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Home , Chase Carey, Lachlan Murdoch, Murdoch family

Heir force one

hands on After nearly nine years of pursuing his own life in , —shown here In 2005, Lachlan Murdoch walked away from a worldwide media during .’s stressful summer of empire that could have been his. Now, after nearly a decade of 2011—may finally be ready to take the reins. exile, power struggles, and near-catastrophic scandals, the firstborn Opposite: A protester sets fire to a copy of son of Rupert is on the verge of claiming the News Corp. throne. the now-defunct News

akela/corbis; M akela/corbis; M ark © left: from winning/reuters andrew of the World, 2011. By michael wolff 152 | TownANDCOUNTRYMAG.com avowals of love, always as though no one else were in the room. The Mur- dochs were the Murdochs to the exclusion of everyone else. They shared Father and son, not only billions of dollars, a global power base, and a sense of utmost locked in a war of wills destiny, but a failure to separate in any modern family way. They lived in a bubble—continents apart but tying up their yachts together at conve- and ego and pride, nient moments as often as many other families get together for dinner. This was the political reality lived by such people as then News have suffered greatly Corp. COO , head , and Fox in the standoff. broadcasting chief Chase Carey (now president and COO of ). These professional managers had been key players in transforming News Corp. from an outsider company into a modern, blue-chip darling. And yet here they were, having to be attentive and respectful, even subordinate, to the desires and opinions of Murdoch’s adult but wet-behind-the-ears children. Three of the four kids he had with his first two wives were handed major—and, reason might say, undeserved—roles in the business. In 2001, Murdoch had brought Lachlan—who had been given wide powers to run the company’s Australian operation after graduating or almost 10 years in 1994 from Princeton, where he studied philosophy—back to New Lachlan Murdoch, ’s 42-year-old son, has been the York to be his right hand and successor-in-training, effectively super- wayfarer child, searching for his place in the world and turning a cold seding all of the company’s seasoned lieutenants. shoulder to his father’s beseeching that he return home. But a quiet and methodical management rebellion slowly gained Father and son, locked in a war of wills and ego and pride, have traction. Murdoch’s topmost executives, openly ridiculing Lachlan’s suffered greatly in the standoff. The son was hurt by his father’s busi- inexperience and questioning his competence—and launching a whisper- ness slight; the father was deeply pained when his son turned his back ing campaign about his partying lifestyle—triangulated Lachlan out of on his dynastic place. Of the many, many rifts in the , decision-making powers. In 2005 they starkly ignored Lachlan’s wishes this has been the epic one: The designated heir, with all the entitle- regarding a set of key decisions involving the company’s television net- ew York T imes/redux York N ew M uhammad/ zier

ment and inevitability surrounding a first son, went stubbornly miss- works. In essence, they were daring Murdoch to overrule them. Murdoch, O Fing, creating a power vacuum in which much went awry. But give credit to a father’s persistence. At 83, playing a long game, Rupert Murdoch is close to bringing his son back to where he wants him—no matter that his son’s pride is still wounded and his feelings are tangled. Dynasties are hard to maintain, but they are not so casually destroyed. The first time I saw father and son together was in 2004, a year or so before their near-mortal breakup. I had been invited for the first of many interview sessions I would ultimately have with who would tell me later that this was one children of empire Rupert Murdoch. Lunch was served in his cramped office dining of his “worst decisions,” felt he had no Above: The Murdochs in 1973— Lachlan, Rupert, Elisabeth, room at headquarters in Manhattan. Gary Gins- alternative but to side with his executive Anna, and James. Right: Rupert berg, the mogul’s ever-present PR lieutenant, was there. Murdoch team and trim Lachlan’s powers. with third wife Wendi Deng and maintained the remote gruffness that would seldom, in the years of Furious and feeling betrayed, Lachlan their two daughters, in 2005. our acquaintance, relent. quit his job as deputy COO of News Opposite: Lachlan in the newsroom in 2002, This grumpy-old-man persona seemed in peculiar contrast to Corp. on July 29, 2005, and, with his three years before he resigned the extraordinarily good-looking doe-eyed young man who silently pregnant wife Sarah and infant son in from the family company. appeared without introduction behind him, as though awaiting tow, decamped for Australia. orders or instructions. Curious, I thought: The ever-unfashionable I mages

