The current state of Rupert Murdoch and his empire

May 9, 2023
Rupert-Murdoch

Gabriel Sherman’s cover story in Vanity Fair – ‘Inside Rupert Murdoch’s Succession Drama’ – has generated a lot of attention, and with good reason. Murdoch runs one of the most powerful but also one of the most secretive media corporations in the English-speaking world.

Sherman is a well-connected and well-respected journalist in New York. He has been studying the Murdochs for more than a decade. In 2014 he published The Loudest Voice in the Room, a biography of the head of Fox News Roger Ailes. In 2016, he broke the story of the female employees of Fox News who charged that Ailes had sexually harassed them. The scandal forced Ailes’ resignation, although Fox paid him $40 million on the way out.

The recent cover story has many revelations about the state of Rupert and his empire. Only one source (a friend of Jerry Hall’s) is named in the article, testament to the Murdochs’ power and paranoia. So caution is needed in accepting all the claims but the article offers many tantalising insights.

  1. Rupert’s health problems have been far more serious than has been publicly acknowledged.

In early 2018 Murdoch slipped on his yacht, was in excruciating pain, and ‘kept almost dying’. After many delays and much drama he was taken by private jet to UCLA hospital. The corporation leaked an email to show he was in command: ‘I have to work from home for some weeks. In the meantime, you’ll be hearing from me by email, phone and text!’ In fact, Murdoch was in terrible shape and required Hall to spoon feed him for months.

Doctors who treated his broken back discovered that some vertebrae had been fractured before, and Murdoch believes it happened when Wendi Deng pushed him into the piano during a fight. In recent years he has had seizures, a serious bout of Covid, pneumonia twice, periods when he was confined to a wheel chair, and atrial fibrillation. Probably not always the energetic hands-on chief executive he once was.

  1. Rupert treated Jerry Hall cruelly.

Rupert created headlines, first when he abruptly divorced Hall last year; then this year when he announced he was engaged to Ann Lesley Smith and then again two weeks later when he announced the engagement was off. If this was some other billionaire, the Murdoch press would have had great fun speculating on the nonagenarian’s adolescent love life.

It is well known that Rupert told Hall of their divorce through an email. Sherman has a screen shot of it: ‘Jerry, sadly I’ve decided to call an end to our marriage … We certainly had some good times, but I have much to do … My New York lawyers will be contacting yours immediately’. This came as a complete shock to Hall, who was ‘devastated, mad and humiliated’.

He was married to Hall for six years, and when their divorce was announced, various reasons such as his dislike of her smoking, and strained relations between her and his children were floated in the media. The account here balances the ledger somewhat. For much of their marriage Hall was a devoted and attentive nurse to Murdoch as well as a companion.

The article also suggests that Murdoch meeting Smith may have been the key to his wish to move on. At their first meeting, Smith told Murdoch that he and Fox News were saving democracy. Hall suspects the two of them then had some more intimate dinners together.

Smith has a mix of Christian nationalist and QAnon beliefs which, when publicised, apparently Murdoch found distasteful or embarrassing and so the engagement lasted just two weeks.

The more important point, though, is the cruel and thankless treatment of Hall and how much of a self-centred and selfish man Murdoch has become.

  1. Murdoch’s political bromance with Trump was always more about convenience than conviction.
  2. Murdoch is a prisoner of the Fox News monster he and others so successfully and profitably created.

When Dominion Voting Systems sued Fox News for defamation, one revelation to come from its spectacularly successful discovery process was just how much Murdoch privately disagreed with the claims about electoral fraud that Fox News programs had been giving oxygen to.

In fact there has always been some divergence between Murdoch’s political beliefs and Fox News’ agendas. Three areas where Murdoch and Fox viewpoints differ are that he has always been pro free trade, high immigration, and, I think, gun control. But these were not the views of Fox’s core audience. He didn’t interfere partly because he had made a commitment to Ailes that he never would, and probably more importantly because Ailes was in touch with the audience, and what it wanted to believe. Rupert happily put his commercial interests ahead of his political beliefs.

According to ‘a person close to Murdoch’, Rupert always knew Trump ‘was an idiot’. ‘Murdoch loathed Trump’s nativism and know-nothingism’. His loathing of Trump deepened with Trump’s failure to meet the challenges of the Covid pandemic. ‘While Fox News hosts railed against lockdowns and pushed dubious treatments like hydroxychloroquine, Murdoch followed the science.’ Murdoch’s doctors told him he must take extreme precautions to protect himself, and he and Hall followed a radical isolation regimen for months.

Sherman argues ‘Murdoch had more power than anyone to pressure Trump to take the pandemic seriously. He did nothing. In fact, he took no responsibility for the Covid misinformation Fox News pumped out day after day.’

