Wall Street Shrugs as Murdoch Son Departs News Corp
LINDA WERTHEIMER, host:
Time now for business news.
News Corp. is expected to announce strong earnings today. That's a sign that the company is not going to suffer upheaval despite recent drama involving the family of Chairman Rupert Murdoch. NPR's Kim Masters explains.
KIM MASTERS reporting:
A few weeks ago, Rupert Murdoch's 33-year-old son Lachlan quit his job at the family business. That business is a sprawling media empire that includes the Fox Entertainment assets. Lachlan had been responsible for print operations in the United States. That would include the New York Post as well as the HarperCollins publishing house, and he oversaw the 35 Fox-owned television stations. But there are tensions within the Murdoch clan over the family's $6 billion fortune. That's the kind of thing that can happen when you have, as Rupert Murdoch has, six children from three marriages. Lachlan is also said to have felt that Rupert, his 74-year-old father, wasn't letting him do his job, but though Lachlan was once seen as the heir apparent, Wall Street shrugged when he packed his bags.
Mr. RICHARD GREENFIELD (Media Industry Analyst): The executive that investors have been most concerned about over the past year has been Peter Chernin.
MASTERS: Richard Greenfield is a media industry analyst who says that what made Wall Street nervous in recent months was the notion that News Corp. President Peter Chernin, a man who is not after all a Murdoch, might be wooed away to run the Walt Disney Company. In retrospect, it seems clear that was never in the cards, but as Greenfield notes, Chernin turned the situation to his advantage.
Mr. GREENFIELD: He signed a new long-term contract, and with Lachlan's departure, he seems even that much more entrenched as the senior News Corp. executive next in line to replace Rupert at least in the near term with James waiting in the wings as heir apparent.
MASTERS: Thirty-two-year-old James is the only one of the Murdoch children, four grown, two toddlers, who works in the family business. He is chief executive of Murdoch's British satellite television service, BSkyB, but the perception is that James is not yet ready for prime time. The bottom-line feeling seems to be that the eventual changing of the guard might be postponed. Entertainment industry analyst Harold Vogel.
Mr. HAROLD VOGEL (Analyst, Entertainment Industry): James is still the younger of the two brothers and has still time to prove himself and show what his interests really are.
MASTERS: So while the Murdoch clan sorts itself out, at News Corp., it would appear that the sailing is clear for Peter Chernin, a shrewd 53-year-old. Still, there's at least one other big boat in the harbor, the one piloted by Roger Ailes, the former GOP media adviser who is now head of the FOX News Channel.
(Soundbite from FOX News Channel)
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MASTERS: Having built FOX News into a powerhouse, Ailes has emerged as a great favorite with Rupert Murdoch and on Wall Street. Analyst Richard Greenfield.
Mr. GREENFIELD: We'd always been hoping that he would have a broader responsibility to continue to leverage the success he's had at FOX News.
MASTERS: Ailes is seen as poised to pick up where Lachlan left off, running the Fox television stations. In fact, he had already consolidated enough control that Lachlan is said to have felt that he had been cut out of the loop. That has some News Corp. veterans wondering whether top man Peter Chernin might begin to cast a nervous eye on Ailes. Longtime GOP strategist Charlie Black has known Ailes for more than 25 years and worked on two presidential campaigns with him. He says Ailes has lots of ambition, but he's not convinced he'd have an appetite to run News Corp.
Mr. CHARLIE BLACK (GOP Strategist): I'm not sure just sitting at a corporate board room and just managing people and numbers that would appeal to him as much as when he can see his handiwork on the air every day.
MASTERS: Wall Street agrees. Richard Greenfield.
Mr. GREENFIELD: Peter and Roger from what we can tell from Wall Street have done a great job in managing their respective businesses over the last several years and I haven't noticed any friction.
MASTERS: Certainly Chernin is a pragmatist who has every incentive to get along with Ailes. Asked about his ambitions at a press breakfast in March, Ailes says he's happy where he is for now. So for the immediate future, it appears that the hierarchy at News Corp. is clear: Chernin stays at the helm while Ailes focuses on creating more FOX News-style programming on the Fox-owned television stations. As for the New York Post, Rupert Murdoch has said he'll handle that job himself. Kim Masters, NPR News, Los Angeles.
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