Murdoch has gotten himself, in the fashion of all Hollywood W illiams/ M ichael ; moguls, a gay assistant. But then, in what seemed like a sight gag, It is not an easy business—or

the gay assistant began to stroke his boss’s shoulder, an open caress G ett y family—to leave. Not only was Lachlan’s entire financial future most cash-poor children of a billionaire. Nearly every penny they had of obvious care and affection. y locked into the company he was turning his back on, but, as a board was tied up in company shares controlled by the Murdoch Family It could not have been long—though in hindsight it feels like member, a role he was strategically not relinquishing, he continued Trust, which left them with no authority to sell. The Murdoch children very slow motion—before I understood that this must be Lachlan, to have large responsibilities in it. Even in his new exile, his father were hopelessly dependent on their father—just the way he liked it. the then-32-year-old prince of the realm. b ontour spoke to him almost every day, engaging him in the daily Murdoch But fate—and family—intervened. Lachlan was not Rupert’s What I was witnessing was the odd and inescapable reality of the tangle of family and business issues. only personal crisis. In 1999 he had divorced his wife of 32 years, Murdoch kingdom, the central fact of life for all of Murdoch’s associates From the beginning Rupert waged a campaign to bring Lachlan Anna Murdoch, and married Wendi Deng, 38 years his junior, and courtiers. The cold and ruthless man lived in a world of the deepest back into the company. The father held a particular trump card: None engendering the lasting resentment of his children. But as part of the family emotions and attachments. His meetings were often interrupted of the Murdoch offspring really had any money to speak of. They may divorce settlement, a canny Anna had agreed to $100 million—not, C M edia/ airfax

by calls to his children, with him soliciting their advice and offering A lam y Presselect/ © left: from F have been the children of a billionaire, but they were among the world’s as California property law entitled her to, half of Murdoch’s then-­

