prudence, the daughter from Rupert's first marriage to the late Patricia Booker. Oldfield alone among the Murdoch siblings' representatives is on the record with strong views on the media. In a letter two years ago to the editor in The Daily Telegraph about the subject of privacy, Oldfield noted that "photographers and writers are only doing what they think their editors want. Editors are doing what their proprietors want. So the only people who can stop this ghastly prurient intrusiveness, and conjectural criticism, are the proprietors."
The youngest of the representatives is, appropriately, a contemporary of James Murdoch's, the 26-year-old Jesse Angelo, whose address is given as the News Corporation building in New York. There seems to be no legal rationale for the decision to appoint nominees as directors of the family group of companies. Company insiders suggest the arrangement is a way of lessening any direct conflict between the siblings in the future.
This would allow them to deal through an emissary in times of tension. Despite ongoing succession talk, each of the children has been at pains in interviews in the past two years to emphasise that theirs is a harmonious family.The gregarious James Murdoch, who is regarded by some people inside News Corporation as the son most like his father, emphasised in a recent interview that it was a "very close family" without "backstabbing and rivalry". Pre-nuptial agreements, signed in America where the laws governing them are more forceful than in Australia, are understood to be a feature of each of the Murdoch children's marriages. This includes Lachlan's union with the model, Sarah O'Hare, and the upcoming marriage of James Murdoch to the model, Kathryn Hufschmid.
Meanwhile, the extended Murdoch family no longer has any entitlements to the News empire. The latest settlement saw the last of the pounds 320 million paid to the family groups of each of Rupert's three sisters - the Handburys, the Kantors and the Calvert-Joneses. That was shared among Rupert's 14 nieces and nephews.
It might seem like a lot of money, but the pounds 320 million spread around the family should be taken in the context of the total pounds 3.7 billion Murdoch inheritance. The deal struck between them and Uncle Rupert clearly did not deliver the family the full value of the News Corporation empire as its stands today. The terms were agreed at a time when News had just come back from the brink. The payout arrangements, of which clues are provided in the Cruden Holdings company articles, contain an "escalator" with a time value.
A "floor" price protected the family members from the downside, which meant that in the event of a collapse they would get a preferential payout. This was something that was fresh in their minds in the early Nineties when the fate of the empire was in the balance. Equally, they would not get the benefit of all of the increase in the value of News Corporation.
According to one insider, this arrangement has disenchanted one prominent member of the family, Murdoch Magazines publisher Matt Handbury, known disparagingly as the Man From Uncle. (He bought The Australian magazine assets from his Uncle Rupert in 1991). Associates say he was grizzling earlier this year, after pocketing his share of the last pounds 125 million settlement, that Rupert should have paid the pounds 40,000 in stamp duty.
Nonetheless, Matt's mother, Helen, remains Rupert's favourite sister. Several years ago she and her husband, Geoff, took all the money owing to them from selling their Cruden shares. Those family members who elected to sell out early, of course, received less than they would have if they had stayed for the whole seven-year term.
As Dame Elisabeth noted, reflecting on what she expected of the growing family in the future in a recent biography: "The grandchildren are all very comfortable... Rupert has seen to it that they have all had opportunities. Some have done very well. Some have done not quite so well. Rupert's been very thoughtful and very caring to all the children." Indeed, where would they all be without Uncle Rupert.
Emilya Mychasuk is business editor of `The Eye' magazine in Sydney, AustraliaReuse content