Most business men don’t try to start dynasties, they prefer to simply make money, but the Murdoch Clan is purely dynastic in its aims, which is why everyone now expects that Rupert Murdoch will call upon his son James Murdoch to take over the role of Peter Chernin, who after 20 years at News Corp, much of its running Fox, will stand down in June.
We have sympathy for the Chernins of this world, faithful and talented servants who never get to run their own ship, destined to warm a seat for someone with the name Murdoch.
The Chairman and CEO of News Corp, Rupert Murdoch got his start the same way, through a dynastic link, picking up a dominant shareholding in Australia’s News Limited back in 1953 from his Father’s estate, which would later form the backbone of News Corporation, after he assumed the role of CEO, in his first job after University.
He has since blazed a trail of acquisition and global expansion that has created the $33 billion news and entertainment empire. At the ripe old age of 78 Murdoch senior says he will temporarily take over the role of COO from Chernin when he leaves in June
‘Peter’s contributions to the Company over the past two decades have been immeasurable. He has led important businesses and nurtured talented managers,’ said Murdoch. ‘We are fortunate to have such a strong and seasoned group of leaders at our Fox companies and we are confident that our success will continue. To that end, Peter and I will work closely over the next four months to ensure an effective transition.’
Many leaders of Chernin’s talent, at the age of 57 want to go and try their hand at becoming a Murdoch in their own right, and probably he sees this as one last chance at unfettered leadership. It is likely he will pop up somewhere else.
Chernin joined News Corporation in 1989, served as President and COO since 1996 and has headed both Twentieth Century Fox Filmed Entertainment and the Fox Broadcasting Company.
Murdoch’s oldest son Lachlan left News Corp in 2005 in what appeared to be a bust up with his father over his assumed dynastic role as heir apparent, while his daughter Elizabeth (second oldest of his six children) has often been described in the press as the most talented, and runs a UK film production company which initially thrived because of deal with BSkyB the News Corp operation currently controlled by her brother James, to take its content.
Whatever changes to Murdoch’s management chain, there is a dearth of Murdoch surnamed management currently in the USso it will have to come from the UK, and the world’s press, which have a love hate relationship with Murdoch, all expect a major move in that department now Chernin is on the way.
While many watchers see only this dynastic dimension to the Murdoch empire, we prefer to see the business acumen that makes Murdoch a newspaper and pay TV genius, due to shrewd negotiation, astute acquisition and content selection, risk taking in spending vast quantities of wealth on subscriber marketing, and continued focus on being bold and doing the unexpected.
Family control of News Corp was at risk two years ago when John Malone of Liberty Media began building a News Corp shareholding and in the end this leveraged control of DirecTV away from News Corp and Murdoch. This is perhaps the first time that dynastic ambition got in the way of his own personal desire to own a pay TV service in the US, one were he had failed to grasp the ‘triple play’ nettle by investing in networks and a return path for DirecTV, something Rupert Murdoch has publicly regretted.
Last quarter News Corp took a $8.4 billion impairment on assets, and saw lower than expected operating income, down 42% to just $818 million and a net loss of $6.4 billion, with the only great success being cable network content which produced a substantially increased margin. After these figures after which Murdoch implemented an across the board set of cost cuts.