AUSTRALIA
THE MURDOCHS
A Winning Streak - Part 3
Despite her aspirations, Rupert has told his daughter that Lachlan, as the eldest of his sons, should be considered 'first among equals'. In 2000, apparently frustrated with her father's chauvinism, she left the company and set up her own British-based production house, shine. Rupert says he is welcome to return to the family business '[whenever she chooses'. Perhaps Elisabeth feels there is no point unless she's treated on a parallel with her brothers. Elisabeth's mother Anna has supported her daughter's move out of News corporation. 'My mother would exercise her anger towards my father and say, "Good for her. At last!" Perhaps Anna feels her daughter will have more freedom to prove herself as the CEO of a small company, shaped in her own image, rather than have limited power in a major corporation shaped by her father. Rupert says of Elisabeth's new venture,
'If it is a bit of a success she'll probably sell up for hundreds of millions of dollars and may be come back into the company. She has not given up her ambitions by any means to play a part in the company.' As an unashamed nepotist, Rupert has engineered his children's, and in particular his sons' rise through the company. However, Rupert's dynastic dreams sit awkwardly with his own self-interest in further elevating the company with himself still king. All Rupert's life his energies have been directed to the next business gamble, now he can't give it up. unlike hi father, Rupert hasn't been able to tackle the issue of his own mortality and smooth the way for the media crown and sceptre to be handed to one of the prince regents. By Rupert's own optimistic reckoning, he'll still be working at the age of a hundred. Rupert is a gamble, not a natural manager, and he hasn't been able to settle down and consolidate his creation.
During the 1990s Murdoch's global ambitions expanded, but the family shareholding in News corporation declined. Rupert has come to rely on alliances to help find his expansionist dreams. most importantly he has formed a powerful business alliance with American entrepreneur John Malone who holds an 18 per cent (non-voting) share in the company. Thanks to this partnership and other strategic coalitions, Murdoch's information empire now reaches more than two in every three people on earth. But it has come at a price for his dynasty. Rupert Murdoch has a weakening hold on News Corporation shares while John Malone's shareholding has strengthened. As it currently stand any decision on who succeeds Rupert will have to be approved by John Malone. Neither Lachlan nor James is guaranteed an easy ride to the top of the 'family business'. Rupert's children are very loyal to heir father and he in turn shows them great affection. Both sons speak to their father on a daily basis. But they talk deals and developments; according to Lachlan they don't discuss their personal lives. As a family they are not reflective, always looking to the next business deal. Rivalries are par for the course among large dynastic families, but to the date Rupert's children have behaved remarkably well towards one another. With a certain American-pie sweetness, Lachlan says he feels lucky to be a member of such a close family. 'We all live in so many different places and (it) keeps us in constant communication. But my father ... is a great father, a very loving father, so it's not an unusual father-son relationship in any way. If it's unusual in any way, it's unusual that it's such a strong relationship.'
Lachlan argues that News Corporation has been shaped primarily by the two sides of what the family likes to see as the pre-eminent Murdoch characteristics. On the one hand, they're risk-takes and thrill-seekers a la great-grandfather Rupert Greene. On the other hand they're descendants of a strict Presbyterian minister. Lachlan understands this genetic mix as 'playing itself out in all our lives every day. Everything from the fact we all tend to work too long hours and sacrifice a lot for it, but at the same time we all enjoy ... taking risks and making quick decisions.' The Murdochs believe in the power of genetics, in the passing of 'family traits' down the generations.
This set of supposedly shared Murdoch's characteristic is, in Lachlan's view, the key to the family's continued success as free-market entrepreneurs. The overriding imperative for the Murdochs and their business is to what's necessary to expand the company. The worst nightmare would be to see the corporation standing still, stagnating. The family's self-image is suitably enhanced by a solid collection of favourite family tales, regularly brought out for interviews or speeches. Rupert's children are well versed in the tale of Sir Keith's Gallipoli letters, the generational disdain for social clubs, and the anti-elite rhetoric. Dame Elisabeth - denying the ambition of both her husband and her son - regards Rupert as a modern version of Sir Keith. 'His father was interested in finance too; I can see him with his little red notebook and pens working out negotiations. And I can see it with Rupert. It's not the money, or the power, no; it's the challenge, like his father.'
Rupert Murdoch has no plans to retire. he describes the company in artistic terms as 'a work in progress', with himself as the artist ahead of his time, always impatient to start something new. His plans are endless. for the time being his two sons appear content for 'Pop' to control the business - and to a great extent, their lives. Although now in his seventies, and after placing his sons in strategic positions, Rupert hasn't been able to set any apparent timetable for devolving corporate control to any of his children. His father sir Keith sought to secure a firm business path for his heir, but his obsessive son can't bring himself to give the game away. The business is his life. however much he may want the global empire to continue in family hands, however much he might dream of his dynasty continuing, the monarch is unable to allow his children to emerge strongly from under his shadow. news Corporation was crafted in his image, not theirs; it is what it is because of Rupert's unceasing drive. Few, if any, could match his unrelenting pace. To hold on to News Corporation in its entirety would require the same ingenious authoritarian mindset - but Rupert is unique.
