The sons also rise
June 17, 2015
Some people think that doing nothing, saying nothing, in the face of hard problems or trenchant criticism isn’t much of a choice. But, of course, it is. Keeping quiet, making no move, is as much a proactive choice as the alternatives.
Rupert Murdoch has understood this well. Not an introvert, nor afraid of sharing his opinions particularly now he’s discovered twitter, nonetheless he knows to just to shut up and let it pass when there are few strong or logical arguments on his side of an argument.
He has routinely done this when critics – including many of his own shareholders – have criticised his ‘poor’ corporate governance. Specifically; bringing too much power to his own hands (always Chair & CEO), treating a public company like a private one (keeping ‘old’ media in with ‘new’ against economic logic and market sentiment), and rampant nepotism in over-promoting his children – and over-enriching them (the handsome price paid for his daughter’s production company).
He has normally let this criticism wash away without any great comment beyond a de facto ‘yadayada, whatever… it’s my business.’ But the hacking scandal in the UK was the kind of wake-up call even Murdoch couldn’t push the snooze button on. It not only cost a lot of money it cost a lot of credibility as Murdoch bemoaned ‘the most humble day of his life.’
Something had to give and Murdoch Snr was going to decide exactly what, while he still could. So, his beloved newspapers (no one else including his sons loves them much) were finally hived off into a separate organisation. And he is relinquishing his roles at 21st Century Fox – kind of. He moves from Chairman & CEO to co-exec Chairman alongside his son Lachlan. Meanwhile his younger son James becomes CEO. Of course, the fact the newspapers have gone is hardly bad news for James – he had a great time running BSkyB and wasn’t bad at it. The exact opposite of both those facts is true of his time at News International.
So, Murdoch Snr has got exactly what he’s always wanted: familial succession at a nominally public company in exactly the fashion of a 19th century industrial dynasty. Will it be a question of ‘be careful what you wish for?’ It will be interesting to see. The omens aren’t sunny – almost none of the once great companies that got passed on from generation to generation in earlier times are still run by the family and quite a lot don’t exist anymore.
Certainly, while Rupert Murdoch had somehow earned the right to go quiet on his stockholders when they said stuff he didn’t like, once he’s finally left the building no such privileges will be extended to Lachlan and James.
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