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ANGE:

From Schwartz Media, I’m Ange McCormack. This is 7am.

Rupert Murdoch is stepping down from his empire and giving it to his son, Lachlan.

Only a few years ago, it would have been an unthinkable succession plan. The father and son were estranged, but with those deep wounds now healed, Rupert is ready to hand his life’s work over.

So, what’s Lachlan’s vision for the business, and how will his views influence the media in Australia?

Today, Lachlan Murdoch biographer, Paddy Manning, on why Rupert chose Lachlan, and what the empire will look like under the family’s eldest son.

It’s Wednesday, September 27th.

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ANGE:

Paddy, Rupert Murdoch stepped down from his worldwide media empire late last week. And I want to talk about the way Rupert has shaped the media we all consume. Can you tell me a bit more about the scale of his influence? How is the media different today because of Rupert Murdoch?

PADDY:

Well, that's a huge question because nobody over a 70-year career has had more influence on the global news media than Rupert Murdoch. And obviously, there's been tremendous change in that period. I think there's elements of Rupert Murdoch's contribution to media that clearly date back to his father.

So, Sir Keith Murdoch was a powerful journalist who set up the first national media chain in Australia under the rubric of the Herald and Weekly Times which brought up mastheads around the country. And the Murdoch media under Sir Keith faced accusations that it was propaganda. It would clearly pick sides and it was also populist.

And so I think those things you can still see all the way through to Fox News.

Clearly, it picked a side and clearly it's populist. And the ultimate expression of that is its support for Donald Trump.

Audio excerpt – Donald Trump:

“In perhaps the most stunning political story in American history, the folks rejected corruption and unfair federal policies and delivered vast power to a maverick political novice who is promising to treat working Americans with respect.”

PADDY:

But then there are also, I think, there are some characteristics of the Murdoch media under Rupert that are different to his father. I think he is much more anti-establishment. Rupert began his career on the death of his father at the Adelaide News, and that was in a second tier newspaper in, you know a provincial capital. And it was an outsider to the establishment. And Rupert Murdoch took on the establishment.

Audio excerpt – Interviewer:

“Do you like the feeling of power you have as a newspaper proprietor being sort of formulate policies for a large number of newspapers in Australia…"

Audio excerpt – Rupert Murdoch:

“There’s only one honest answer to that and it’s yes.”

PADDY:

And he took that to London where he took on the British media by buying the News of the World in The Sun and ultimately The Times as well.

Audio excerpt – Interviewer:

“Many people are afraid principally because they can’t believe you won’t interfere and alter the character of the newspapers your bought The Sun and The Times, what do you say to that?”

Audio excerpt – Rupert Murdoch:

“Well I certainly didn’t buy them to change them.”

PADDY:

And then he took that to America by setting up a fourth television network, Fox, and by launching Fox News,

Audio excerpt – Fox News Reporter:

“Good morning! Welcome to Fox News Channel”

Audio excerpt – Fox News Reporter:

“This is Fox News Now…”

PADDY:

And as well as buying The New York Post and The Wall Street Journal and the other print assets that he's got there.

So, yeah, I think that anti-establishment character of Rupert Murdoch as a media proprietor is something that is distinctively his own, and I think that's carried through his career.

ANGE:

So let's talk about the successor of this empire Lachlan Murdoch. He is Rupert's oldest son, but for a long time he and Rupert were estranged. How have they mended the relationship to the point that Rupert Murdoch is comfortable to hand over control of his whole empire just to him?

PADDY:

Well, it's a great question Ange because Rupert described as the worst decision of his life was his decision to back his own executives, particularly Fox News chief Roger Ailes and his then chief operating officer, Peter Chernin, in disputes with Lachlan, which caused Lachlan to quit the empire altogether in 2005. And he spent a decade in Australia doing his own thing.

And Rupert had to really coax Lachlan to return to the fold.

Actually funny enough, there's a very uncannily similar kind of dialogue in the succession series, the last down series where Logan Roy sits down with Roman and said, I need you to do this for me. And that is run the ATN and the Fox News equivalent.

Audio excerpt –Roman Roy:

“Do you really want me at ATN?”