154 | TownANDCOUNTRYMAG.com MARCH 2014 | 155 team of rivals itself at News Corp. board meetings, where both brothers held Clockwise from left: Lachlan and Sarah seats. Their face-offs raised the testosterone level of every gath- Murdoch with daughter ering—even beyond the usual levels of Rupert Murdoch’s ever- Aerin in St. Bart’s, onward quest for world dominance. The brothers openly squabbled 2011; Rupert flanked and struggled to have the last word, to the general embarrassment by Elisabeth and James, 2010; father and of other board members. firstborn son at the For Rupert, his sons, each of them his confidant and adviser, served Allen & Co. conference different purposes. Lachlan tended to reassure his father, provide sup- in Sun Valley, 2012. port, offer good counsel, and follow his father’s lead. In 1991, when News Corp. teetered on the edge of bankruptcy, it was Lachlan, still a teenager, who often accompanied his father around the world in his efforts to rescue the company. Lachlan recalled, in an interview with me, putting his father to bed on the night they signed one particular life-or-death deal. “I mean, I was only—what, 16 or 15 or something— but I remember really being worried about him.” James, meanwhile, tended to challenge his father, often publicly disagreeing with him, which, in un-Godfather-like fashion, seemed It is surely easy to understand the attraction of living in Australia to fill Rupert with pride: such a feisty son. James was always urg- and being a Murdoch with all the entitlement and powers and none of ing Rupert to be even more Rupert, more decisive and ruthless. And the drawbacks—that is, the omnipresence and meddling of the father. Rupert seemed proud of him for being willing to double down on the On the other hand, there was for Lachlan, ostensibly happy to be free of Murdoch toughness. family intrigues, the increasing tension and nettlesomeness of his younger James also understood something that his brother hadn’t. The closer brother James’s ascension to the throne that had once belonged to him. you come to News Corp. headquarters the more perilous it is for you if your name is Murdoch. James insisted that his career, and his route up the News Corp. ladder, happen as far as possible from headquarters in New Rupert Murdoch needs a successor. York. For a time he was in Asia. Then he moved to BSkyB in . But in some sense this is, as all his children are aware, just a place-filler Gradually, his success as CEO of BSkyB made him look more and job. The father might be particularly sentimental about his firstborn more like “the one.” This view was encouraged by senior executives at son, but in the end it doesn’t matter who the heir is, just as long as the News Corp., who had developed an any-Murdoch-but-Lachlan point of person is named Murdoch. view. And it was gradually accepted by Murdoch himself. Lachlan had Before Lachlan became the official successor in 2002, Rupert become entrenched in Australia and ever more resistant to his father’s openly discussed the possibility that his daughter Elisabeth— efforts to find a way for him to come back into the company. “A stub- then in her twenties and assuming greater and greater responsibilities born bastard,” Rupert said to me about his firstborn son. at BSkyB, the Murdoch satellite television company in the U.K.— “I told my dad I was happy doing what I was doing. Period. End of Lachlan is a labrador might one day take over. Indeed, Rupert had prevented her from going story,” an impatient Lachlan told me when I interviewed him in Syd- to james’s doberman. to Stanford Business School, saying he could teach his oldest child by ney in 2008. [ continued on page 177] his second wife more. But father and daughter eventually fell out—she one comfortable, the was angry about his marriage to Deng; he was angry about the power couple other attacking. Right: Rupert with Roger Ailes (left), breakup of her first marriage— president of Fox News Channel and and she too would try to go her chairman of the $8 billion fortune. This on-the-cheap divorce was in exchange for While his two children with Deng would never become voting own way, ultimately building Group, at the 2007 White House Murdoch’s agreement to make the terms of the Murdoch Family participants in the trust, his four older children agreed to one of the largest independent Correspondents’ Association dinner. Below: News Corp. headquarters, in Trust unbreakable. Her three children and Murdoch’s oldest daugh- share with their new siblings an equal, one-sixth economic - television production companies New York City. ter, by his first wife, would remain his only heirs. interest in it. In return, each of the four was given an immediate in the U.K. (which, to no one’s Then Murdoch had two more children with Deng, who began her $150 million in cash and in company shares that they could sell— surprise, News Corp., shrugging

own campaign to secure a place for her officially disenfranchised off- enough to buy quite a bit of independence. I mages off charges of the most obvious spring. Caught between a rock and a hard place, Murdoch negotiated. This was, for Murdoch, a painful outcome. Not just because he had a/corbis; nepotism, bought in 2011). He needed the agreement of a majority of his four adult to sell company shares, which always hurt (they were the basis, after After Lachlan bowed out

children to change the terms of the trust. More than a year of all, of his control of the company), but because Lachlan grabbed his sachs ron I mages; of the running in 2005, James bargaining, and some cold cash, got him part of what he wanted. new independence and launched out on his own with a personal invest- came next.

ment fund. The child raised in Manhattan was now styling himself as dr/x17online.com; left: The brothers, two years the wealthy Australian he might have been had his father never set out apart, have vastly different tem- G ett y / AF P/ the soft life According to a new study, male minks raised in from his home to conquer the world 50 years earlier. Lach- peraments. In the family view, cushy “enriched environments”—which in this experiment meant lan and his wife Sarah, a former Sports Illustrated swimsuit model and Lachlan is a Labrador to James’s

luxurious cages tricked out with pools, swings, and various toys— DENNIS are twice as successful with lady minks as their less fortunate peers. Australian television host, became arguably the most famous couple in Doberman: one comfortable, Those with real estate in the Hamptons fared best of all. Oz, living in Sydney’s Bronte Beach—rich, glamorous, and Murdoch, p melzer/d chris © /newscom; the other attacking. ADRIAN p to from clockwise the biggest name in Australia. cn p G ett y via B loomberg E ells/ S cott Sibling rivalry manifested

