Rupert Murdoch is not just dumping Donald Trump. He wants back his role as the world’s most feared media mogul.
At the age of 91, Murdoch has cast off what he felt were the shackles of a constraining marriage and is in the process of regaining total control of his global media empire, as well as reasserting his political influence in America.
This won’t be easy. He has to persuade the stockholders in the two halves of his empire, Fox Corp and News Corp, that they should be merged into one, with him at the top—nearly a decade after they were forced to split up when his British tabloids, part of News Corp, were exposed to the huge legal costs of a phone-hacking scandal.
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His decision to merge the companies has angered stockholders in both—for different reasons. Many investors in News Corp, which houses Murdoch’s legacy newspaper businesses, don’t want to be associated with Fox News—as one told the Financial Times, “Fox News is kind of toxic and should be ringfenced.” On the other side, Fox investors fear that their company, which gushes profits, would lose value by being in the same stable as the newspapers, in a struggling sector with far larger costs and that generates far less money.
In short, it is hard to find anyone who thinks the merger makes any sense in business terms. Nor, as some have suggested, is it a necessary step to simplify the Murdoch dynastic succession when the mogul does decide to retire—or after his death.
“This is a move to centralize things around him in the U.S.,” explains Claire Enders of Enders Analysis, one of the best-informed trackers of the Murdoch empire. “He wants to be back in the thick of things, it’s much more attractive to him than any option elsewhere. He is entitled to exercise leading shareholder status, keeping a grip on his media assets.” Nonetheless, in a guidance for investors by Enders Analysis, they warned that the terms of the merger were weighted against the interests of Fox shareholders and cautioned that a similar merger of Viacom and CBS left the resulting Paramount Global worth $13 billion less than if the two had remained separate.
The first and most intimate casualty of Operation Rupert Redux is his fourth wife, Jerry Hall. When they married in 2016 (apparently a coupling encouraged by Murdoch’s top News Corp executive in the U.K., Rebekah Brooks) it seemed like a shot of late-life Viagra with Murdoch declaring that he was “the luckiest AND happiest man in the world.” Nobody outside the family really knows what Hall meant when, announcing the split early this summer, she cited the tired legal sophistry “irreconcilable differences.”
There were claims that, in the eyes of the Murdoch family, she became an over-protective gatekeeper during the COVID pandemic while they were living in England. (As Fox News was touting quack remedies, debunking vaccination, and demonizing Anthony Fauci, Murdoch was at the head of the queue at Henley, near London, for his first shot from the National Health Service.) A more likely annoyance is that Murdoch felt his wife was designing around them an opulent version of assisted living involving English country mansions and the tweedy Cotswold crowd while, all the time, he was yearning, yearning, to get back to an entirely different life, the only one that he ever really loved, at the helm of his empire in New York, rolling up his sleeves and making political mischief—being the old Rupert Murdoch who founded his business on his salty London tabloid, The Sun.
So, come the middle of August, the lawyers for each side settled the terms of the divorce (she got the English country estate among other treasure) and Murdoch was heading west. Last week, showing his shark-like instinct for blood in the water, he was in New York when the Trump train crashed in the midterms and his Manhattan tabloid, the New York Post, produced a classic Sun-style front page headlined “Trumpty Dumpty…Don (who couldn’t build a wall)—can all the GOP’s men put the party together again?” Another front page, alerting us to his new favorite, hailed Florida governor Ron DeSantis as “DeFuture.” At the same time, Murdoch’s far more dignified organ, the Wall Street Journal, editorialized: “Trump has led the Republicans into one political fiasco after another.”
Of course, that’s just the fun bit, part of the day job. The serious business is getting the merger done. Enders says, “The shareholders know they will get a better offer. This is a six-month problem, but they will be enticed.”
That involves setting a price at which the stigma of accepting coin from the pungent profits of Fox News becomes acceptable. After all, talking about “ringfencing” is, in ethical terms, merely a fig leaf that cannot shield the grotesque instrument beneath.
In any event, the News Corp problem, that it will undermine the market value of the merger, is more of an issue for Wall Street. Peter Kreisky, an authority on the digitization of the media and long-time follower of the Murdoch businesses, says, “Investors know that the print news business is in long-term decline, dependent on successful adaptation to digital. News Corp is struggling with that. In comparison, Fox Corp is a thriving $14 billion a year money machine, and Fox News is the beating heart of Fox’s programming appeal. The expectation must now be that Fox News will be reinvigorated by internecine warfare within the Republican Party following the disastrous performance of Trump’s candidates.”
The Trump presidency took Fox News to the heights of its fortunes. The White House and Fox News were joined at the hip. Murdoch had weekly talks with Trump and Fox News anchors, notably Sean Hannity, served as Trump whisperers. That’s why Murdoch’s dumping on Trump now seems so ruthless. “The impression was,” says Enders, “that they were working together against political trends that they didn’t like.”
With Murdoch now looking at 2024 and seeing no future for Trump it will be interesting to see how long it takes Fox News to complete the same pivot. Ten days before the midterms, Tucker Carlson called Biden “a mentally defective president who can barely speak.” Who is the dumb one now?
Murdoch also has a direct commercial interest in stoking up the noise of extreme partisan politics: Fox News, as the single most watched news channel in the country, is the greatest beneficiary of the ever-increasing torrent of political attack ads on television.