Audio excerpt – Logan Roy:

“More Roman… more… I need you…”

PADDY:

And that is almost exactly verbatim the kind of conversation that ultimately persuaded Lachlan Murdoch to rejoin the family fold the family business in 2014. When Rupert said, I need you to do this for me. And Lachlan's view was for the first time he'd heard from his father that he wasn't going to be a bestower of opportunities. He wasn't proposing to buy Lachlan's business. He was asking him for help.

And if you think back to where Rupert was in 2014, he'd been through the phone hacking process. He'd been through a painful divorce with Wendi Deng. And Lachlan felt at that point that his father was at a moment of vulnerability and there was no way he could refuse him. And so Lachlan does rejoin the fold at that point.

And by the time that Rupert makes a decision. Famously a brilliant trademark bit of Murdoch brilliance to sell the Fox film an entertainment business to Disney, It's clear that Lachlan is the only one. He's the last man standing within the family in this sense, and he's the one that takes over as CEO of the New Fox Corporation when it's finally spun out in 2019.

Audio excerpt – Joe:

“With that I'll turn the call over to Lachlan.”

Audio excerpt – Rupert Murdoch:

“Thanks Joe, good afternoon and thank you all for joining us today...”

PADDY:

So the announcement that Rupert will retire in some way, this is just a continuation of what as it's a formalisation of what has been a de facto situation and Lachlan has been running this business now for years.

ANGE:

And how much can we expect Rupert to still be involved in his business despite you know stepping down? I'm wondering what level of influence he might still hold or is he really handing over the reins to Lachlan?

PADDY:

I think he is handing over the reins to Lachlan. And as I wrote in my biography of Lachlan, The Successor which came out at the end of last year. In early 2022, there was a meeting of all of the both the Fox and News Corp boards and the senior leadership of both companies all together at Lachlan's Mansion. And the people I spoke to over there describe that as a real baton passing moment. That was that moment where they came together for a strategy day based on an agenda that was developed by Lachlan and at which Rupert hardly spoke. And yet the people present were struck by wow okay this is Lachlan's show. And I missed the moment where Rupert stepped back. But this really feels like it. And I think that, yeah, Rupert has been progressively handing over to Lachlan for years now and, and you know, in the evidence discovered in the Dominion case, we did see that at a moment of crisis, for example, Rupert would be closely engaged. But, but he, he in the big picture has been stepping back and I think this is the chairman emeritus role that is described in the announcement, of course, enable him to get in touch with whoever he wants within the empire. And Lachlan and Rupert speak every day anyway. They are constantly in contact. But that would be that's kind of up to Rupert, I guess. And as far as investors and executives and the board are concerned, it is now Lachlan running the show.

And ultimately Rupert still does have the power to control how the Murdoch family trust votes. So he's not out of the picture and he can't be even if he wants to be. You know, he he will still have influence as the most powerful shareholder of the of both corporations. But it will be Lachlan who is accountable to the board and shareholders for the performance of both businesses. And so it will be Lachlan who has yet the final say.

ANGE:

After the break - what’s Lachlan’s vision for the Murdoch empire?

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ANGE:

Paddy, I want to know a bit more about Lachlan Murdoch and who he is and how he operates in the business. How different is he in his approach to his father?

PADDY:

Well, I think he's very different. And everyone focuses on where he sits on a left right axis relative to Rupert. But Lachlan is not a political animal the same way. He is not aspiring to be a kingmaker the same way he's not aspiring to be the interventionist, all powerful kind of editor in chief figure that Rupert has been throughout his career.

Lachlan is focussed on the business. He sees his role as leading the business and focusing on the bottom line and on strategy for the longer term. He does not think it's his role to intervene on a daily or weekly basis in editorial or programming decisions that are going to be made around the empire.

And he is very reserved when it comes to sharing his own personal opinions, whether it's on politics or other you know whatever else, because his view is that if he is to start putting out his own opinions that will be parroted around the empire, and you'll have in the end a uniformity, a kind of groupthink, which is what he hates. So he keeps his views to himself.

So yeah, that's where he's focussed on the bottom line completely. I think he's… he would describe his politics as socially liberal and economically conservative, and Lachlan has always talked about his politics that way. But when you look, for example, that him appointing Tony Abbott to the board of Fox Corporation, I mean that here is an arch conservative politician. I mean you can't think of if you're trying to underline or assert your conservative credentials, including on social issues. That's what Lachlan has just done with that appointment. Yeah, It's hard to reconcile that with the small l liberal on social issues, which you know Lachlan has sometimes described himself as.