156 | TownANDCOUNTRYMAG.com MARCH 2014 | 157 operations. Except Australia. and Elisabeth that, according to many in Mur- Heir Force One Australia remained in some org-chart limbo, doch’s executive circle, was the final and neces- waiting for Lachlan—more exasperated than sary straw in getting their father to understand [ continued from page 157] ever by his father’s maneuverings and quite com- that James would have to lose his place, not only ll along, rupert was fortable in his role as the Murdoch without port- in London but also as heir apparent. keeping close tabs on Lachlan, del- folio. He was hardly without a future. Not only The plotting, of course, then began anew. In egating his other children to report was he a celebrity in Australia—“the king of one version, reported to me by friends of Elisa- back the details of his business life. Sydney,” as his sister Prudence, from Murdoch’s beth’s, she would, on her father’s death, become Quite predictably, Rupert was usu- first marriage, described him to me—and heir to the CEO of the company with the support of allyA distressed by what he found out. one-sixth of a $13 billion fortune (at current mar- Lachlan, who would become chairman, with First there was Lachlan’s friendship with ket prices), but his voice and concerns about the peacemaker Prudence in tow, thereby shutting Jamie Packer, the son of , the other future of the company could not be ignored. James out. Australian media mogul, for whom Rupert had There are four votes on the Murdoch Family But News Corp. executives were plotting great and historic scorn. The mogul-billionaire Trust, which will have voting control over all too. They now took advantage of Rupert’s rela- sons had bonded. Back in the 1990s, Jamie had Murdoch family assets post–Rupert Murdoch. tive weakness to press an issue that had arisen led Lachlan into OneTel (with each son getting There is no tie-breaking mechanism. So, in a many times before but that Rupert had always his father to invest), an ambitious effort to cre- way, heir to the throne is an illusory position— dismissed: getting rid of the newspapers. This ate an Australian mobile telecommunications or at least a fragile one. Whoever becomes the business might be near to Murdoch’s heart, but giant, which, in short order and with maximum CEO can rule only with the agreement of two it had no place, his executives began to seri- publicity and embarrassment, collapsed into of his or her siblings. ously argue after the July 2011 closing ofNews bankruptcy. For several years the family dynamic seemed of the World, in a modern entertainment com- Lachlan, for his part, tried hard to keep his quite clear. Lachlan, with his public lifestyle in pany. The newspapers had to go. father in the dark. Once, after I had interviewed Sydney (where he outbid on a By all reports Murdoch resisted this assault Lachlan in Sydney, I returned to New York $20.5 million mansion in 2009), was naturally like a wounded animal—until, in Murdoch and mentioned several things that Lachlan was allied with his sister Elisabeth in London, who, fashion, he began to see it not as a challenge to doing, which, for a moment, Rupert pretended with her husband , a well- his ultimate dynastic ambitions but as a boost. he knew about. When it became obvious that he known PR agent and great-grandson of Sig- News Corp., cut off from the wasn’t in the loop, his face crumpled. mund, cut a figure in London society. Prudence, assets, would become exactly Lachlan understood the key fact about his who lived quietly with her husband and children company that Murdoch had long dreamed father: No matter his love, his desire to be sup- in Sydney and had no ambitions in the company, Lachlan would run. portive, he couldn’t not get involved. He couldn’t was the official family peacemaker. James was And, indeed, Lachlan for a time considered help but to try to have it his way. the sore thumb, or, as Prudence half-affection- taking the job. The only problem for him was One afternoon I found Rupert steaming ately described the robotic James, “the cyborg.” that his father would be running it too. Rupert about a set of new investments that Lachlan This was the situation going into the sum- would, technically, remain the operating CEO had made—and that Rupert had to read about mer of 2011, when the hacking scandal broke of the much larger entertainment company, secondhand. Again it was a Jamie Packer deal, wide open with the disclosure that News of the 21st Century Fox, with its television, cable, and in which Lachlan was positioned as a minority World, one of Murdoch’s British tabloids, had movie assets, and a more distant chairman of investor in a portfolio of companies, thereby gotten into the voicemail of not just politicians, News Corp., the newspaper-focused company. having little control, rather than, as Murdoch celebrities, and royals—bad enough—but also But his family members and closest executives couldn’t helping pointing out, taking a control- of Milly Dowler, a murdered 13-year-old. With understood that the opposite would be the case: ling stake in one company that he might effec- that revelation, the company’s long and seem- Rupert would be hands-off at Fox and keep his tively run. ingly successful efforts to stonewall the scandal hands on his beloved newspapers. It was during this time, as James began to came undone. Once again Lachlan said no. look more and more inevitable—and Rupert It was the summer horribilis of the Murdoch Once again Rupert persisted, shaping reality continued to feel more and more guilty about family. There was fear within the family that to suit his long-term plan. Lachlan’s lost place in the company—that not only might their reputations be ruined but On December 3, 2012, he named Robert Rupert started to foresee a solution: Lachlan their fortune lost—and that people named Thomson, the managing editor of theWa ll should not only come back to run News Corp.’s Murdoch could even go to jail. The outsiders, Street Journal, his CEO—a non-businessman Australian operation—something Lachlan had Lachlan and Elisabeth, and to a lesser extent in the top business position. In effect he was continually refused to do—but Lachlan should Prudence, blamed the insiders, believing that holding the job for himself, and for Lachlan. look toward buying out News Ltd., the Austra- their father had put too much faith in James and Then, in the division of assets with Fox, Rupert lian division of News Corp., hence giving him that James, running the business in Britain, had was careful to create a company dominated by his own empire. wholly lost control of events. properties in Australia. While it would own After the successful 2007 battle to buy the A family that, even in its most rancorous , the New York Post, and Wall Street Journal, in which James acted as his moments, saw itself as exclusive and insular was the British papers, it would live or die on its father’s key adviser, Murdoch promoted James now coming apart. Lachlan and Elisabeth were Australian holdings. Along with more than to the official number three position in the com- hardly speaking to their father and were com- 100 papers in Australia, he added to the mix pany, behind COO Peter Chernin, with respon- pletely severed from James. , Australia’s cash-rich leading pay-TV sibility for all of the company’s international Indeed, it was the intervention of Lachlan network. If his son wouldn’t come to him, he

