Murdoch Family Values

Rarely has anyone doubted Rupert Murdoch's survival skills. Beginning with a single newspaper, he built arguably the world's most powerful media empire, with newspapers, television, film and publishing assets dotting the globe. His satellite broadcasting operations reach every continent, making News Corp. the only true global media company. Ruthless and shrewd, the patriarch has pursued his strategy for global conquest with little restraint. In the 1980s, for instance, he became a U.S. citizen to circumvent regulations that barred foreigners from owning American broadcasters. Last year he reincorporated News Corp. in the United States, ripping his corporate roots from Australia. And even as the issues surrounding Lachlan apparently were growing more urgent in recent weeks, Murdoch continued his rapacious ways. Last month he formed a digital-media division and then immediately acquired a major Web site for $580 million. None of that has been bad for News Corp.'s corporate image. On the contrary, it generally performs in stellar fashion financially, and Wall Street deems it the best-run media concern around.

It may be a public company, but News Corp. has always been the Murdoch family business, from the moment Rupert inherited the Adelaide News from his father, Sir Keith Murdoch. And all along, Rupert has intended for one of his children to take over after he departs--although he has pledged to stay put until he dies. His explicit dynastic ambitions set him apart from contemporary media moguls like Viacom's Sumner Redstone and CNN founder Ted Turner. Until recently, Redstone, 82, had rarely put the spotlight on either of his two children as heir apparent. And Turner, who has sold off his Turner Broadcasting empire, once famously fired his son.

As Lachlan's experience shows, the mix of family and business has been a struggle. Among other things, Wall Street has focused on familial issues intently, concerned about how succession would play out and whether Rupert's children were up to taking the helm. Lachlan, James and Elisabeth--the children of Rupert's second wife, novelist Anna Murdoch-Mann--have been the focal points of the succession drama. Murdoch-Mann has made no secret of her concern that the children might be harmed in a sharp-elbowed battle to win their father's blessing. In her 1988 novel, "Family Business," she wove a tale of a media dynasty torn apart in a battle of control by four siblings after their father dies without naming a successor.

Life is unlikely to imitate art. Rupert, loath to contemplate his mortality, won't have to spend any of his remaining time on earth dwelling on succession. Elisabeth left the company in 2000. By abandoning his dad, Lachlan, the son who rushed into the family business, has made his decision for him. News Corp.'s reins will be handed off to James, the Murdoch who at first balked at a corporate role. And now, heading back to Australia, the onetime heir apparent can stake his own claim in the land where the storied Murdoch empire began.

WITH MELISSA ROBERTS IN SYDNEY

© 2005