After the 2020 election, Murdoch told Fox executives it was ‘bullshit and damaging’ that Trump wouldn’t concede. ‘Murdoch was over Trump but the Fox News audience most certainly wasn’t.’ So, alarmed at the way their ratings were dropping and at the vocal attacks on them by Trump and some of his supporters, they ‘pivoted’. The issue here is not just hypocrisy but irresponsibility: ‘By mainstreaming Trump’s stolen election conspiracy, Murdoch and Fox had unleashed dangerous authoritarian forces.’

The Dominion Voting Systems defamation case showed how Fox had become a captive of the propaganda monster it had created, and one can only feel that Murdoch’s irresponsibility got its comeuppance.

  1. The conflicts and tensions in the family run deep.

I have always been sceptical whether outsiders’ accounts could capture the complexity and ambivalences of the Murdoch family relationships. Nevertheless several recent accounts all point in the same direction: ‘The central fault line remains the rift between James and Lachlan. According to sources, the brothers no longer speak’.

In the past, the brothers have sometimes acted together. For example when the Ailes sexual harassment scandal broke in 2016, according to Sherman and others Rupert ‘desperately wanted to protect a long-time lieutenant and the $1 billion in annual profits he delivered.’ James and Lachlan combined to force the issue, which as the revelations continued, Rupert would have probably been forced to do anyway.

One weakness of Sherman’s excellent article is that it is very New York centric. For example he describes Rupert and Lachlan’s love for Australia as ‘atavistic’. More seriously he does not take proper account of the impact of the UK phone hacking scandal, beginning in 2011, on family relationships. He says that after Lachlan quit in 2005, James was the heir apparent for the next decade. This seriously underestimates the damage done to James as a result of the scandal. Indeed press reports at the time said that Elisabeth wanted James fired and that it was Lachlan who stood by his brother. Other reports said the siblings were undergoing family therapy regarding their relationships.

For a long time outsiders misread the brothers. Because James was ambitious and abrasive and pursued the company’s interests ruthlessly, he was seen as more right-wing, while because Lachlan was more courteous and less forceful, it was assumed he was more moderate.

Now it has become clear that Lachlan is much more of a right-wing hardliner, and either for business or political reasons, much more comfortable with the product Fox News delivers.

In contrast, James is horrified by Fox News, its climate denialism, white nationalism and stolen election conspiracies which he sees as a menace to American democracy. For James and his wife Kathryn, the first open break came in August 2017 with the neo-Nazi march in Charlottesville, chanting slogans such as ‘Jews will not replace us’ and clashing with counter-demonstrators. When Trump said there were ‘very fine people on both sides’, Fox supported him. James confronted Rupert and Lachlan but was rebuffed. He then donated $1 million to the Anti-Defamation League and tweeted ‘there are no good Nazis. Or Klansmen, or terrorists.’

Finally, after the Disney takeover – an excellent deal for Murdoch shareholders (including family), which Rupert and James supported and Lachlan resisted – James left the company altogether. According to one senior Fox staffer, perhaps reflecting paranoia more than reality, James sees destroying Fox News as his mission in life.

  1. How will family conflicts affect the course of the company after Rupert’s death?

An amusing trivia from the article is the way real life and the TV series Succession have been interacting. Indeed the magazine put ‘succession’ into the headline. According to Sherman, Lachlan suspects that James has been feeding story lines to the TV producers, while it is part of Hall’s divorce agreement that she couldn’t give story ideas to the writers of the TV series. Sherman says he was ‘struck by how sad all the Murdochs seem,’ and perhaps in Rupert’s twilight they feel trapped like characters in some script over which they have little control.

The unresolved question is: how will the children align after Rupert is gone? Lachlan is clearly the heir apparent, but his future will be decided by his siblings, each of whom will have two votes on the board of the trust Rupert constructed that controls the company through a special class of stock. It is hard to predict how the two females – Elisabeth and Rupert’s daughter from his first marriage Prudence will align.

Sherman quotes one observer saying that Murdoch believed setting up a Darwinian struggle among his children would produce the most capable heir, and that this had bad effects on the children. It is hard from the outside to know what comments like this meant in practice. Given that other reports saying that Rupert ruled out the females, it makes it a pretty narrow struggle.

A truly Darwinian approach to corporate succession would look very different. Darwin himself was a firm believer that in-breeding leads to frailty. The idea that leadership of a corporation the size of Murdoch’s empire should be decided by lineage rather than achievement and ability is anachronistic.

Nearly all speculation so far has been confined to the children from Rupert’s first two marriages. And indeed Murdoch has arranged things such that it is very difficult for anyone outside to take over. Nevertheless, shareholders rebelled sufficiently to stop Rupert and Lachlan re-merging Fox and News Corp last year. It may be that current speculation about the empire post-Rupert has been within too narrow parameters.

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