march 2014 | 177 Heir Force One

would bring the company to his son. In a sense it was the ultimate solution to Rupert Murdoch’s dynastic dreams: just have more empires to hand out. Elisabeth and James, who was slowly being rehabilitated, could duke it out for Fox. Indeed, there is enough of Fox to be divided up yet again. And now, for Lachlan, Rupert would create an empire that is so custom-fit, that so surrounds him, and that is so potentially helpless without him that it would become, within the family, an inside joke. Lachlan would have to leave Australia to escape the future his father made for him. He is so triangulated! In a secret recording made during a meeting at last year, Rupert revealed that Lachlan was now the heir apparent. Among the Mur- dochs, Lachlan’s return is regarded as a virtual done deal, and News Corp. is spoken of as Lach- lan’s company.

here is another coda. Murdoch had long struggled to reconcile his children with his wife Wendi. But it never happened. His efforts to navigate the business Tand emotional shoals of his relationships with his older children were always hampered by this outsider he had brought into their midst. Like- wise, his marriage was ever compromised by his wife’s resentment of his children’s inability to accept her (and to give her children a proper place in the family and business). While surely there were many other issues in this marriage, there was an aspect of Mur- doch’s Choice: his wife or his dynasty. In that summer of 2011, with Hackinggate in full fury—the summer when Deng dived between Rupert and a pie thrower as he testified before Parliament—Rupert confided to Lachlan that his marriage to Deng had been a terrible mistake. In June 2013 he was telling intimates that Deng did not deserve to be his widow, and, pressured by his children, he brought it to an end. If the father is overinvolved in the lives of his children, they are overinvolved in his. There is a certain sort of tragic comedy in being a Murdoch. The price of a fabulous inheri- tance and the abiding attentions of a father who believes his children possess inevitable greatness, even magical qualities, is that each is pretty much stuck with the others, and with an immu- table destiny. The Murdochs—the first son back in the anointed position and each of their yachts moored side by side at some beautiful destina- tion—are together again, helplessly. •

178 | TownANDCOUNTRYMAG.com