It's not only in his business life that Murdoch has stopped short of securing the dynastic future. his decision to create another family, with a third wife whose careerist drive probably equals his own, has weakened family cohesion. Wendi Deng, an MBA graduate from Yale, is originally from Guangzhou in mainland china. When she met Rupert, she was a junior executive at Star TV in Hong Kong. fluent in English and Mandarin, Wendi acted as Rupert's interpreter on several trips to china. Expanding the business in mainland china is one of his 'works in progress'. Wendi is the perfect partner for fostering good relations with the Chinese government.
His 1999 marriage looks to be a perfect synthesis of his personal life with his Asian media interests. Although Wendi has o official role in the company, News Corporation insiders say she has identified potential investments for the company and acts as her husband's liaison. In China she is seen not just to represent the company but also its owner. In a country where families and business deals are inexorably linked, this is a distinct advantage. Their union has been accompanied by a change of lifestyle. Rupert was encouraged by son James to move to downtown New York; he now lives in the trendy and wealthy Tribeca neighbourhood. He and Wendi maintain a loft apartment near Lachlan and his wife, model Sarah O'Hare. Rupert has adopted chic Armani clothes, replacing his former trademark blazer and tie. His four children were 'amazed' when they first heard about their father's new relationship. His eldest daughter Prue, who is ten years older than Wendi, jokingly called her father a 'dirty old man'. But Prue, Elisabeth, Lachlan and James say they are happy for Rupert and find Wendi 'delightful'.
After his marriage to Wendi the Murdoch family rearranged the family company Cruden Investments - Cruden owns 30 per cent of News corporation. under the new arrangements, Grace, Rupert's daughter with Wendi Deng, is likely to inherit 10 per cent of Cruden shares from Rupert's individual entitlements. Rupert has placed his other four children in the position of controlling Cruden Investments and the related family company, Kayarem. Between them these four children will inherit at least 40 per cent of Cruden Investments. Rupert Murdoch's former wife Anna is adamant that a successor to Rupert cannot come from his new and third family. It is believed that the divorce settlement ensured Anna some say in succession planning, making it difficult for Wendi Deng and her daughter to have any effect on Rupert's other children. In addition it's understood that Rupert and his children have signed prenuptial agreements with their respective spouses, which aim to secure the Cruden shares.
Rupert Murdoch is tired of the endless speculation about who will succeed him. he has said there is '... plenty of room for twice as many children to have satisfying, worthwhile lives in this company'. He is confident that his four eldest children 'will get together and they will work it out'. perhaps Rupert is blind to the fierce jealousy that frequently emerges when siblings are left to sort out a rich dynastic heritage. he was lucky to be born the only son in an era when it was assumed that only boys would inherit a business - and to a father who did all he could to ensure his heir would inherit. Then there is the 70 per cent of the company owned y non-Murdoch shareholders. The major investment institutions will have their say in ensuring the company's success well beyond Rupert's demise. Shareholders have been happy with Rupert's reign, but this confidence has yet to extend to any of his children. Indeed, as the empire has grown there has been endless speculation about his children's talents and abilities.
Many observers believe it's impossible to run a massive public corporation along nepotistic lines and Murdoch genes can't be enough to secure the top position. However, James Lachlan and to a lesser extent Elisabeth are in the running because they have what it takes to run a corporation, they've competitive and dedicated, sometimes ruthless and aren't afraid to take risks. But they have a father who remains infatuated with deal-making. It is said that Rupert is at his best when cornered and facing adversity. Even when he loses he looks to the next deal. He is a gambler not a manger. But what his children need now is for Rupert to consolidate the family's shareholding. They need Rupert to manage, not gamble, but for a man who is driven by the thrill of the deal it's unlikely he will change the habits of a lifetime, even for his much loved children.
For close to ninety years, gambling of one form or another has been part of the Murdoch tradition. it has usually paid off. His old headmaster James Darling once remarked that Rupert's only god was himself; now his autocratic style, coupled with boundless ambition and the hunger for risk-taking, has created a business of too great a complexity and too weak a shareholding to be smoothly handed to either of the prince regents, Lachlan or James. When Rupert leaves it will be the investors, including Malone and the Murdoch children, who will do battle over control of the second-largest media company in the world. Rupert is tied to an image of himself as iconoclastic gambler and he continued to thumb his nose or the world. As a result, this greatest of all Australian media empires wants in uncertainty while its ageing ruler, in both his business and personal decisions, juggles with its future.
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