All of this puts the spotlight on Murdoch’s eldest son, Lachlan, who has been nominally in charge of Fox News while his father was in his English limbo. Of the older Murdoch children, Lachlan, says Enders, is the one with political views most similar to his father. But the merger is a reminder of how different the internal family dynamics were when Murdoch was last the ruling power over all the businesses, and particularly of the role of his second son, James.
James was, points out Enders, for many years in charge of the corporate deal making, and was instrumental in putting together the deal that eventually made the Murdoch family fortune, the sale in 2018 of the Fox Hollywood and TV entertainment assets to Disney for a staggering $71.3 billion.
“Before the sale to Disney” says Enders, “the children had no money of their own. They relied on Rupert for their lifestyle.” (Elisabeth, Murdoch’s second daughter, became independently wealthy in 2016 when she sold her TV production company, Shine, to her father for $214 million). James had expected to become chief executive of Disney when the sale was concluded but, says Enders, “Rupert pulled the rug out from under him.”
That goes to the heart of the bad blood in the dynasty. At the beginning of his career in the empire, it was James, not Lachlan, who seemed the golden boy. As well as his business acumen he parroted his father’s prejudices, against the BBC in particular and public broadcasting in general. To Rupert Murdoch, the BBC assembled many demons: liberal bias, publicly subsidized editorial profligacy, the worst of British elitism.
But that blind loyalty began to unravel after James was appointed to clear up the mess left by the tabloid hacking scandal, when his father reluctantly stepped down from running the papers. This involved closing the News of the World, where the hacking was deeply embedded in the newsroom as a generator of endless scoops. It was a tough move to make: the News of the World was the first paper that Murdoch bought in London in 1969 as the basis of his new global ambitions. But the legal consequences of the hacking—years of litigation over compensation payments to the victims—made it imperative to split News Corp from Fox to contain the damage. Even then, says Enders, “Rupert resisted the split and it was only when he was out the door and James was in charge that it happened at all.”
Until then, James had never glimpsed the brutal competitive culture of a tabloid newsroom as nurtured by his father. “He was personally and professionally suddenly in the frame of a journalistic culture that he found abhorrent,” says Enders. And that was what led to a change of view about the integrity of television news when James was put in charge of a tough fight with British regulators to get approval for the Murdochs to take full control of Sky News, a satellite broadcaster. Regulators and politicians feared that Sky News would become a clone of Fox News and a bullhorn for Murdoch. James clinched the deal by pledging full financial and editorial independence for the network for 10 years. It was, says Enders, “a brilliant suggestion that strengthened the plurality of British television news. Sky News has won myriad industry awards.” In 2018, Sky News was sold to the U.S. media conglomerate Comcast for $39 billion, and the pledge of its editorial independence was renewed.
Enders says that during his time in the company James “stewarded a tenfold increase in the family’s wealth.” How different it is now. Enders believes that the succession is settled, with Lachlan secure as the heir. “I doubt James has any contact at all with his father, except remotely, because they’ve had some well known falling-outs. The motivation for a coup isn’t there. The elder children are all extremely wealthy and Elisabeth and James are value creators in their own right.”
In London, there is a significant change in editorial priorities—and culture. The tabloids no longer decide the fortunes of News Corp. For a long while their profits helped to support the upmarket papers, The Times and Sunday Times. In 2010 the two broadsheets made a loss of 42 million pounds; in 2021 they made a profit of 45 million pounds, largely due to their digital editions, while The Sun made a loss of 44 million pounds. It is likely that the broadsheets will become even more profitable when, as is rumored to be imminent, the two are combined into a seven-day brand in print and digital.
Both Enders and Kreisky see The Sun as a significant drag on News Corp profits. Although British tabloids have long provided the template for successful international websites—Mail Online is one of the top rated sites in the U.S. and the world—The Sun has only recently gone digital in the U.S., where, says Kreisky, its growth has stalled “for lack of constantly compelling content. It needs a ‘content doctor’ to inject a riveting must-read tabloid sensibility. There is also an opportunity for cross-promotion of The Sun and Fox News. But when it comes to digital, Murdoch himself has never made the transition editorially or as a strategist from print.”
The jewel of News Corp, says Kreisky, is not in London but New York—Dow Jones, publisher of the Wall Street Journal. “In the most recent quarter it posted a 26 percent rise in revenue to $565 million and had 3.1 million digital-only subscribers, making it one of a handful of traditional print publications to have successfully become a top digital property.”
As a media gold mine, Fox Corp is a lot more more than Fox News. It has enormous reach in the U.S., delivering news, sports and entertainment to 208 local stations, including 18 that it owns and operates itself. It also feeds news and sports to 75 million subscribers through cable and broadband operators like Comcast, Verizon, and AT&T. Were it not for the odium of Fox News the corporation would be seen as a model of nimble and far-sighted media management. But Rupert Murdoch’s return to the heart of his business and his complicity, through Fox News, in the debasement of American politics by Donald Trump can’t be wiped from the record simply by dumping Trump now.
President Biden called Murdoch “the most dangerous man in the world.” This was absurd hyperbole—there are several more obviously qualified candidates for that title. But Murdoch’s baleful influence on American politics and democracy through Fox News will be his most lasting legacy, and it’s obvious that he’s not done yet—as Enders put it, “Rupert Murdoch does not believe that his time is up.”
