The Hidden Succession News in Rupert Murdoch’s Sale of Fox Entertainment to Disney

This article originally appeared on this site.

As has been endlessly reported, Rupert Murdoch’s sale of Twenty-first Century Fox’s mostly entertainment assets to Disney merits major news. It reveals Fox’s lack of size, or “scale,” in a business increasingly dominated by corporate behemoths. It confirms Disney’s lust to compete with Netflix. But there is something else: after years of speculation regarding which son will succeed Murdoch, the sale signals that Rupert has made a “Sophie’s Choice” among his sons Lachlan and James. This is partly “a story about succession,” a board member of one of Rupert Murdoch’s companies told me. “Rupert has put his chips on Lachlan.”

The sale turns Fox into a company focussed on news and sports, which are Lachlan’s great passions. Lachlan, forty-six, and James, forty-four, have vastly different interests and have never been close. Still, it has been unclear who would succeed Rupert as chairman.

In a 2014 division of executive power at Fox, Chairman Murdoch anointed Lachlan as executive chairman and James as C.E.O. Lachlan works, along with his father, in Fox’s office in Los Angeles. James is based in New York, where Murdoch now parks at Fox News. A media-company C.E.O. who has spent ample time with the Murdochs says, “When I’m with the three of them, Lachlan’s the guy.” The executive added that “Lachlan’s politics are like Rupert’s. James is more moderate. The Murdochs don’t get along politically.” (None of the seven people interviewed for this story wished to be quoted by name, citing fears that speaking publicly would complicate their personal and business relationships with the Murdochs.)

Politically, another media-company C.E.O. who knows them well says, “James and Rupert really don’t get along,” Unlike his father, James is no fan of President Trump. After the violence in Charlottesville, Virginia, when Trump did not condemn the loose coalition of neo-Nazis, white supremacists, and Confederate apologists who marched there, James donated a million dollars to the Anti-Defamation League “as a concerned citizen and a father.” His wife, Kathryn, supported Hillary Clinton in the Presidential election last year and regularly tweets disdain for Trump’s policies, particularly his stance on climate change. Kathryn and James are outspoken environmentalists; Lachlan and his father are not.

A source close to the Murdochs insists that family divisions played no role in the sale: “This deal was really about economics, not politics. James drove this deal.” The Murdochs were “frustrated” that the market undervalued Fox, and James persuaded his father that “the economics and the synergies were too good. He may not see eye to eye with his father’s politics, but they saw eye to eye on what a good deal this was.” However, the source close to the family concedes, “It’s no secret James is not a fan of Trump or what’s put on the air at Fox News. Contrary to what some think, James is no flaming liberal.”

The family also divides over the business of news. Rupert Murdoch’s heart beats faster in a newsroom. Since the ouster of Roger Ailes, Murdoch has personally overseen Fox News, presiding over its nightly idolatry of Donald Trump. Lachlan is as passionate as his father about their right-leaning news empire, which, in addition to Fox News, the Wall Street Journal, and the New York Post, consists of influential newspapers in England and Australia. Lachlan revelled in his tenure as publisher of the pro-Trump Post. In addition to disdaining the spin on Fox News, when James, the more digitally attuned Murdoch, looks at the shrinking profits and huge financial losses at papers like the Post and the Times of London, he dismisses newspapers as a yesterday business.

One other substantive issue divides the three Murdochs, the source close to the family says. While James and his father were enthused about selling to Disney, “Lachlan was very emotional about the sale of the company. He was pushing against it internally. He was trying to persuade his father and his brother this was not the right move.” Yet a source close to Lachlan Murdoch disputed this, insisting that Lachlan was pushing for a tougher negotiation and wanted a better price from Disney.

All three Murdochs have much to answer for, given the long history of sexual harassment at Fox News and the exorbitant settlements made by the former anchor Bill O’Reilly. James and his father both failed to monitor phone hacking by their London tabloids, which resulted in a scandal. As Matthew Garrahan recently wrote in the Financial Times, the British media regulator concluded that James’s conduct while C.E.O. of its newspapers “repeatedly fell short” of the “fit and proper” standard expected. Lachlan was not working in the company at the time, but Rupert Murdoch was throughout the period that his News of the World and Sungenerated scandalous scoops.

The Murdochs have very different styles. As an executive, Rupert is instinctual, making decisions quickly, sometimes impulsively. His business instincts have often been brilliantly daring, based less on rigorous analysis than on gut. James analyzes first. The hedged word “however” is a key part of his vocabulary. James can be brusque. Lachlan is more affable, a warmer person. “Rupert is more like James but wants to be like Lachlan,” one of the media-company C.E.O.s observes.

Where the three Murdochs are alike is that they are entrepreneurs. James will either go off to build his own business, as he did when he dropped out of Harvard to co-found a music label, or he may eventually move to Disney, to harness Fox’s international assets and enlarge Disney’s worldwide media footprint. Lachlan left his father’s employ several years ago, to move to Australia and start his own business. Ironically, today it is unclear whether Lachlan, who since moved his wife and family from Australia and enrolled their three kids in Los Angeles schools, will accept the job that his father wants for him. Those close to him say that Lachlan has not decided if he will stay to run the new company, according to a source close to him. But, from Rupert Murdoch’s viewpoint, Lachlan will remain the chosen good son. James will be the free son.