ANGE:

And Paddy, Rupert Murdoch clearly valued news and valued the influence it gave him. But we know news media is really struggling to make money. So for someone like Lachlan, who is so business-minded and focused on that bottom line, do you think there comes a time when he would sell off some of the news business? Is he attached to owning a bunch of Australian newspapers in the same way that his father was?

PADDY:

Well, I don't think that that's Lachlan's plan or intention. Obviously, I can't read his mind. I don't have a crystal ball. But I think that he is trying to put in place a strategy that will serve Fox and News for the long term. Part of that strategy is putting the two arms of the empire back together, arguing that scale has its own economies and therefore will help support those businesses. But also he's trying to find growth businesses that will underpin the legacy mastheads. And he's had some success doing that on the newspaper side of the business. So the deal that Lachlan is most proud of was an early deal to buy into realestate.com.au. the classified advertising, website and property that is now a $20 billion dollar asset which undoubtedly is the most valuable asset in the portfolio of News Corporation is its majority share of REA and which underpins which helps support the legacy media businesses as they transition to a digital future. The Wall Street Journal is, you know, blazing the path there.

I think he's, he's focussed on trying to position the businesses for the long term and a sale would come up at the time of Rupert’s death, not before.

ANGE:

And Paddy I guess it's hard to imagine any other media owner having this level of influence ever. You know, the way the media operates now is just so different to how it was when Murdoch began. So is Rupert Murdoch, the last media mogul.

PADDY:

I don't think you'll say another again like Rupert. I mean, at the peak of News Corporation, they reached something like three quarters of the world's population through an empire that spanned five continents. You know, this was, I think, in the early 2000's, the first global news media empire. And Rupert sat on top of it famously, The New York Times described the Iraq war as Mr. Murdoch's war when he gave an interview to I think it was The Australian Bulletin, where he said the best thing about the invasion of Iraq would be $20 a barrel for oil. All of his newspapers around the world backed the invasion of Iraq, with the one exception, actually, of The Hobart Mercury, which came out with an editorial saying it was opposed to the invasion, but then quickly changed it’s tune. That was an example of Rupert Murdoch's global influence and lasting legacy at that point of time. I think since then you have seen something of a series of crises that have beset the empire. And ultimately it's a much smaller base now than it was back in the 2000's. So the phone hacking scandal, you know, the sale to Disney and now the Dominion case out of the coverage of the 2020 election and that Donald Trump's big lie. I think a series of things have diminished the Murdoch’s media empire globally.

So I just don't think you're ever going to see out of the traditional media, news media industry, anything like a mogul as powerful as Rupert Murdoch was through his career.

ANGE:

Paddy it's such a fascinating story and fascinating family. I feel like we could be talking for so much longer. But thankfully, you are working on a project that is going to really get into all the details about this family and this succession planning and who Rupert was. Can you tell me a bit more about what you're working on?

PADDY:

Yeah Ange, for the last three or four months, I've been working with a fantastic team on a really special podcast series on the life and legacy of Rupert Murdoch, which will come out in November. And we're really trying to provide a thorough, rigorous, definitive account of, you know, through told through, you know, the story of Rupert Murdoch trawled through key episodes in his career and really picking apart what drives him, you know, what impact he had around the world and how will he be remembered and. And yeah, I can't wait to I can't wait to it until it sees the light of day.

ANGE:

And we can't wait to listen. And it's going to be out via Schwartz Media here on 7am as well.

Thank you so much Paddy for your time today.

PADDY:

Ange thanks.

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ANGE:

Also in the news today…

Daniel Andrews is stepping down as premier of Victoria. Daniel Andrews said being premier for nine years had been the honour and privilege of his life, but said it would be wrong to stay in the role when he started contemplating life after politics.

Today is his last day in office, and his last day as the member for Mulgrave.

And

Leading ‘No’ campaigner Warren Mundine has claimed that the Uluru Statement from the Heart is a symbolic declaration of war against modern Australia, during a speech at the National Press Club.

Mundine claimed Indigenous people were doing “just fine”. In reality, 11 of the 19 Closing the Gap targets are not on track.

I’m Ange McCormack - this is 7am. We’ll be back again tomorrow.

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