Stephen Glover: The 'Sun King' is 77 and he can't go on for ever. But can his children keep the empire?
Monday 01 December 2008
What will happen to Rupert Murdoch's vast media empire when he dies, or goes senile? According to a new biography of the tycoon by Michael Wolff published this week, there could be a deadlock among his children, who will control the trust that owns 38 per cent of News Corp.
Mr Wolff reveals an agreement which gives voting control over the trust to Mr Murdoch's four eldest children – James, Lachlan, Elisabeth and Prudence. He suggests that "a two-to-two vote means absolute deadlock in the affairs of one of the world's largest companies". According to a family friend quoted in the Financial Times, however, the four children do not believe they need "legal deadlock provisions" and will always be able to thrash out their differences. Maybe they will. Or maybe they won't.
Murdoch also has two young children by his third wife, Wendi – Grace, aged seven, and Chloe, aged five. Mr Wolff quotes Mr Murdoch as saying that Grace and Chloe might acquire votes in the trust "when they are 25 or 30 or something". Wendi seems a pretty hard nut, and will certainly be pushing for her offspring to acquire the same rights as the media tycoon's four elder children by his two earlier marriages.
One way or another there is certainly scope for conflict and disagreement. The elder four could split two-two on important issues. The younger children might be a disruptive force if they acquire votes, though they would be outvoted if the other four stick together. Perhaps one of the world's largest media companies will be controlled by feuding siblings, a real-life version of those rollicking 1980s soap operas Dallas and Dynasty.
But is it realistic to suppose that the children can maintain control of News Corp with their 38 per cent stake? Rupert Murdoch does so by being Rupert Murdoch. Through force of will and charm and ruthlessness, he is the person who has put together this sprawling and ramshackle empire ranging from The Sun to the Wall Street Journal to the publisher HarperCollins to Star TV in Asia. He alone makes sense of it. But even he has had to fight interlopers wanting to seize control of News Corp, most famously a businessman John Malone, eventually seen off last year.
Is it really likely that the children – presumably with James Murdoch as chairman and chief executive of News Corp – will be able to keep this empire intact? In Britain all the great newspaper dynasties have fallen apart except for the Daily Mail and General Trust, still run by Lord Rothermere, whose great, great uncle Lord Northcliffe started the Daily Mail. He is able to maintain control of the British-based DMGT through his own shareholding, but can four or six Murdoch children hold together a much larger transnational media company?
I very much doubt it, though obviously no one can predict the rate of disintegration after Mr Murdoch's demise. The subject is not an academic one. The "Sun King" is 77, which even today is a fair age for the head of a vast company. Many observers are so awed by Mr Murdoch's achievements that they somehow assume that he will go on for ever. He won't.
In his biography Mr Wolff paints a portrait of a man in some ways still at the height of his powers who operates by a kind of gut instinct while having a weak grip on the past. In an article in last week's Spectator, Mr Wolff wrote: "Most men of accomplishment ... cherish all their achievements. Murdoch hardly remembers his. The past has receded. He cuts himself off from it. In conversation he often loses or transposes decades. This is partly age. More to the point, he obviously has no use for memory."
Only "partly age", perhaps, but this is a description of a man who alone holds the key to the vast, mysterious empire he has created, and cannot explain to any other mortal how, or why, it works.Independent's move to Kensington is a show of faith in the paper's future
Much ink has been spilt recently on the subject of The Independent's future during these appalling economic times. Will Sir Tony O'Reilly hang on to it? Does it even have a future? My esteemed colleague Roy Greenslade has even made the lunatic suggestion that the paper go entirely online, apparently unaware that the internet produces very little revenue and a newspaper which existed only in that sphere would be unable to support a large journalistic staff.
Last Friday's announcement that the two Independent titles are relocating to Northcliffe House in Kensington, headquarters of the Daily Mail, suggests to me that Sir Tony has no immediate plans to sell. Rather, there is a hard-headed attempt to reduce costs.
A couple of weeks ago, cuts of £10m were announced. The move to Northcliffe House will produce further savings, as well as putting some useful cash in the pocket of Associated Newspapers, publisher of the Daily Mail, the Mail on Sunday and the London Evening Standard, which happens to have spare office space. These titles and the Independent papers will share back-office services such as switchboard, security and canteen facilities (which I can personally vouch are not bad). Further down the line one can imagine Associated printing and distributing the Independent titles. Commercially and editorially, however, they will remain separate.
Will there be some high-minded Independent journalists who will not relish passing the bust of Lord Northcliffe, founder of the Daily Mail, every day? I hope not. They might like to know that my old comrade-in-arms Andreas Whittam Smith, the founding editor of this newspaper, once said to me that "Northcliffe was of course the greatest of them all". Surely they will see the benefits of sharing services with what is probably Britain's best-run publishing company. And they can hardly deny the advantages of working in pleasant offices in High Street Kensington, rather than the current much less agreeable premises in Docklands.
Three weeks ago, I undertook, in the event of the Daily Mail and General Trust, Associated's parent company, buying the Independent titles, to eat a copy of the Daily Mail and a copy of The Independent in front of witnesses, my only proviso being that I could choose any proprietary sauce or garnish. I think my wager is safe. I do not propose even to nibble a features page by way of experiment.
The future, of course, may yield more interesting developments. What can be said now is that the owners and management of the Independent titles evidently believe in their future.
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