Lachlan Murdoch: seduced back into the fold

For almost ten years, Rupert Murdoch’s older son, Lachlan, has been “the wayfarer child, searching for his place in the world and turning a cold shoulder to his father’s beseeching that he should return home”, says Town and Country.

Locked in a war of wills, both father and son suffered. “Of the many, many rifts in the Murdoch family, this has been the epic one. The designated heir went stubbornly missing, creating a power vacuum in which much went awry.”

“But give credit to a father’s persistence.” At 83, the patriarch has seduced the prodigal back into the fold, last week making him co-chairman of both News Corp and its hived-off broadcasting and film sister company, 21st Century Fox.

Lachlan, 42, is now back in pole position in the succession race, ahead of his siblings James and Elisabeth. As Murdoch biographer, David Folkenflik, told the FT, “this is his to lose”.

News and Fox might be listed companies worth a combined $83bn, says The Guardian, but even after the upheavals of the 2011 phone-hacking scandal, they’re still run as a family fiefdom.

In 2005, when Lachlan shocked his father by abruptly quitting News Corp to be “his own man” (see below), his natural destination was Australia, says The Independent. Although raised in New York, it has long been his spiritual home. Both he and his wife, the former model Sarah O’Hare, sport tribal tattoos and he peppers his conversation with “G’days” and other colloquialisms. People close to the family suggest that his temperament reflects the national character.

Of all the Murdoch children, Lachlan is the most “affable princeling”: straightforward and laid-back. He proved such a social hit in Australia that his older half-sister Prudence dubbed him “the king of Sydney”. Indeed, the chief criticism levelled against him is that he is “not Murdoch enough”.

Rupert Murdoch would probably disagree. He noted early on that Lachlan had the strongest natural affinity with the family newspaper business, telling friends: “he was the one who was always most interested”.

As a 13-year-old, “he worked with the printers in the pressroom, cleaning all the oil and the grease off the press”, just as Rupert had done himself. In 1991, when News Corp teetered on the edge of bankruptcy, it was Lachlan – still a teenager – who accompanied his father around the world in his efforts to rescue the company.

Having joined News Corp Australia straight out of Princeton, Lachlan is credited at having made a good fist at running it. The problems began when Murdoch, having redomiciled the parent company in America, summoned him stateside. Lachlan clashed with senior lieutenants over strategy and was hurt when his father took their side.

Now “the boy who would not be king” has returned to fulfil the patriarch’s dynastic dreams, says the FT. It’s still not entirely clear whether he really wants the job at all.

What does the future hold for the dynasty?

When the Australian Financial Review asked Lachlan Murdoch last year whether he intended returning to News Corp, he replied, “No, I’ve moved on from that”. So those closest to him in Australia may well be surprised at his decision now, says Paola Totaro in The Monthly.

As his friend and business partner James Packer (son of Kerry) observed in 2012, “he’s still a young man with his own business in Australia [the investment company Illyria]. He’s got his TV, Channel Ten; he’s got radio and he’s a non-executive director at News Corp”.

Yet, Lachlan’s record in Australia hasn’t been stellar, says Murdoch biographer Michael Wolff in Town and Country. While still in the News fold, he launched the mobile phone firm OneTel in the 1990s with Packer, which swiftly went bankruptcy. Put that down to youthful exuberance, but Illyria’s investments have hardly been sterling performers. And the Ten Network, having struggled in a ratings war, reported losses of A$285m in 2013.

Shortly before Hackgate broke in 2011, Rupert Murdoch reportedly tried to find a buyer for Lachlan’s share, a move that infuriated Lachlan. Hackgate, of course, changed everything – tarnishing the reputation of the younger brother, James (who’d assumed the role of designated heir) and leading to the breakup of the company.

Yet James also got a leg-up this week, becoming co-chief operating officer of Fox,  alongside Chase Carey. “Murdoch seems to be setting up the brothers, each with prickly regard for each other, for the ultimate showdown,” says Wolff. Will investors wear it?

Lachlan and James were targets of a “significant shareholder protest vote in 2011”, says Andrew Edgecliffe Johnson in the FT. But a revolt seems unlikely “while stocks stay buoyant” (both are up by 10% since the split). And the Murdoch family has 39.4% voting rights.

It may well turn out that the importance of the appointments will “not be felt for years”. As Macquarie analyst Tim Nollen points out: Murdoch senior might be 83, but he shows no sign of going anywhere.